HDC – YoY drop in Ngoc Tuoc 2 deliveries results in 9M earnings decline – Earnings Flash
  • 2024-11-01T00:00:00
  • Company Research
  • HDC announced Q3 2024 revenue of VND125bn (USD5mn; -27% QoQ and -26% YoY) and NPAT-MI of VND13bn (USD0.5mn; -74% QoQ and -60% YoY). We attribute the difference in declines between the top-line and bottom-line mainly to other losses of VND15.3bn (USD0.61mn) in Q3 2024 (mainly from penalty expenses of VND14.5bn/USD0.58mn) compared to minimal such expenses in 2023 and H1 2024.
  • In 9M 2024, net revenue was VND381bn (USD15mn; -20% YoY; with property sales accounting for 56% of total revenue) and NPAT-MI was VND65bn (USD2.6mn; -23% YoY), completing 67% and 28% of our respective full-year forecasts. The 9M 2024 results were mainly driven by handovers at the Ngoc Tuoc 2 and The Light City Phase 1 projects.
  • We foresee insignificant change to our 2024F NPAT-MI forecast of VND230bn (USD9mn; +75% YoY) as we continue to expect HDC to recognize a portion of the remaining stake transfer for the 11-ha land plot in the Dai Duong project in Q4 2024F, contributing 67% to our 2024F NPAT-MI forecast, pending a fuller review. Please see details of our projection for the Dai Duong stake transfer on Page 12 in our HDC Initiation Report , dated August 30, 2024.
  • HDC’s cash & cash equivalents, including short-term deposits, totaled VND23bn (USD0.9mn) at end-Q3 2024, down from VND315bn (USD12.6mn) at end-Q2 2024, but up from VND13bn (USD0.5mn) at end-2023. We attribute the QoQ lower cash balance in Q3 2024 mainly to full disbursement of the net proceeds from the rights issue for (1) loan repayments, and (2) ongoing settlement of the stake transfer at the Da Vang Sea Resort project. At end-Q3 2024, HDC’s net D/E was 72% vs 66% at end-Q2 2024 and 77% at end-2023.

HDC’s 9M 2024 results 

VND bn 

Q3  
 2023  

Q3   
 2024  

YoY

9M 2023

9M 2024

YoY  

2024F  

9M 2024 as % of 2024F  

Net revenue 

168

125

-26%

474

381

-20%

573

67%

  • Property sales 

112

66

-41%

308

214

-31%

296

72%

  • Other services 

56

58

3%

166

168

1%

277

61%

Gross profit 

75

57

-24%

199

156

-21%

171

91%

  • Property sales 

70

51

-27%

184

140

-24%

147

96%

  • Other services 

6

6

15%

15

16

10%

25

65%

 

 

 

 

 

 

 

 

 

SG&A expenses 

-13

-13

2%

-41

-41

-2%

-24

172%

EBIT 

62

44

-30%

158

116

-27%

148

78%

Financial income 

1

3

273%

4

21

490%

209

10%

Financial expense 

-22

-14

-40%

-57

-45

-21%

-72

63%

Profit from associates 

0

1

N.M.

0

5

N.M.

3

161%

Other gain/(loss)

0

-15

N.M.

1

-16

N.M.

0

N.M.

PBT 

41

19

-53%

105

81

-23%

288

28%

PAT 

32

13

-59%

84

65

-23%

230

28%

NPAT-MI 

32

13

-60%

84

65

-23%

230

28%

 

 

 

 

 

 

 

 

 

Gross margin 

44.9

46.0

 

42.0%

41.0

 

29.9

 

  • Property sales 

62.5%

76.7%

 

59.8%

65.6

 

49.5%

 

  • Other services 

9.9%

11.0%

 

8.9%

9.7%

 

9.0%

 

SG&A as % of revenue 

7.8%

10.7%

 

8.7%

10.7%

 

4.1%

 

EBIT margin 

37.1%

35.3%

 

33.3%

30.3

 

25.8%

 

NPAT-MI margin 

19.3%

10.5%

 

17.8%

17.0

 

40.2

 

Source: HDC, Vietcap forecast (last updated August 30, 2024)

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