- GEX released Q3 2023 results with revenue of VND7.5tn (+7% YoY & -6% QoQ) and reported NPAT-MI of VND122bn (+7.4x YoY & -62% QoQ). The YoY jump in Q3 2023 reported NPAT-MI can be attributed to (1) gross profit from the industrial park (IP) leasing segment surging by 116% YoY, (2) a 26% YoY improvement in electrical equipment gross profit, and (3) residential real estate gross profit increasing by more than 4x YoY due to a reduction in the total capex of several projects. Additionally, Q3 2023 SG&A expenses declined by 14% YoY while financial income increased by 17% YoY primarily due to a substantial gain from securities investment of VND129bn in Q3 2023. These factors outweighed (1) a 45% YoY plunge in gross profit from the construction materials segment due to the construction sector slowdown, and (2) a 28% increase in financial expenses. 

- GEX’s 9M 2023 revenue and reported NPAT-MI were VND21.9tn (-11% YoY) and VND351bn (+19% YoY), achieving 73% and 83% of our respective full-year forecasts. We see slight upside potential to our 2023F reported NPAT-MI forecast, pending a more extensive review. This is because GEX’s 9M 2023 gross profit was broadly in line with our expectations, with results from the utilities and residential real estate segments being in line with our expectations while IP leasing gross profit beat our forecast, offsetting lower-than-expected construction materials and electrical equipment gross profits. However, its 9M 2023 financial income tracked ahead of our projection and 9M 2023 minorities interest was lower than anticipated.

- GEX’s stocks and bond investment balance was reduced by 12.8% QoQ to VND2.8tn at end-Q3 2023 (5.4% of its total assets at end-Q3 2023). Meanwhile, GEX’s total debt balance increased by 5.6% QoQ in Q3 2023 mainly due to higher short-term debt for working capital.  

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