- 2024-01-31T00:00:00
- Company Research
- VHM’s Q4 2023 underlying EBIT (which included a bulk sales transaction at Grand Park with a total pre-tax gain of VND2.8tn/USD116mn and a business cooperation contract/BCC recognized in financial income) was down 93% YoY to VND1.0tn (USD42mn), mainly due to 1) project recognition timing, 2) the majority of deliveries at Ocean Park 2 & 3 under BCCs (which VHM shares profit with BCC partners) having lower margins vs retail/bulk sales, and 3) a one-time cost allocation reconciliation for delivered units.
- In 2023, VHM’s underlying property sales revenue (including BCC and bulk sales transactions recognized as financial income) was VND107.7tn (USD4.4bn; +53% YoY), of which deliveries at Ocean Park 2 & 3 accounted for 53% and 25%, respectively.
- 2023 NPAT-MI was VND33tn (USD1.4bn; +15% YoY) – tracking behind our forecast by 11% mainly due to slower property handovers in Q4 2023 vs our previous projection. However, we foresee insignificant change to our 2024F NPAT-MI forecast of VND27.3tn (USD1.1bn; -17% YoY), pending a fuller review.
- Q4 2023 contracted sales value was VND30.3tn (USD1.2bn; +88% QoQ and +68% YoY), in which bulk sales transactions (at a pipeline project in HCMC and Smart City in Hanoi) accounted for 73%, and retail presales accounted for 27%.
- 2023 contracted sales value surpassed our forecast by 19% at VND87tn (USD3.6bn; -32% YoY; 51% coming from bulk sales). VHM’s unbilled bookings at end-2023 amounted to VND99.7tn (USD4.1bn; +30% QoQ and -7% YoY), with bulk sales accounting for 67%.
- For 2024, VHM expects to launch three new mega projects including Vinhomes Co Loa and Wonder Park (Hanoi) and Vu Yen (Hai Phong), and various social housing projects (unchanged vs its guidance stated at the October 2023 investor call). The guidance for 2024 earnings and presales has not yet been disclosed.
Figure 1: VHM’s 2023 results
VND bn | Q4 2022 | Q4 2023 | YoY | 2022 | 2023 | YoY% Growth | 2023F | 2023 as |
Net revenue | 31,193 | 8,698 | -72% | 62,393 | 103,334 | 66% | 115,088 | 90% |
| 28,692 | 3,909 | -86% | 51,202 | 89,646 | 75% | 104,319 | 86% |
| 2,501 | 4,789 | 91% | 11,191 | 13,688 | 22% | 10,768 | 127% |
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Gross profit | 15,085 | 882 | -94% | 30,696 | 35,590 | 16% | 40,261 | 88% |
SG&A expenses | -1,720 | -2,899 | 69% | -5,076 | -7,656 | 51% | -5,731 | 134% |
EBIT | 13,365 | -2,017 | N.M. | 25,621 | 27,934 | 9% | 34,530 | 81% |
Financial income | 1,490 | 4,913 | 230% | 17,148 | 20,363 | 19% | 16,125 | 126% |
| 245 | 201 | -18% | 1,803 | 1,190 | -34% | 1,056 | 113% |
| 1,245 | 4,712 | 278% | 15,344 | 19,173 | 25% | 15,069 | 127% |
Financial expense | -2,413 | -1,760 | -27% | -4,394 | -3,998 | -9% | -2,845 | 141% |
Other gain/loss | -7 | 176 | N.M. | 670 | -1,066 | N.M. | -1,500 | 71% |
PBT | 12,467 | 1,323 | -89% | 38,643 | 43,244 | 12% | 46,311 | 93% |
PAT | 8,952 | 891 | -90% | 29,162 | 33,287 | 14% | 37,049 | 90% |
NPAT-MI | 8,928 | 826 | -91% | 28,831 | 33,126 | 15% | 37,036 | 89% |
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Gross margin % | 48.4% | 10.1% |
| 49.2% | 34.4% |
| 35.0% |
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SG&A as % sales | 5.5% | 33.3% |
| 8.1% | 7.4% |
| 5.0% |
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EBIT margin % | 42.8% | N.M. |
| 41.1% | 27.0% |
| 30.0% |
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Effective tax rate % | 28.2% | 32.6% |
| 24.5% | 23.0% |
| 20.0% |
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NPAT-MI margin % | 28.6% | 9.5% |
| 46.2% | 32.1% |
| 32.2% |
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Source: VHM, Vietcap forecast (last updated November 16, 2023). Note: (*) Vingroup signed a business cooperation contract (BCC) with VHM to fully transfer the economic interest of real estate developments that are not injected into VHM due to the complexity of paperwork. Thus, VHM records all gains via financial income.
Figure 2: Property segment’s revenue (VND tn)
Source: VHM, Vietcap compilation. Note: Adjusted revenue includes (1) revenue recognized as property revenue, (2) revenue from BCC and (3) bulk sales recognized as financial income.
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