SZC - 2023 profits in line with our expectations – Earnings Flash
  • 2024-01-19T00:00:00
  • Company Research
  • SZC released its Q4 2023 results with revenue increasing 32% YoY to VND259bn (USD11mn) and NPAT-MI surging 49% YoY to VND56bn (USD2.3mn). We attribute the strong YoY growth in Q4 2023 mainly to the scheduled IP land sales handover to A Chau Agricultural Products and Siba High-tech Mechanical, both of which signed contracts/MOU in 2022. 

  • SZC's 2023 NPAT-MI increased by 11% YoY to VND219bn (USD9.0mn), mainly thanks to a recovery in the IP segment's GPM. This 2023 NPAT-MI result was equivalent to 102% of our forecast and in-line with our expectation. We also anticipate no significant changes to our 2024F NPAT-MI forecast of VND275bn (USD11mn; +26% YoY), mainly driven by the expected GPM improvement and higher contribution from the residential segment.  

  • For the IP segment, 2023 segment revenue (accounting for 84% of total revenue) decreased by 9% YoY to VND684bn (USD28mn). GPM of this segment improved to 54.4% vs 40.1% in 2022 and vs our 2023F forecast of 53.6%.  

  • For the residential segment, 2023 segment revenue (accounting for 9% of total revenue) was VND72bn (USD3.0mn; +8% YoY), driven by the handover of shophouse units at the Huu Phuoc UA project, while the segment GPM was 65.6% in 2023.  

  • SZC's total unearned revenue and advances from customers was VND685bn (USD28mn; -4% YoY) as of end-2023, which we believe represents headroom for the company to recognize IP & UA land sales in the future.  

  • We note that SZC has not provided details regarding its IP segment in terms of IP land leasing area and average leasing price during the specified period. In December 2023, D2D and SZC (with SNZ owning 58% and 52% of each, respectively) signed a contract for D2D to lease a 6.5-ha land plot at the Chau Duc IP of SZC with leasing price of USD79/sqm, which has yet to be recognized as revenue as of end-2023. 

SZC’s 2023 results 

VND bn 

Q4  

2022 

Q4  

2023 

YoY 

2022 

2023 

YoY 

2023F 

2023 as %  

of 2023F 

Net revenue 

196 

259 

32% 

859 

818 

-5% 

756 

108% 

  • IP  

114 

223 

96% 

752 

684 

-9% 

612 

112% 

  • Residential 

67 

18 

-74% 

67 

72 

8% 

84 

86% 

  • Golf course 

11 

14 

22% 

27 

48 

79% 

46 

105% 

  • Others 

15% 

12 

14 

10% 

15 

93% 

Gross profit 

68 

93 

37% 

310 

350 

13% 

345 

101% 

SG&A expenses 

-16 

-24 

47% 

-50 

-55 

10% 

-45 

121% 

EBIT 

51 

68 

34% 

260 

295 

14% 

300 

98% 

Financial income 

35% 

15 

17 

12% 

14 

122% 

Financial expense 

-10 

-11 

8% 

-32 

-46 

43% 

-45 

102% 

Net other income 

-64% 

N.M. 

N.M. 

PBT 

48 

65 

36% 

244 

267 

9% 

269 

99% 

NPAT-MI 

38 

56 

49% 

197 

219 

11% 

215 

102% 

 

 

 

 

 

 

 

 

 

GPM 

34.6% 

35.8% 

 

36.1% 

42.8% 

 

45.7% 

 

  • IP  

45.8% 

55.9% 

 

40.1% 

54.4% 

 

53.6% 

 

  • Residential 

79.9% 

24.9% 

 

79.9% 

65.6% 

 

69.3% 

 

OPM 

26.2% 

26.5% 

 

30.2% 

36.1% 

 

39.7% 

 

NPM 

19.2% 

21.7% 

 

23.0% 

26.8% 

 

28.4% 

 

Source: SZC, Vietcap forecast (last updated December 29, 2023)  

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