- VEA announced its H1 2022 results, including revenue of VND2.2tn (USD980mn; +10% YoY) and NPAT-MI of VND3.2tn (USD139mn; +2% YoY), which fulfilled 53% and 54% of our respective full-year forecasts. 

- VEA’s NPAT-MI growth in H1 2022 was driven by a 3% YoY increase in shared profits from associates, which we attribute to the robust sales growth of passenger cars (4W) from Toyota Vietnam and Honda Vietnam of 47% YoY and 73% YoY, respectively. As a result, Toyota Vietnam’s earnings (12% of VEA’s Q2 2022 NPAT-MI) increased 16% YoY in H1 2022. We believe the strong growth in automobile sales was partially driven by the Government’s policy to reduce registration fees for domestically assembled cars by 50% that officially expired on June 1, 2022, in turn pushing temporary 4W demand. 

- While Honda 4W sales were positive, its motorbike (2W) sales in Q2 2022 decreased -6% YoY despite a volume surge in Q1 2022, which could be due to (1) higher costs of input materials such as metal, plastics and chemicals, in addition to (2) a supply shortage, in our view. As a result, Honda Vietnam's net profit (73% of VEA’s Q2 2022 NPAT-MI) contracted by 6% in Q2 2022.