VTP – Modest Q3 earnings growth despite strong services revenue gain – Earnings Flash
  • 2024-10-31T00:00:00
  • Company Research

* 9M 2024 results: VTP announced its 9M 2024 results with net revenue of VND15tn (USD602.0mn; +4% YoY) and NPAT-MI of VND252bn (USD10.1mn; -9% YoY), fulfilling 73% and 70% of our respective full-year forecasts. As the results are in line with our expectations, we foresee no significant changes to our 2024F forecasts, pending a more comprehensive review.

* Q3 2024 results: Net revenue increased 13% YoY to VND5.4tn (USD217.2mn), driven by significant 30% YoY revenue growth in the services segment despite YoY lower trading revenue. However, NPAT-MI increased by only 4% YoY to VND107bn (USD4.3mn), which was caused by (1) 29% YoY higher SG&A expenses (which we mainly attribute to VTP spending on developing its customer base) and (2) 77% YoY lower net financial income. Additionally, the 0.5 ppts YoY improvement in blended GPM was mainly driven by a more favorable revenue mix (the revenue contribution of the higher margin segment (services segment) increased to 62% of total revenue in Q3 2024 vs 54% in Q3 2023).

* Segmental performance in Q3 2024:

- Services segment:

+ Service net revenue increased 30% YoY in Q3 2024, which we believe was primarily driven by strong YoY growth in parcel volume. According to the Ministry of Information and Communications, total parcel volume in Vietnam increased by 23% YoY in Q3 2024. In addition, the gross merchandise value from the top five e-commerce marketplaces in Vietnam (i.e., Shopee, Lazada, Tiktok Shop, Tiki, and Sendo) increased by 16% in Q3 2024, and the total number of sold products rose by 29% YoY, per Metric – a third-party market research firm.

+ Service GPM slightly contracted by 0.2 ppts YoY to 8.1% in Q3 2024: We mainly attribute this to higher depreciation expenses YoY (due to incorporating depreciation expenses from transportation vehicles acquired in 2023), which was partly offset by decreased gasoline prices, proxied by an 8% YoY decline in the average Vietnamese RON-95 gasoline retail price.

- The trading segment recorded a 6% YoY decline in net revenue in Q3 2024, due to VTP scaling down its mobile phone card selling business earlier this year.

VTP’s Q3 2024 & 9M 2024 results

VND bn

Q3 2024

YoY

9M 2024

YoY

9M 2024/

Vietcap’s 2024F

Net revenue

5,430

13%

15,049

4%

73%

Services

3,373

30%

9,059

27%

71%

Trading

2,057

-6%

5,990

-18%

76%

Gross profit

278

24%

669

5%

77%

Services

273

26%

660

7%

76%

Trading

5

-25%

10

-54%

124%

SG&A expenses

-149

29%

-381

13%

77%

EBIT

129

19%

288

-3%

76%

Net financial income

4

-77%

29

-43%

42%

PBT

134

4%

317

-9%

70%

NPAT-MI

107

4%

252

-9%

70%

Gross profit margin

5.1%

0.5 ppts

4.4%

0.1 ppts

 

Services

8.1%

-0.2 ppts

7.3%

-1.3 ppts

 

Trading

0.3%

-0.1 ppts

0.2%

-0.1 ppts

 

EBIT margin

2.4%

0.1 ppts

1.9%

-0.1 ppts

 

NPAT-MI margin

2.0%

-0.2 ppts

1.7%

-0.2 ppts

 

Source: VTP, Vietcap

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