- VRE reported a strong YoY improvement in its H1 2023 results with net revenue (of which the retail leasing segment accounted for 94%) increasing 28% YoY to VND4.1tn (USD174.4mn) and NPAT-MI surging 76% YoY VND2.0tn (USD85.8mn). As H1 2023 NPAT-MI completed 50% of our full-year forecast, we foresee insignificant change to our forecast, pending a fuller review.

- In Q2 2023, VRE’s net revenue was VND2.2tn (USD92.1mn; +12% QoQ & +17% YoY) and its NPAT-MI was VND1.0tn (USD42.4mn; -2% QoQ & +29% YoY). The slight QoQ decline in NPAT-MI was mainly due to 5% QoQ lower retail leasing gross profit, which was partly offset by higher QoQ property sales recognition.

- Retail leasing gross margin was 57.8% in Q2 2023 vs 61.7% in Q1 2023 and our 2023F forecast of 57.7%. Per management, the lower QoQ retail leasing gross margin in Q2 2023 was mainly due to a QoQ increase in energy costs resulting from summer weather.

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