- 2024-07-18T00:00:00
- Company Research
- TDM announced H1 2024’s sales volume of 35.5 million cubic meters (+4.7% YoY), completing 49% of our full-year forecast. This is in line with our 2024F’s sales volume growth of 5%.
- TDM announced its Q2 2024 revenue of VND187bn (USD7.4mn; +41% YoY) and reported NPAT of VND44bn (USD1.7mn; -20% YoY). For H1 2024, TDM’s revenue was VND293bn (USD11.6mn; +26% YoY) while the NPAT was VND82bn (USD3.2mn; -55% YoY), which fulfill 58% and 41% of our respective full-year forecasts. We attribute the higher 6M revenue to (1) a 4.7% YoY increase in sales volume vs 6M2023 and (2) VND48bn (USD1.9mn) from material trading (vs none last year). Additionally, the substantial slump in the bottom-line earnings is due to (1) TDM’s not receiving cash dividends from its 37% stake in BWE (vs VND94bn - USD3.7mn in H1 2023), (2) a VND18bn (USD0.72mn) provision for potential losses of investments in its associates (Gia Tan Water, Ca Mau Water, and Biwase Quang Binh), and (3) a VND8.5bn (USD0.3mn) unrealized forex loss from its recent USD-denominated loan (USD8mn) at Woori bank (vs none in 2023). TDM’s reported NPAT slightly trails our current expectation.
- Excluding forex loss, TDM’s H1 20024 NPAT from water generation is VND90bn (USD3.6mn; +1.1% YoY), completing 51% of our current full-year forecast and is in line with our expectation. We attribute the slight increase in NPAT from water generation despite stronger sales volume (4.7% YoY) to the small recognition of financial income in H1 (which should increase in H2).
- Overall, we see insignificant change to our recent NPAT from water generation forecast. See more in our latest Water Sector Update dated June 27, 2024.
- We currently have an OUTPERFORM rating for TDM at a target price of VND54,800/share.
TDM’s H1 2024 results
VND bn (unless stated) | Q2 2023 | Q2 2024 | YoY (%) | H1 2023 | H1 2024 | YoY (%) | % of Vietcap’s 2024F |
Water sales volume (million cbm) | 19.2 | 20.2 | 5.0% | 33.9 | 35.5 | 4.7% | 49% |
Revenue | 133 | 187 | 40.8% | 234 | 293 | 25.4% | 58% |
COGS | -59 | -108 | 84.6% | -112 | -165 | 47.2% | 60% |
Depreciation expenses | -37 | -37 | -0.2% | -73 | -73 | -0.2% | 43% |
Gross profit | 74 | 79 | 6.3% | 122 | 128 | 5.3% | 53% |
SG&A expenses | -3 | -3 | -15.2% | -7 | -7 | -2.5% | 45% |
Operating profit | 71 | 76 | 7.3% | 114 | 121 | 5.8% | 56% |
Financial income | 2 | 2 | -3.6% | 96 | 4 | -95.8% | 12% |
Financial expenses | -12 | -29 | 145.5% | -17 | -34 | 95.4% | 102% |
Interest expenses | -6 | -2 | -67.2% | -10 | -6 | -37.9% | 24% |
Net other income/loss | 0 | 0 | -28.9% | 0 | 0 | -100.0% | N.M. |
Profit before tax | 61 | 49 | -19.8% | 193 | 91 | -52.9% | 42% |
Income tax expenses | -6 | -5 | -21.5% | -10 | -9 | -8.7% | 47% |
NPAT-MI | 55 | 44 | -19.6% | 183 | 82 | -55.3% | 41% |
NPAT from water generation | 55 | 53 | -4.1% | 89 | 90 | 1.1% | 51% |
Source: TDM, Vietcap
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