- GEX released solid Q2 2023 results with revenue of nearly VND8.0tn (-12% YoY & +25% QoQ) and reported NPAT-MI of VND321bn (+24x YoY) vs a loss of VND92bn in Q1 2023. We attribute the jump in reported NPAT-MI to (1) a 61% YoY surge in gross profit from the industrial park (IP) & industrial estate leasing segment, which outweighed a decline in gross profit from other segments, in addition to (2) a 60% decrease in financial expenses due to significantly lower FX losses and losses from securities investment, and (3) lower selling, general & administration expenses resulting from cost control. In H1 2023, GEX recorded VND229bn (-19% YoY) of reported NPAT-MI. We note that GEX’s PBT was VND1.0tn (-32% YoY) in H1 2023, completing 80% of the company’s 2023 PBT guidance of VND1,272bn. 

- At its 2023 AGM, GEX announced aggressive guidance for 2023 revenue of VND37.5tn (+17% YoY). This expectation is driven by 1) the market share expansion of the electrical cable business; 2) improving transformer production and sales volume (from 2022’s low base when factories were relocated ); 3) 30%-40% revenue growth from the wind power segment due to its full-year operation and wind speeds that are expected to increase YoY; and 3) the construction material business expanding into new markets, new products, and more leasing at IPs. This consolidated revenue guidance is contributed by VND18.0tn (+17% YoY) from GELEX Infrastructure JSC and VND19.5tn (+17% YoY) from GELEX Electric JSC (UPCoM: GEE). GELEX Infrastructure currently holds a 50.2% stake in Viglacera JSC (HOSE: VGC), which is one of the leading IP developers in northern Vietnam, and a 62% stake in Song Da Water Investment JSC (UPCoM: VCW). GEE has a 96% stake in Vietnam Electric Cable JSC (UPCoM: CAV), a 96% stake in Electronic Equipment JSC (OTC: THI), and a 77% stake in Hanoi Electromechanical Manufacturing JSC (UPCoM: HEM). We note that GEX also has a controlling stake in a 241-MW renewable energy portfolio (comprising 49 MW of hydropower, 138 MW of wind power, and 68 MWp of solar power) via both GEE and Gelex Infrastructure JSC.

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