NVL posted encouraging Q2 2021 results with net revenue of VND2.5tn (USD111mn; +2.6x vs Q2 2020’s low-base) and NPAT-MI of VND1.3tn (USD57mn; +48% YoY) on the back of financial gains via M&A. Per management, NVL recorded a gain of VND1.7tn (USD77mn) of negative goodwill on a bargain purchase following the acquisition of a 700-ha land bank in Mui Ne, Binh Thuan Province (close to NovaWorld Phan Thiet) via a group of companies — Nova Final Solution JSC, Dang Khanh Real Estate and Dau Tu Tong Hop Mui Ne JSC. NVL also continued divesting ~20% of its stake in Project S (the Phu Dinh Harbour City project; 60 ha in District 8, HCMC) in Q2 2021 to record a gain of VND484bn (USD21mn; NVL owns a ~20% stake after this transaction). We note that in Q2 2020, NVL recorded a gain of VND1.7tn (USD74mn) from divesting nearly 40% of its stake in Project S.
For H1 2021, NVL’s net revenue surged 3.2x to VND7.0tn (USD307mn) while its NPAT-MI grew 53% YoY to VND1.9tn (USD81mn). These results fulfilled 40% and 45% of our respective full-year forecasts. As such, we foresee insignificant change to our 2021F NPAT-MI forecast of VND4.2tn (USD181mn; +6% YoY), pending for a fuller review.
Figure: NVL’s H1 2021 results
VND bn | Q2 2020 | Q2 2021 | YoY% Growth | H1 2020 | H1 2021 | YoY% Growth | 2021F | H1 as % of 2021F | Net revenue | 710 | 2,544 | 2.6x | 1,664 | 7,050 | 3.2x | 17,598 | 40% | Gross profit | 217 | 858 | 3.0x | 583 | 2,575 | 3.4x | 6,309 | 41% | Selling expenses | -16 | -183 | 10.5x | -26 | -322 | 11.5x | -338 | 95% | G&A expenses | -350 | -292 | -17% | -614 | -611 | 0% | -1,353 | 45% | EBIT | -149 | 383 | N.M. | -57 | 1,642 | N.M. | 4,618 | 36% | Financial income | 1,807 | 1,334 | -26% | 2,665 | 1,906 | -28% | 2,615 | 73% | Financial expenses | -365 | -1,829 | 401% | -751 | -2,283 | 2.0x | -2,575 | 89% | Interest expenses | -169 | -118 | -30% | -302 | -1,408 | 3.7x | -2,318 | 61% | Other income/ (expense) | -295 | 1,610 | N.M. | -368 | 1,495 | N.M. | 0 | N.M. | | | | | | | | | | PBT | 998 | 1,497 | 50% | 1,487 | 2,758 | 85% | 4,657 | 59% | PAT | 875 | 1,313 | 50% | 1,177 | 2,014 | 71% | 4,147 | 49% | NPAT-MI | 891 | 1,321 | 48% | 1,213 | 1,857 | 53% | 4,160 | 45% | | | | | | | | | | Gross margin | 30.6% | 33.7% | | 35.0% | 36.5% | | 35.9% | | SG&A as % of revenue | 51.6% | 18.7% | | 38.5% | 13.2% | | 9.6% | | EBIT margin | -21.0% | 15.1% | | -3.4% | 23.3% | | 26.2% | | Effective tax rate | 12.3% | 12.3% | | 20.8% | 27.0% | | 11.0% | | NPAT-MI margin | 125% | 51.9% | | 72.9% | 26.3% | | 23.6% | |
Source: Company’s financial statements, VCSC forecasts (dated June 1, 2021) |