- VTP announced its H1 2021 results with revenue surging 52% YoY and NPAT-MI rising 7% YoY. The stronger top-line growth was due to an 82% YoY surge (Q2 2021: +12% YoY) in low-margin trading revenue, which was underpinned by phone card sales from the new 300,000 points-of-sale that VTP received from Viettel Telecom in late Q1 2020.

- Service revenue — of which delivery services accounted for 85%-90% (per VTP) — advanced 12% YoY in Q2 2021, which was stronger than 2020’s 7% YoY growth but slower than Q1 2021’s 16% YoY growth. We attribute the QoQ growth deceleration mainly to a smaller contribution from non-delivery logistics services (e.g., cargo logistics and e-fulfillment). Per management, delivery volume grew by a low-teen rate YoY in H1 2021.

- Service GPM shrank by 33 bps YoY to 10.4% in H1 2021 (Q2 2021: 9.7%; +44 YoY bps). We attribute H1 2021’s YoY contraction mainly to a negative service mix as we estimate delivery ASP remained unchanged YoY in H1 2021.

- Although service revenue growth trails our expectations, its margins are tracking ahead of our expectations. As such, we see insignificant changes to our current earnings forecasts, pending a fuller review.