VIC – Resilient property sales and retail leasing segments, plus Chairman’s grants, support 2023 earnings – Earnings Flash & Analyst Meeting Note
  • 2024-02-01T00:00:00
  • Company Research
  • VIC announced 2023 results with revenue of VND161.6tn (USD6.7bn; +59% YoY) and NPAT-MI of VND2.06tn (USD85mn; -77% YoY), fulfilling 91% and 100% of our respective forecasts. We foresee an insignificant change to our 2024F NPAT-MI forecast, pending a more comprehensive review.
  • VIC’s 2023 bottom-line result was mainly supported by 1) strong property sales and retail leasing segments and 2) other gains resulting from the Chairman’s grants of VND20.6tn/USD848mn to VinFast (Nasdaq: VFS).
  • Property sales and retail leasing segments: Please find more details in our January 30 VHM Earnings Flash, and January 30 VRE Earnings Flash. 
  • Hospitality segment: The YoY improving result in 2023 was in line with our expectation. The segment’s 2023 revenue was VND8.96tn (USD369mn; +33% YoY) and EBIT loss was VND4.9tn (USD202mn) vs the 2022 EBIT loss of VND5.9tn (USD242mn).
  • Industrial segment: The segment’s 2023 revenue (VND28.4tn/USD1.2bn; +2.2x YoY) and EBIT loss (VND33.5tn/USD1.4bn) surpassed our respective forecasts by 17% and 14%, mainly due to higher EV deliveries in Q4 2023 vs our projection (VinFast delivered over 34,800 EV units in 2023 vs our projection of 30,000 units).
  • Capital raising: Per management, VIC has raised around VND78tn (USD3.2bn) of funding in 2023 excluding revolving loans, which includes (1) USD239mn of VFS’s proceeds from the de-SPAC process, and investment from VFS’s strategic investor Gotion Inc., (2) grants from the Chairman (VND20.6tn/USD848mn in 2023), (3) new bond issuances (VND15.4tn/USD634mn domestic bonds, and USD250mn exchangeable bonds), and (4) bank borrowings and convertible debenture. In addition, VIC was granted a credit line of total VND70tn (USD2.9bn) from commercial banks by end-2023. 
  • Per management, VIC continues to look for various capital raising plans, including (1) tapping domestic markets (such as domestic bond offerings and domestic bank financing), (2) international debt financing, (3) accessing equity capital markets, particularly in the US for VFS, (4) Chairman’s grants (including net proceeds from the upcoming sales of VFS shares), and (5) opportunistic divestment of select assets.
  • Debt balance: As of end-2023, VIC’s total debt was VND213tn (USD8.8bn), with USD-denominated debts accounting for 42.2% of total debt. Debts maturing within 12 months included (1) revolving bank loans of VND36.7tn (USD1.5bn), and (2) corporate bonds, and other loans amounting to VND77.7tn (USD3.2bn; in which ~45% are secured for refinancing and ~35% in discussion for refinancing, per management).
  • If excluding VHM and VRE, VIC’s long-term loans and bonds set to mature within 12 months as of end-2023 were VND66.6tn (USD2.7bn), in which corporate bonds were VND52tn (USD2.1bn; including a total of USD1.3bn from three exchangeable bonds/EBs having the right to redeem in the next 12 months alongside the right to exchange into listed shares) and syndicated loans were VND13tn (USD551mn).

Figure 1: VIC’s 2023 results

VND bn

2022

2023

YoY% Growth

2023F

2023 as % 

of 2023F

Net revenue

101,794

161,634

59%

177,267

91%

  • Property sales

54,921

94,320

72%

115,319

82%

  • Leasing

7,669

9,125

19%

7,949

115%

  • Hospitality

6,724

8,962

33%

9,145

98%

  • Industrials

13,058

28,421

118%

24,248

117%

  • Others

19,421

20,806

7%

20,606

101%


 

 

 

 

 

EBIT

-10,631

-3,126

N.M.

8,482

N.M.

  • Property sales

26,293

27,874

6%

37,950

73%

  • Leasing

3,718

4,810

29%

4,613

104%

  • Hospitality

-5,889

-4,909

N.M.

-4,965

99%

  • Industrials

-32,892

-33,471

N.M.

-29,275

114%

  • Others

-1,861

2,570

N.M.

159

1613%

 

 

 

 

 

 

Financial income

33,048

21,197

-36%

18,473

115%

Financial expenses

-14,326

-22,518

57%

-21,211

106%

Net other gain (loss)

4,751

18,225

284%

7,000

260%

PBT

12,756

13,681

7.3%

12,745

107%

Tax expenses

-10,711

-11,630

9%

-12,634

92%

PAT

2,044

2,051

0%

111

1842%

Minority interest

-6,738

-12

N.M.

-1,943

1%

NPAT-MI

8,782

2,063

-77%

2,054

100%

 

 

 

 

 

 

EBIT margin

-10.4%

-1.9%

 

4.8%

 

  • Property sales

48%

30%

 

33%

 

  • Leasing

48%

53%

 

58%

 

  • Hospitality

-88%

-55%

 

-54%

 

  • Industrials

-252%

-118%

 

-121%

 

 

 

 

 

 

 

PBT margin

12.5%

8.5%

 

7.2%

 

PAT margin

2.0%

1.3%

 

0.1%

 

Effective tax rate

84.0%

85.0%

 

99.1%

 

NPAT-MI margin

8.6%

1.3%

 

1.2%

 

Source: VIC’s consolidated financial statements, Vietcap forecast (updated November 17, 2023)

Figure 2: VIC’s total debt breakdown by maturity (VND tn) as of end-2023

Source: VIC, Vietcap

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