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Update the business results of the first quarter of 2024 of listed Vietnam companies

Update the business results of the first quarter of 2024 of listed companies.

Specifically, the total profit after tax of the entire floor (1,059 businesses as of May 6) increased by 6.6% over the same period and increased by 3.4% over the most recent quarter, recording the highest profit in the year. 7 quarters (only lower than the first two quarters of 2022).

The growth rate in the first quarter of 2024 has slowed down significantly compared to the 35.3% increase in the fourth quarter of 2023 due to the gradually higher comparison base. After a period of strong fluctuations since the Covid-19 epidemic, profits are entering a period of recovery and more stable growth.

Vietnam business resuts

The profit cycle of industry groups has a clear differentiation: Stock groups started to recover from the bottom: Retail (+367%) and Travel & entertainment (+1,031%). Stock groups maintain positive recovery inertia: Financial services (+103%), Resources (+208%), Telecommunications (+95%), Construction (+125%).

Stock groups that have not returned to the growth trajectory: Real estate (-61.6%) and Electricity, water, petroleum & gas (-49.6%) Stock groups with stable growth: Banks (+ 9.6%), Information Technology (+22.1%).

The banking industry maintains growth but the growth rate is slower:

Net profit after tax in the first quarter of 2024 of listed banks increased slightly by 9.6% over the same period, accounting for 49.2% of the total profit of the entire exchange. NIM continues to be under pressure (-8bps compared to the previous quarter) due to weak credit growth (+2% compared to the beginning of the year, or 15% compared to the same period) while asset quality continues to decline after the improve in the fourth quarter of 2023 due to seasonal factors. Specifically, the ratio of group 2 debt and bad debt to total outstanding debt is 2.23% (+24bps compared to the previous quarter) and 1.94% (+23bps compared to the previous quarter), respectively, close to the peak in the third quarter. /2023 is 1.98%).

Income from foreign exchange trading partly offset the sharp decline from insurance distribution and bad debt recovery activities. In addition, good control of operating costs in the first quarter of 2024 with a CIR (cost/income ratio) of 30.7% (compared to 31% in the first quarter of 2023 and 36% in the fourth quarter /2023) is another factor supporting banks' business results.

Real estate industry decreased sharply due to VHM's decrease in revenue recognition:

Profit after tax in the Real Estate industry dropped sharply by -61.6%, recording the lowest quarterly profit in 5 years. The reason for the sharp decrease in profits was due to a decrease in revenue of -44.9% of sales, a sharp decrease in gross profit margin from 21.9% to 16.2%, in addition to increased sales and management costs.

VHM's decrease in recorded revenue this quarter (revenue -72% of sales, profit after tax -92.4% of sales) is the main reason affecting the entire industry's profits. If not including VHM, the industry's total NPAT increased by 9.5%, but revenue still decreased by -21.6%. VIC (+126% svck), IDC (+355%), DXG (+166%), TCH (+117%), CRV (+134%), AGG (x17) contributed positively to the industry's increase.

Industry groups confirmed bottoming and returning to ROE growth trajectory in Financial and Non-Financial sectors

The Retail industry increased strongly +367% over the same period thanks to the impressive growth of the two leading businesses in the industry: MWG increased strongly +41x over the same period and regained the highest profit in 6 quarters, FRT (+28x ) returned to profit after 3 consecutive quarters of losses. The industry's gross profit margin improved significantly from 15.4% to 17.5%. Interest expenses also decreased from 6.6% of outstanding debt to 3.9% of outstanding debt.

The Tourism & Entertainment industry recovered strongly and returned to profit after a long period of recording losses. HVN recorded a record high quarterly net revenue (+19% svck) thanks to the recovery in both market share and ticket prices, in addition to the sudden income from debt cancellation of subsidiary Pacific Airlines. VJC (+212% svck), ACV (78%), SCS (+30%), AST (+46%) all recorded positive profit growth.

The Financial Services industry continued to grow strongly by +103%, bringing PAT to the highest level since Q2/2022. Operating efficiency improved significantly in the context of stable revenue compared to the previous quarter but NPAT increased by 36.1% thanks to gross profit margin increasing from 52.6% to 60.9%.

The Basic Resources industry recorded a +208% increase in NPAT even though revenue only increased by 5.8%. Leading the growth were the Steel group (HPG +648%, NKG +405%, SMC +759%) and Wood group (ACG +124%, PTB +44%), on the contrary, MSR continued to lose 702 billion VND in the quarter.

Debt tends to be more positive than +95% SVck growth, mainly contributed by VGI's strong increase of 175% thanks to positive growth in foreign markets.

The Construction industry recorded a +125% increase in NPAT, thanks to the improvement of many businesses such as HBC, VCG, CII, LCG, VGC, CTD. Revenue increased by 26% while administrative costs and interest expenses decreased, helping to improve industry profits.

Debt tends to be more positive

Gross profit margin of the Non-financial industry group improved positively to 14.9% from 13.8% in the fourth quarter of 2023 and 14.4% in the first quarter of 2023. Average net profit margin also increased sharply to 5.9%, the highest level in 7 quarters. Among them, the industries that recorded the best improvement were Travel & Entertainment, Telecommunications, Food & Beverages, Retail, and Automobiles & Spare Parts.

The ratio of interest expenses/total debt (Non-financial group) decreased sharply to 5.8% from the peak of 7.8% in Q2/2023. Total interest expenses accordingly decreased from 19.7 trillion VND in the second quarter of 2023 to 15.2 trillion VND in the first quarter of 2024 although the Debt/Equity ratio increased slightly. Falling interest rates are gradually showing a positive impact, helping to reduce interest pressure on businesses.

Interest coverage ratio increased positively, averaging 4.74 times in the first quarter of 2024, compared to 3.21 times in the fourth quarter of 2022. The Debt/Equity ratio was stable compared to the previous quarter at 0.62 times, while gradually increasing profits helped improve the financial health of the business. ROE of the Non-Financial group accordingly improves from 8.2% in the first quarter of 2023 to 10.6% in the first quarter of 2024.

"In general, although some industries such as Real Estate and Electricity, Water, Petroleum & Gas are still in a down cycle, most other industries are gradually recovering with gradually improving financial health. Conclusion The profit results of businesses may have overcome the most difficult period to enter a more stable growth period," the SSI report stated.

(Bao kinh te Do thi)


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