- NKG reported Q1 2023 revenue of VND4.4tn (USD185.4mn; -39% YoY) and a third consecutive quarterly net loss of VND49bn (USD2.1n) compared to NPAT-MI of VND507bn (USD21.5mn) in Q1 2022. We attribute these weak Q1 2023 results to a slowdown in demand in both the domestic and export markets as well as NKG’s high-cost inventory destocking.

- Nevertheless, NKG’s Q1 2023 results experienced a QoQ improvement as gross margin inched up to 3.1% from a loss in Q4 2022, which we attribute to a VND192bn (USD8.1mn) reversion of inventory provision in the quarter. NKG’s provision for inventory outstanding declined to VND145bn (USD6.1mn) as of end-Q1 2023 from VND337bn (USD14.3mn) as of end-2022.