VRE announced strong Q1 2023 results with net revenue of VND1.94tn (USD82.3mn; +42% YoY & -7% QoQ) and NPAT-MI of VND1.0tn (USD43.4mn; +171% YoY & +29% QoQ) that were mainly driven by the robust performance of the retail leasing segment. Management also targets strong 2023 NPAT growth of 68%-87% YoY, beating our current forecast of 39% YoY.

Cost saving initiatives and higher efficiency bolstered the retail leasing segment’s strong profit growth in Q1 2023. According to management, footfall at VRE’s malls in Q1 2023 was approximately 47 million, which was equivalent to the pre-COVID level in Q1 2019. In Q1 2023, retail leasing revenue was VND1.91tn (USD81.1mn; +54% YoY & flat QoQ) while gross profit surged to VND1.2tn (USD50.0mn; +107% YoY & +17% QoQ). VRE’s Q1 2023 retail leasing revenue and gross profit completed 24% and 27% of our respective full-year forecasts.