TLG - Earnings disappoint due to weak revenue - Earnings Flash
  • 2024-01-30T00:00:00
  • Company Research
  • TLG released Q4 2023 revenue that dropped 7% YoY. Q4 2023 recorded NPAT of VND28bn (USD1.1mn) vs a net loss of VND3bn (USD0.1mn) in Q4 2022. We note that Q4 2022 was an abnormally low base because TLG recognized large marketing expenses for 2022 in Q4 2022.
  • 2023 revenue and NPAT-MI retreated 2% and 11% YoY, completing 87% and 85% of our forecasts, respectively. We see downside risks to our forecast, pending a more comprehensive review.
  • Per TLG, the revenue decline was caused by weaker end-customer demand and slower stockpiling activities by TLG’s distributors. This was the case in both domestic and export markets.
  • GPM further normalized QoQ to 42.9% in Q4 2023 as TLG digested its low-cost input plastic inventory.
  • 2023 SG&A expenses/revenue hit 31.4%, slightly higher than our projection of 30.4% This number is higher vs the level of 24%-25% in 2015-2019 because TLG is investing heavily in its sales force and marketing. 
  • TLG opened one new Clever Box store in Vung Tau Province in Q4 2023. This lifted the total Clever Box store count to six.

TLG’s 2023 results

VND bn 

Q4 2022

Q4 2023

YoY

2022

2023

YoY

2023/ 2023F

2023F

 Net revenue 

741

689

-7%

3,521

3,462

-2%

87%

3,986

Domestic 

563 

527 

-6%

2,676 

2,617 

-2%

86%

3,055 

Exports

178

162

-9%

845

845

0%

91%

931

 Gross profit 

296

296

0%

1,524

1,513

-1%

88%

1,727

 SG&A expenses 

-308

-264

-14%

-1,058

-1,087

3%

90%

-1,212

 Operating profit 

-12

32

-364%

466

425

-9%

83%

515

 Interest expense 

-3

-3

8%

-9

-18

101%

131%

-14

 Net other gain/loss 

10

10

-6%

49

45

-10%

185%

24

 NPAT-MI

-3

28

N.M.

401

356

-11%

85%

420

 Gross margin % 

40.0%

42.9%

 

43.3%

43.7%

 

 

43.3%

  SG&A as % sales  

41.6%

38.3%

 

30.0%

31.4%

 

 

30.4%

  Operating margin %  

-1.6%

4.6%

 

13.2%

12.3%

 

 

12.9%

  NPAT-MI margin %  

-0.4%

4.1%

 

11.4%

10.3%

 

 

10.5%

Source: TLG, Vietcap forecast

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