NLG – 2023 NPAT-MI beats our forecast mainly due to higher profit from commercial land sales – Earnings Flash
  • 2024-01-26T00:00:00
  • Company Research
  • NLG announced Q4 2023 underlying property revenue (including revenue from the joint-venture Mizuki Park project) of VND2.7tn (USD111mn; +37% YoY and double QoQ), primarily supported by continued handovers at Mizuki Park and the start of handovers at Izumi City Phase 1. NLG also recorded commercial land sales at the Kikyo Residence project (Thu Duc City, HCMC) into the company’s Q4 2023 financial income (VND101bn/USD4.2mn) vs our forecast that it would be recognized into revenue (VND140bn/USD5.8mn) and gross profit (VND80bn/USD3.3mn).  
  • In 2023, NLG’s underlying property revenue was VND7.1tn (USD291mn; +56% YoY) and NPAT-MI was VND484bn (USD20mn; -13% YoY), surpassing our respective forecasts by 15%. We attribute the higher 2023 NPAT-MI vs our forecast mainly to higher-than-expected financial income in Q4 2023. We anticipate downside risks to our 2024F NPAT-MI forecast of VND643bn (USD26.5mn; +33% YoY) due to faster-than-expected property sales recognition in Q4 2023, pending a fuller review.
  • In early January, management stated that NLG’s preliminary 2023 presales amounted to ~VND4tn (USD165mn), equivalent to Q4 2023’s result of ~VND2.2tn (USD90mn), mainly supported by the presales at (1) Southgate, driven by VIP customer purchases for villa products and block sales at Ehome Southgate and (2) the next batch launch of Akari City Phase 2. The preliminary 2023 presales surpassed our forecast (VND2.8tn/USD115mn) mainly due to Q4 higher-than-expected presales at Southgate. We forecast NLG’s 2024F presales at VND5.6tn (USD230mn; +40% vs preliminary 2023 presales).

NLG’s 2023 results

VND bn

Q4 
   2022 

Q4  
 2023 

YoY 

2022 

2023 

YoY 

2023F 

2023 as % of 2023F 

Net revenue

1,629

1,636

0%

4,339

3,181

-27%

3,373

94%

  • Property sales

1,538

1,546

1%

4,083

2,905

-29%

3,181

91%

  • Services and leasing

91

90

-1%

256

276

8%

191

144%

Gross profit

814

692

-15%

1,984

1,562

-21%

1,521

103%

  • Property sales

723

754

4%

1,813

1,544

-15%

1,393

111%

  • Services and leasing

92

-62

N.M.

171

18

-90%

128

14%

 

 

 

 

 

 

 

 

 

SG&A expenses

-385

-354

-8%

-1,155

-980

-15%

-913

107%

EBIT

429

338

-21%

829

582

-30%

608

96%

Financial income

307

128

-58%

386

246

-36%

120

205%

Financial expense

-69

-87

25%

-199

-305

53%

-296

103%

Profit from associates

22

213

869%

25

418

1604%

410

102%

Other gain/loss

16

19

19%

29

27

-8%

0

N.M.

PBT

705

611

-13%

1,070

968

-10%

841

115%

Effective tax expenses

-115

-129

12%

-204

-168

-18%

-95

177%

NPAT

590

482

-18%

866

800

-8%

747

107%

Minority interest

-153

-192

26%

-309

-317

2%

-328

97%

NPAT-MI

437

290

-34%

556

484

-13%

419

115%

 

 

 

 

 

 

 

 

 

Gross margin

50.0%

42.3%

 

45.7%

49.1%

 

45.1%

 

  • Property sales

47.0%

48.8%

 

44.4%

53.1%

 

43.8%

 

  • Services and leasing

100.8%

N.M.

 

67.1%

6.5%

 

67.1%

 

SG&A as % of revenue

23.7%

21.6%

 

26.6%

30.8%

 

27.1%

 

EBIT margin

26.3%

20.7%

 

19.1%

18.3%

 

18.0%

 

NPAT-MI margin

26.8%

17.7%

 

12.8%

15.2%

 

12.4%

 

Source: NLG, Vietcap forecast (last updated November 14, 2023)

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