- 2024-04-26T00:00:00
- Company Research
- VRE announced its Q1 2024 results with net revenue (of which the retail leasing segment accounted for 85% and property sales accounted for 12%) of VND2.25tn (USD90mn; -4% QoQ and +16% YoY) and its NPAT-MI at VND1.08tn (USD43mn; +1% QoQ and +6% YoY). The YoY increases were mainly due to higher property sales handovers in the quarter. As Q1 2024 NPAT-MI fulfilled 26% of our full-year forecast, we foresee insignificant change to our 2024F NPAT-MI forecast, pending a fuller review.
- The retail leasing segment reported Q1 2024 results with revenue of VND1.93tn (USD77mn; -1% QoQ and +1% YoY) and gross profit of VND1.16tn (USD46mn; +4% QoQ and -2% YoY) – which are equivalent to 22% and 23% of our respective 2024F forecasts.
- The leasing NOI margin was 72.3% in Q1 2024, declining by 5.7ppts from a high base in Q1 2023 and ~flat QoQ, mainly due to 1) a slight decline in the average occupancy rate (Q1 2024 average occupancy rate was 82.8%, -0.2ppts QoQ and -2.6ppts YoY), 2) increased land rent costs as the Government’s support on land rent waivers at some malls for COVID-19 expired at the beginning of 2024, and 3) increased marketing costs. Management expects the leasing NOI margin to be lower QoQ in Q2 2024G due to seasonal energy costs, and to rebound in H2 2024G supported by an improvement in overall occupancy.
- The property sales segment recorded Q1 2024 revenue of VND277bn (USD11mn; vs Q4 2023’s VND267bn/USD11mn and Q1 2023’s VND3bn/USD0.1mn), and gross profit of VND98bn (USD4mn) as 45 shophouses were delivered in Q1 2024 vs 1 unit in Q1 2023. According to management, VRE expects to record 2024G segment revenue of VND700bn (USD28mn).
- Management stated in the April 2024 AGM that VRE targets to open six new malls in 2024G (unchanged vs its guidance stated in the October 2023 investor call). Of these, four malls (including Vincom Mega Mall Grand Park with GFA of ~45,200 sqm and secured occupancy of 87% as of April 2024; and three Vincom Plaza malls) are expected to open in June 2024G and two malls are expected to open in Q4 2024G. We currently forecast VRE’s total retail leasing GFA to increase to 1.85/1.97 million sqm by the end of 2024/25F vs 1.75 million sqm by end-2023.
VRE’s Q1 2024 results
VND bn | Q1 | Q2 | Q3 | Q4 | Q1 | Q1 2024 QoQ | Q1 2024 YoY | 2024F | Q1 as % as 2024F |
Net revenue | 1,943 | 2,173 | 3,333 | 2,343 | 2,255 | -4% | 16% | 8,812 | 26% |
| 1,913 | 1,943 | 1,988 | 1,952 | 1,928 | -1% | 1% | 8,619 | 22% |
| 3 | 197 | 1,304 | 267 | 277 | 4% | 9857% | 193 | 143% |
| 27 | 32 | 40 | 124 | 50 | -59% | 84% | 0 | N.M. |
Gross profit | 1,188 | 1,189 | 1,700 | 1,268 | 1,255 | -1% | 6% | 5,160 | 24% |
| 1,181 | 1,124 | 1,139 | 1,113 | 1,155 | 4% | -2% | 5,070 | 23% |
| 1 | 89 | 578 | 138 | 98 | -29% | 9761% | 90 | 109% |
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SG&A expenses | -108 | -118 | -291 | -263 | -207 | -21% | 92% | -564 | 37% |
EBIT | 1,081 | 1,072 | 1,409 | 1,005 | 1,048 | 4% | -3% | 4,595 | 23% |
Financial income | 224 | 278 | 301 | 343 | 435 | 27% | 94% | 1,093 | 40% |
Financial expense | -100 | -80 | -76 | -74 | -140 | 89% | 40% | -417 | 34% |
Other income | 45 | -1 | 22 | 79 | 25 | -69% | -45% | 0 | N.M. |
PBT | 1,249 | 1,268 | 1,656 | 1,353 | 1,367 | 1% | 10% | 5,271 | 26% |
NPAT-MI | 1,024 | 1,001 | 1,317 | 1,067 | 1,083 | 1% | 6% | 4,164 | 26% |
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Gross margin | 61.2% | 54.7% | 51.0% | 54.1% | 55.7% |
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| 58.6% |
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| 61.7% | 57.8% | 57.3% | 57.0% | 59.9% |
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| 58.8% |
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| 35.7% | 45.0% | 44.3% | 51.5% | 35.3% |
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| 46.6% |
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EBIT margin | 55.6% | 49.3% | 42.3% | 42.9% | 46.5% |
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| 52.2% |
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NPAT-MI margin | 52.7% | 46.1% | 39.5% | 45.6% | 48.0% |
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| 47.3% |
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Source: VRE’s financial statements, Vietcap forecast (last updated February 21, 2024)
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