- 2024-04-19T00:00:00
- Company Research
- QTP released robust Q1 2024 results with revenue of VND3.0tn (flat YoY) and reported NPAT-MI of VND227bn (+57% YoY). The strong performance is mainly due to (1) an 8% YoY increase in sales volume, coupled with (2) a 10% YoY decrease in the average material cost, and (3) a 33% YoY decrease in depreciation expenses.
- Q1 2024 results are above our expectations, completing 24% and 27% of our 2024 revenue and reported NPAT-MI forecasts, respectively. We attribute the higher-than-expected reported NPAT-MI to the lower-than-expected average material cost, as well as higher-than-expected volume. We foresee upside potential to our QTP’s earnings forecast, pending a fuller review.
The decreasing YoY average material costs for coal-fired power companies within our coverage suggest upside potential to our earnings forecast. In Q1 2024, we estimate that the average material costs for PPC, QTP, and HND (Not-rated) decreased by 4%/10%/25% YoY, respectively. We currently forecast the mixed coal price to decrease 6% YoY in 2024. For PPC, this is broadly in line with our expectation. However for QTP, the more significant reductions in material costs suggest there could be a slight upside to our earnings projections.
Strong dividend yield outlook (10-12%). According to the AGM 2024 documents, QTP raised its 2023 cash dividend guidance to VND1,500/share. Although on a preliminary basis, it is slightly lower than our current projection of VND1,886/share. We are waiting for the final DPS to be approved in the upcoming AGM. As of now, QTP has already paid an advance 2023 cash dividend of VND1,036/share (including VND750/share by using 2023 retained earnings and VND286/share by reallocating its development and investment fund). This implies the remaining 2023 cash dividend to be VND464/share. For 2024, QTP plans to pay a 2024 cash dividend of VND1,000/share. This is lower than our projection of VND1,800/share. We believe this guidance is conservative because up until now, QTP has usually raised its cash dividends significantly higher than it initially planned. QTP initially issued a cash dividend of VND1,000/share, which was raised to VND1,600/share in 2021, VND2,250/share in 2022, and now VND1,500/share in 2023 (preliminary basis).
QTP’s Q1 2024 results
VND bn | Q1 2023 | Q1 2024 | YoY % | % of Vietcap’s 2024F |
Sales volume (million kWh) | 1,657 | 1,796 | 8% | 25% |
Price spread (VND/kWh) | 363 | 369 | 2% | 110% |
ASP (VND/kWh) | 1,807 | 1,676 | -7% | 97% |
Average material cost (VND/kWh) | 1,445 | 1,307 | -10% | 94% |
Revenue | 2,995 | 3,010 | 0% | 24% |
COGS | -2,817 | -2,726 | -3% | 24% |
- In which, depreciation expense | -226 | -152 | -33% | 25% |
- In which, maintenance & other expenses | -134 | -160 | 20% | 53% |
Gross Profit | 178 | 284 | 59% | 27% |
G&A | -21 | -23 | 6% | 19% |
Operating profit (EBIT) | 157 | 261 | 67% | 28% |
Financial income | 15 | 0 | -99% | 2% |
Financial expenses | -19 | -9 | -55% | 45% |
In which, interest expense | -19 | -6 | -69% | 32% |
PBT | 152 | 252 | 66% | 27% |
Income tax expense | -8 | -25 | 231% | 27% |
Reported NPAT | 144 | 227 | 57% | 27% |
Source: QTP, Vietcap
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