- TDM announced its H1 2023 results with revenue of VND234bn (USD9.9mn; +2% YoY) and NPAT of VND183bn (USD7.8mn; +2x YoY), completing 45% and 58% of our respective full-year forecasts. The jump in NPAT was due to TDM recording 2022 dividend income of VND94bn (USD4.0mn) from BWE in Q1 2023 vs recording no dividend income from BWE in H1 2022. We estimate NPAT from water generation of VND90bn (USD3.8mn; -1% YoY) in H1 2023, which completes 40% of our full-year forecast. We attribute the decline in NPAT from water generation mainly to a 27% YoY increase in SG&A expenses (mainly from labor) outweighing a 2% YoY increase in water sales volume.

- TDM’s H1 2023 water sales volume increased 2% YoY to 33.9 million cbm, completing 45% of our full-year volume forecast (75 million cbm; +8% YoY). Moreover, TDM’s June water sales volume was strong at 7.4 million cbm (+32% MoM & +21% YoY), which we attribute to the finalization of water sales volume in H1 2023. TDM changed the record date of its water meters from the 25th to 20th of each month effective from the beginning of 2023, which we believe hurt its monthly water sales volume over the first five months of the year.

- In Q2 2023, TDM recorded revenue of VND133bn (USD5.6mn; +6% YoY) and NPAT of VND55bn (USD2.3mn; +9% YoY). We note that TDM booked a VND5bn (USD0.2mn) provision for its investment in Gia Tan Water Supply JSC, in which TDM holds a 19% stake. We estimate Gia Tan JSC will generate a loss of VND22bn (USD0.9mn) in 2023 before starting to make profit in 2024.

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