- 2024-04-15T00:00:00
- Company Research
- TDM announced its Q1 2024 results with revenue of VND106bn (+5.1% YoY) and NPAT-MI of VND38bn (-70.2% YoY). These results complete 21%/19% of our respective full-year forecasts. Water sales volume within the period increased to 14.6 million cubic meters, which is equivalent to 4.3% YoY growth and completed 21% of our full year projection. We note that first quarters are usually the low season as water demand lags because of factory closures and residents returning home for the Tet holiday.
- We estimate NPAT from water generation to be VND38bn (+11.2% YoY) in Q1 2024, which completes 21.3% our full-year forecast. We see insignificant to our forecast, pending a fuller review. We attribute the increase in NPAT to 1) 4.3% YoY sales volume growth and 2) a 12.3% YoY lower financial expense following an exclusion of guarantee fees for its loans, vs that of VND2.1bn in Q1 2023.
- Financial income tumbled 98% YoY (from VND94bn to only VND2bn) due to TDM not receiving a cash dividend from BWE this year, vs VND94bn in Q1 2023. According to BWE’s 2024 AGM resolution earlier last month, BWE will pay a stock dividend instead of a cash dividend for 2023 (see our BWE's 2024 AGM Notes), which results in a significant financial income plunge for TDM in 2024. Consequently, TDM’s Q1 2024 NPAT-MI decreased 70% YoY.
- Binh Duong provincial authorities set a 2024 GRDP target of 8%-8.5%, and in Q1 2024, it has reached a growth of 5.27% vs that of 1.15% in Q1 last year. This proves that industrial activities are recovering and this will drive up water demand in 2024. As a result, we expect TDM to benefit from this and reach our full-year sales volume and NPAT-MI forecasts towards the end of the year.
- TDM’s rights issue at VND30,000/share has been successfully subscribed and starting from April 11, 2024, the total of outstanding shares was raised to 110 million shares. The VND300bn proceeds are mainly for M&A transactions and loans payback. We currently have a MARKET PERFORM rating for TDM with a target price of VND42,100/share.
TDM’s Q1 2024 results
VND bn (unless stated) | Q1 2023 | Q1 2024 | YoY | % of Vietcap’s 2024F |
Water sales volume (million cbm) | 14.6 | 15.3 | 4.3% | 21.3% |
Revenue | 101 | 106 | 5.1% | 20.8% |
COGS | -54 | -57 | 6.4% | 20.9% |
Depreciation expenses | -37 | -37 | -0.2% | 21.9% |
Gross profit | 47 | 49 | 3.6% | 20.8% |
SG&A expenses | -4 | -4 | 8.3% | 28.9% |
Operating profit | 43 | 45 | 3.2% | 20.2% |
Financial income | 94 | 2 | -97.9% | 7.3% |
Financial expenses | -6 | -5 | -12.3% | 15.3% |
Interest expenses | -3 | -4 | 16.4% | 16.9% |
Net other income/loss | 0 | 1 | N.M | N.M. |
Profit before tax | 132 | 42 | -67.8% | 19.6% |
Income tax expenses | -4 | -4 | 11.8% | 21.9% |
NPAT-MI | 128 | 38 | -70.2% | 19.4% |
NPAT from water generation | 34 | 38 | 11.2% | 21.3% |
Source: TDM, Vietcap
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