SIP - 2023 NPAT-MI beats our forecast due to other non-core income – Earnings Flash
  • 2024-01-31T00:00:00
  • Company Research
  • SIP announced Q4 2023 results with revenue of VND1.9tn (USD79mn; +33% YoY and +12% QoQ) and NPAT-MI of VN340bn (USD14mn; +13% YoY and +75% QoQ). The top-line YoY increase was mainly due to a 28% increase in revenue for the energy & water services segment while the bottom-line was supported by higher gross profit, financial income, and net income from affiliates.  
  • SIP’s 2023 revenue increased by 11% YoY to VND6.7tn (USD275mn) while its NPAT-MI edged down 2% YoY to VND956bn (USD39mn), fulfilling 107% and 117% of our respective forecasts. Pending a more extensive review, we foresee potential upside to our 2024F forecasts.
  • Cash inflow from IP land sales in 2023 was 16% lower than our expectation at around VND622bn (USD26mn; -5% YoY), which we attribute to slower-than-expected IP land sales in 2023. SIP’s preliminary 2023 IP land sales were around 20 ha (per the company), compared to our full-year IP land sales forecast of 24 ha. 
  • Gross profit from the IP leasing segment in 2023, which accounted for 26% of the total gross profit, was up 2% YoY to VND238bn (USD9.8mn). We note that SIP purely applies the allocation method for revenue recognition of IP land sales, which does not fully reflect actual cash inflow from the IP land sales.  
  • Gross profit from utilities services — including water, electricity, and other services — (accounting for 67% of total gross profit) edged up 2% YoY to VND619bn (USD25mn) in 2023. We attribute the 2023 slow growth in utilities services to generally weaker manufacturing activities. 
  • Financial income increased by 10% YoY in 2023 to VND429bn (USD18mn) and was 15% ahead of our expectation mainly because of higher interest income from deposits and loans vs our previous projection.
  • Net income from affiliates jumped 49% YoY in 2023 to VND126bn (USD5.2mn), completing 146% of our forecast. The strong increase was mainly driven by a 3.9x jump in the NPAT-MI of its 23.4%-owned affiliate Viet Nam Rubber Industrial Zone and Urban Development JSC (UPCoM: VRG) to VND195bn (USD8.0mn) thanks to an increase in its IP revenue. 

 SIP’s 2023 results

VND bn

Q4 

2022

Q4 

2023

YoY

2022

2023

YoY

2023F

2023 as % of 2023F

Net revenue

1,440

1,911

33%

6,035

6,673

11%

6,242

107%

  • Industrial parks

109

92

-16%

341

361

6%

365

99%

  • Utilities (electricity, water, & others)

1,259

1,617

28%

5,300

5,877

11%

5,564

106%

  • Residential

28

6

-78%

28

6

-78%

0

N.M.

  • Others

44

196

349%

366

429

17%

313

137%

Gross profit

271

292

8%

901

930

3%

846

110%

SG&A expenses

-29

-34

19%

-107

-110

3%

-107

103%

EBIT

242

257

7%

794

820

3%

739

111%

Financial income

106

130

23%

390

429

10%

375

115%

Financial expense

-6

-13

125%

-30

-84

185%

-88

96%

Net income from affiliates

32

65

104%

84

126

49%

86

146%

Net other income

6

8

37%

6

11

70%

7

154%

PBT

379

447

18%

1,246

1,301

4%

1,120

116%

NPAT-MI

300

340

13%

977

956

-2%

817

117%

 

 

 

 

 

 

 

 

 

GPM

18.8%

15.3%

 

14.9%

13.9%

 

13.6%

 

  • Industrial parks

62.6%

90.1%

 

68.3%

65.8%

 

58.8%

 

  • Utilities (electricity, water & others)

12.2%

9.9%

 

11.4%

10.5%

 

10.7%

 

OPM

16.8%

13.5%

 

13.2%

12.3%

 

11.8%

 

NPM

20.8%

17.8%

 

16.2%

14.3%

 

13.1%

 

Source: SIP, Vietcap forecast (last updated November 30, 2023)

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