* BWE released its H1 2023 results with revenue of VND1,558bn (USD66.0mn; -1.4% YoY) and reported NPAT-MI of VND350bn (USD14.8mn; -7.7% YoY), which completed 44.7% and 46.1% of our respective full-year forecasts. In Q2 2023, BWE recorded revenue of VND877bn (USD37.2mn; +3.5% YoY) and reported NPAT-MI of VND210bn (USD8.9mn; +3.3% YoY).

* We primarily attribute the slightly lower YoY revenue in H1 2023 to a 37.9% YoY decrease in revenue from the wastewater treatment segment, which outweighed resilient revenue from the water supply segment (+4.0% YoY). Meanwhile, reported NPAT-MI dropped 7.7% YoY as interest expenses surged 76.7% YoY and outweighed financial income increasing 49.9% YoY. According to BWE, VND89bn (USD3.8mn) of revenue from the waste treatment segment was not recorded in H1 2023 results due to incomplete paperwork.

* BWE’s H1 2023 water sales volume increased 1.4% YoY to 91 million cbm, completing 47.6% of our full-year volume forecast (190 million cbm; +4.8% YoY), which was lower than our expectation. We see potential slight downside risk to our 2023F NPAT-MI forecast, pending a fuller review.

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