- GMD released Q1 2023 results with revenue of VND902bn (USD38.2mn; +3% YoY & -15% QoQ) and NPAT-MI of VND202bn (USD8.6mn; -26% YoY & +7% QoQ), which completed 22% and 21% of our respective full-year forecasts mainly due to the weaker-than-expected performance of the port segment and lower-than-expected net income from affiliates. As a result, we anticipate downside risk to our forecasts for GMD’s core businesses, pending a fuller review. 

- Weakened trade activities in Q1 2023 weighed on GMD’s port business and net income from affiliates (mainly contributed by the Gemalink deep-sea port). GMD’s consolidated port revenue (contributed by GMD’s northern ports) dropped 11% YoY and 17% QoQ; however, thanks to its gross margin improving to 42.9% from Q4 2022’s low base of 34.2%, this segment’s gross profit inched up 4% QoQ but still slid 5% YoY. 

- We estimate the Gemalink deep-sea port incurred a loss of VND59bn (USD2.5mn) in Q1 2023. Gemalink incurred a loss of VND34bn (USD1.4mn) in Q4 2022 after recording a VND155bn (USD6.6mn) profit in 9M 2022. We attribute Gemalink’s weak performance in the last two quarters to softened trade activities in southern Vietnam, which is an export hub for products such as fisheries, textiles, leather goods, and wooden products and US-bound routes (vs intra-Asia routes for northern ports) that have been impacted more severely by weakened demand from the US.  

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