DIG - Handovers at Nam Vinh Yen project boost Q2 2021 results

DIG posted modest Q2 2021 results with net revenue of VND616bn (USD27mn; -3% YoY) and NPAT-MI of VND53bn (USD2.3mn; +10% YoY) that were mainly supported by handovers at the Nam Vinh Yen project, as we expected. As a result, DIG’s H1 2021 net revenue grew 24% YoY to reach VND1.1tn (USD48.5mn) while its NPAT-MI reached VND94bn (USD4.0mn; + 69% YoY), which were mainly thanks to property handovers at the Gateway Vung Tau and Nam Vinh Yen projects. Although H1 2021 earnings achieved 10% of our full-year NPAT-MI forecast of VND908bn (USD39.5mn; +28% YoY), we continue to expect H2 2021 earnings to skyrocket in accordance with the recognition of the sale of a 31-ha land plot on Dai Phuoc Island.

Figure: DIG’s H1 2021 results

VND bn	Q2 2020	Q2 2021	YoY Growth	H1 2020	H1 2021	YoY Growth	2021F	H1 2021 as % of 2021F
Revenue	637	616	-3%	899	1,116	24%	1,302	86%
Gross profit	156	215	38%	218	338	55%	573	59%
SG&A expenses	60	89	49%	117	146	24%	338	43%
Financial expenses	9	38	307%	14	35	156%	113	30%
Divestment gains*	0	0	0%	0	0	0%	1,025	0%
Profit from associates	(35)	16	N.M.	(34)	16	N.M.	(29)	N.M.
Other gains/loss	9	(61)	N.M.	17	(65)	N.M.	19	N.M.
Profit before tax	68	63	-7%	81	119	48%	1,135	11%
Profit after tax	49	53	8%	55	96	74%	908	11%
NPAT-MI	48	53	10%	56	94	69%	908	10%

Gross margin	24%	35%		24%	30%		44%
SG&A exp./Sales	9%	14%		13%	13%		26%
NPAT-MI margin	8%	9%		6%	8%		70%
Divestment gains as % of PBT	0%	0%		0%	0%		90%

Source: Company’s financial statements, VCSC forecast. (*) Divestment gains are recorded as a part of financial income or other income on the company’s income statement.