VRE announced its Q3 2022 results with net revenue of VND2.0tn (USD81.8mn; +8% QoQ & +155% YoY) and NPAT-MI of VND793bn (USD32.4mn; +3% QoQ; vs only VND24bn/USD1mn in Q3 2021). We note that Q3 2021 was a very low base due to the fourth wave of COVID-19 in Vietnam that resulted in VRE offering a VND925bn (USD38mn) support package to tenants in that quarter.

For 9M 2022, VRE’s net revenue (of which the retail leasing segment accounted for 94%) was VND5.2tn (USD213.2mn; +15% YoY) with NPAT-MI of VND1.9tn (USD79.4mn; +63% YoY). VRE spent VND1.3tn (USD55.1mn) for a tenant support package in 9M 2021 vs VND464bn (USD18.9mn) in Q1 2022 and a minimal amount in Q2 2022 and Q3 2022.

As 9M 2022 NPAT-MI completed 80% of our full-year forecast, we anticipate insignificant change to our 2022F NPAT-MI forecast of VND2.4tn (USD99mn; +84% YoY). We continue to expect a significantly lower support package YoY from VRE and a further recovery of footfall and in turn tenant businesses during the year-end festive season to support profit growth in Q4 2022