- 2024-10-31T00:00:00
- Company Research
ACG announced its 9M 2024 results with net revenue of VND2,765bn (USD110.6mn; +6% YoY; 71% of our 2024F forecast) and NPAT-MI of VND330bn (USD13.2mn; +32% YoY; 62% of our 2024F forecast). In Q3 2024, net revenue was VND1,044bn (USD41.8mn; +2% QoQ, +8% YoY) and NPAT-MI was VND130bn (USD5.2mn; +10% QoQ, +24% YoY).
- Q3 domestic sales saw a modest improvement while export sales dipped YoY: 9M net revenue rebounded 6% YoY, largely driven by exports (18% of total sales; +18% YoY) and slower domestic recovery (+4% YoY). In Q3, domestic sales continued to recover QoQ and YoY, further reinforcing our view that the domestic real estate market had bottomed out in Q1 2024. However, the domestic market’s speed of recovery was slower than our expectation. For direct exports, although we understand that the 13% QoQ drop could be attributed to the seasonality factor, we are concerned about the 5% YoY decline in Q3 sales, as we have expected exports demand to be stronger in 2024 vs 2023.
- Q3 GPM declined QoQ, driven by both domestic and exports markets: Q3 GPM dropped to 31.4% from Q2 2024’s 32.5%, driven by lower margins of both the domestic market (down to 31.9% from 32.9%) and the exports market (down to 28.7% from 30.6%). However, 9M GPM still expanded YoY due to stronger demand compared to last year’s low base.
- Q3 SG&A expenses surged QoQ and YoY. Q3 2024’s total SG&A expenses surged 40% QoQ and 28% YoY. Higher Q3 selling expenses were due to higher salary expenses (~40% of 9M 2024 selling expenses) which surged 2.7x QoQ and 47% YoY. Q3 2024 G&A expenses surged due to (1) ~80% QoQ and ~90% YoY higher salary expenses (45% of Q3 G&A expenses), and (2) recognition of bad debt provisions of VND24bn (USD1mn; +3.6x QoQ, +5.6x YoY; 34% of Q3 G&A expenses). Despite the higher YoY Q3 SG&A expenses, 9M 2024 results remained flat YoY as ACG completed expansion of its distribution network in early 2024.
- “Other income/expenses” turned positive in Q3 from a loss in Q2 2024 as ACG recorded one-off expenses related to late VAT tax payments, totaling VND54bn (USD2.2mn) in Q2 (please refer to our Q2 2024 Earnings Flash for more details on these one-off expenses).
Overall, as 9M 2024 results trail our expectations, with revenue and NPAT-MI fulfilling 71% and 62% of our respective forecasts, we foresee downside risks to our current projections, pending a fuller review.
ACG’s 9M 2024 results
VNDbn | Q3 2023 | Q2 2024 | Q3 2024 | QoQ | YoY | 9M 2023 | 9M 2024 | YoY | 2024F | 9M as % of 2024F |
Net revenue | 963 | 1,026 | 1,044 | 2% | 8% | 2,611 | 2,765 | 6% | 3,902 | 71% |
- Domestic | 786 | 833 | 877 | 5% | 11% | 2,185 | 2,263 | 4% | 3,236 | 70% |
- Direct exports | 176 | 193 | 167 | -13% | -5% | 425 | 501 | 18% | 667 | 75% |
Gross profit | 298 | 333 | 328 | -2% | 10% | 769 | 875 | 14% | 1,195 | 73% |
- Domestic | 255 | 274 | 280 | 2% | 10% | 677 | 733 | 8% | 1,035 | 71% |
- Direct exports | 44 | 59 | 48 | -19% | 10% | 92 | 142 | 54% | 160 | 89% |
Selling expenses | -123 | -110 | -134 | 22% | 8% | -388 | -355 | -8% | -529 | 67% |
G&A expenses | -37 | -36 | -71 | 96% | 92% | -121 | -147 | 21% | -170 | 86% |
EBIT | 138 | 187 | 123 | -34% | -11% | 260 | 374 | 44% | 496 | 75% |
Financial income | 32 | 44 | 40 | -9% | 23% | 111 | 130 | 17% | 193 | 67% |
Financial expense | -9 | -11 | -7 | -43% | -24% | -38 | -28 | -27% | -41 | 67% |
Other income/expenses | -11 | -52 | 1 | N.M. | N.M. | -1 | -49 | 3,904% | 13 | N.M. |
PBT | 151 | 168 | 157 | -6% | 4% | 332 | 427 | 29% | 661 | 65% |
Tax expenses | -46 | -50 | -27 | -46% | -41% | -82 | -97 | 17% | -132 | 73% |
NPAT-MI | 105 | 118 | 130 | 10% | 24% | 249 | 330 | 32% | 529 | 62% |
GPM | 31.0% | 32.5% | 31.4% |
|
| 29.4% | 31.6% |
| 30.6% |
|
- Domestic | 32.4% | 32.9% | 31.9% |
|
| 31.0% | 32.4% |
| 32.0% |
|
- Direct exports | 24.7% | 30.6% | 28.7% |
|
| 21.7% | 28.3% |
| 24.0% |
|
SG&A/revenue | 16.7% | 14.2% | 19.6% |
|
| 19.5% | 18.1% |
| 17.9% |
|
EBIT margin | 14.3% | 18.3% | 11.8% |
|
| 10.0% | 13.5% |
| 12.7% |
|
EBITDA margin | 17.0% | 20.7% | 14.2% |
|
| 13.0% | 16.3% |
| 15.6% |
|
NPAT-MI margin | 11.0% | 11.5% | 12.5% |
|
| 9.5% | 11.9% |
| 13.6% |
|
Source: ACG, Vietcap
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