DXS [OUTPERFORM +11.9%] - Expecting property brokerage recovery in H2 2023

- We reiterate our OUTPERFORM rating for DXS but lower our target price by 7% to VND7,500/share. Our lower target price is mainly due to a 6% decrease in our aggregate 2023-2027F NPAT-MI forecast as a result of our 3% lower aggregate revenue forecast and lower EBIT margin assumption (average of 26.6% vs 29.3% as previously), which are partially offset by rolling our TP horizon forward from end-2023 to mid-2024.

- We believe the cut in policy rates and the deposit rate cap in March 2023 could offer headroom for mortgage rates to fall, thus supporting property brokerage activities to recover in H2 2023.

- We expect 2023F revenue and NPAT-MI to decline 27% and 61% YoY to VND3tn (USD127mn; -14% vs prior forecast) and VND134bn (USD5.7mn; -51% vs prior forecast), respectively, as we cut our revenue and GPM assumptions in accordance with Q1 2023’s weak results.

- We expect 2024F and 2025F NPAT-MI to rise 201% and 58% YoY to VND405bn (USD17mn; -13% vs prior forecast) and VND642bn (USD27mn; -4% vs prior forecast), respectively, vs 2023F’s low base.