QNS released Q3 2023 results with revenue of VND2.5tn (USD96mn; +7% YoY) and NPAT-MI of VND506bn (USD21mn; +60% YoY). In 9M 2023, revenue and NPAT-MI was VND7.5tn (USD308mn; +24% YoY) and VND1.5tn (USD63mn; 79% YoY), fulfilling 83% and 93% of our full-year forecasts, respectively. As results tracked ahead of our expectation, we see upside potential to our current projection, pending a more comprehensive review.

Elevated sugar profitability continued. Based on the company’s disclosure, we estimate that QNS’s average selling price of sugar increased 17% YoY and sugar volume grew 85% YoY in 9M 2023.  As a result, QNS’s GPM expanded 11.0 ppts YoY in 9M 2023.

Soy milk revenue decreased 8% YoY and continued to reflect an overall weakness in the industry. QNS's soy milk volume also saw a decline of 9% QoQ to 65 million liters in Q3 2023, which was largely influenced by (1) challenging economic conditions and (2) intense competition among Vietnamese milk producers in the plant-based milk market. Consequently, soy milk GPM decreased by 1 ppts YoY in 9M 2023.

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