- 2024-05-02T00:00:00
- Company Research
- TV2 announced its Q1 2024 results with revenue of VND238bn (+92% YoY; USD9.5mn) and a reported NPAT-MI of VND11bn (+33% YoY; USD0.5mn). These completed 11% and 13% of our respective full-year forecasts for the scenario including Song Hau 2 Project (“SH2P”). Specifically, revenue from the consultancy, EPC, and O&M segment reached VND233bn and completed 12% of our full-year forecast. This is broadly in line with our expectation, given the revenue’s nature of being recognized more towards the end of the year. GPM of ~15% is also within our expectation.
- The upsurge in the topline item, increasing 92% YoY, is due to 101% growth from the consultancy, EPC, and O&M segment, which was mainly driven by 1) TV2 having finished its designing and consulting contract for the 500kV line 3 project, which was handed off in Q1 of this year, and 2) the expedited contribution of the Hau Giang Biomass project as the project is at its peak to maintain the designated COD in December 2024. The substantial increase in this segment outweighs the decreases in mechanical manufacturing and electricity selling segments. The increase in revenue outweighs the corresponding increase in COGS (+105% YoY) to deliver 38% YoY growth in gross profit (12% of our full-year forecast), and subsequently, a 33% YoY increase in NPAT-MI.
- We note that G&A grew 31% YoY, which is predominantly impacted by a 78% YoY increase in TV2’s employee expenses. We believe that this showcases TV2’s readiness and preparation for expanding its scope of work, i.e., gaining more contracts and reserving its expertise for SH2P.
- TV2 announced that it has successfully secured two O&M contracts with a total capacity of 1,380 MW for the Duyen Hai 2 thermal power plant and Houay LaNge hydropower plant (in Laos). As we currently assume an additional 300MW p.a. from this subsegment, we see a potential upside adjustment to our 2024F earnings forecast which might outweigh weaker-than-expected revenue and profit from the electricity selling segment, pending a more comprehensive review.
- We currently have a BUY rating for TV2 with a target price of VND58,300/share for the scenario with SH2P and VND32,000/share for the scenario excluding SH2P.
TV2’s Q1 2024 results
VNDbn | Q1 2023 | Q1 2024 | % YoY | % of Vietcap’s 2024F |
Revenue | 125 | 238 | 92% | 11% |
Consultancy, EPC, O&M | 116 | 233 | 101% | 12% |
Mechanical manufacture | 3 | 2 | -45% | 1% |
Selling eletricity | 5 | 4 | -25% | 17% |
Others | 0 | 0 | -100% | N.M |
COGS | -99 | -203 | 105% | 11% |
Gross profit | 26 | 35 | 38% | 12% |
Consultancy, EPC, O&M | 25 | 34 | 38% | 12% |
Mechanical manufacture | 0 | 0 | -10% | -3% |
Selling eletricity | 0 | 1 | 207% | 16% |
Others | 0 | 0 | N.M. | 0% |
Sales and marketing exp | 0 | -1 | N.M. | 15% |
G&A expenses | -18 | -24 | 31% | 12% |
Financial income | 5 | 6 | 4% | 21% |
Financial expenses | -2 | -2 | 17% | 17% |
In which: Interest expense | -2 | -2 | 17% | 17% |
Share profit/loss fr associates | 0 | 0 | N.M. | N.M |
Net other income/loss | 0 | 0 | N.M. | N.M |
Profit before tax | 11 | 14 | 28% | 13% |
Income Tax Expense | -2 | -2 | 10% | 12% |
NPAT | 8 | 11 | 33% | 13% |
Minority Interests | 0 | 0 | N.M. | N.M |
Reported NPAT-MI | 8 | 11 | 33% | 13% |
% | Q1 2023 | Q1 2024 | YoY Δ ppts |
|
GPM | 20.5% | 14.8% | -5.7 |
|
%SG&A/revenue | 14.6% | 10.4% | -4.1 |
|
OPM | 5.9% | 4.4% | -1.5 |
|
%Effective tax rate | -20.8% | -17.9% | +2.9 |
|
NPM | 6.8% | 4.7% | -2.1 |
|
Source: TV2, Vietcap
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