VEA - Earnings decrease 18% YoY, broadly in line with our expectations – Earnings Flash
  • 2024-01-30T00:00:00
  • Company Research
  • VEA announced its 2023 results, including revenue of VND3.8tn (USD157mn; -19% YoY) and NPAT-MI of VND6.2tn (USD255mn; -18% YoY), fulfilling 95% and 97% of our respective full-year forecasts. We see no material risk to our current projection, pending a more comprehensive review. 
  • In Q4 2023, profit from associates decreased 32% YoY, which dragged PBT to decrease 36% YoY. On a QoQ basis, PBT increased 2% QoQ, driven by 25% QoQ growth in associate profits which was partially offset by a 5% QoQ decrease in financial income, primarily interest income. In 2023, VEA’s net cash accounted for 48% of its total assets.
  • In Q4 2023, Honda Vietnam’s profit (78% of VEA’s 2023 NPAT-MI) jumped 26% QoQ, in addition to a 39% QoQ surge in Ford Vietnam’s profits. Meanwhile, Toyota Vietnam’s profit dropped 6% QoQ. Regarding passenger car sales volume, Q4 2023 saw a QoQ surge in sales volume across associates due to extensive discounts and promotions in the arrival of the peak seasons, and the Government’s registration fee cut policy ending on December 31, 2023. Honda posted the strongest performance among manufacturers as its sales volume soared 59% YoY and 56% QoQ from Q4 2022’s low base. On the other hand, Toyota and Ford’s car sales volume declined 28% QoQ and 11% QoQ, respectively, which we mainly attribute to their higher selling prices of key flagship models vs other brands which have local assembled models such as Honda. Honda motorbike (2W) sales volume also increased 14% QoQ in Q4 2023 backed by stronger consumer sentiment regarding the upcoming Lunar New Year holidays.
  • We note that VEA has booked a VND645bn provision in Q4 2023 at the parent level for the non-performing loans to subsidiaries and associates that were deemed a qualified audit opinion previously.

VEA’s Q4 and 2023 results

 VND bn

Q4 2022

Q4 2023

YoY

QoQ

2022

2023

YoY

2023/ Vietcap's 2023F

Revenue

1,267

974

-23%

10%

4,747

3,843

-19%

95%

EBIT

-95

-274

N.M.

N.M.

-16

-236

N.M.

N.M.

Associate profits     

2,370

1,607

-32%

25%

6,985

5,639

-19%

103%

Honda

2,050

1,465

-29%

26%

5,975

4,915

-18%

103%

Toyota

160

51

-68%

-6%

735

309

-58%

88%

Ford + Others

160

92

-43%

39%

276

414

50%

125%

Other non-operating profits 

294

304

3%

-5%

875

1,137

30%

87%

PBT

2,569

1,637

-36%

2%

7,844

6,540

-17%

97%

NPAT-MI

2,506

1,560

-38%

-2%

7,595

6,234

-18%

97%

 

 

 

 

 

 

 

 

 

Sell-out performance

 

 

 

 

 

 

 

Honda 2W 

(‘000 units)

715

579

-19%

14%

2,408

2,089

-13%

99%

Honda 4W 

5,502

8,732

59%

56%

30,645

23,802

-22%

105%

Toyota 

27,221

19,475

-28%

58%

92,625

59,207

-36%

101%

Ford

13,329

11,838

-11%

31%

28,847

38,322

33%

107%

Source: VEA, Vietnam Automobile Manufacturers' Association (VAMA), Vietnam Association of Motorcycle Manufacturers (VAMM), Vietcap’s estimates.

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