KDH released Q3 2022 results with net revenue of VND803bn (USD32.8mn; -33% YoY) and NPAT-MI of VND352bn (USD14.4mn; +11% YoY), which were driven by deliveries of ~42 units at the Classia project in Thu Duc City, HCMC. For 9M 2022, the company reported net revenue of VND1.7tn (USD68.5mn; -47% YoY) and NPAT-MI of VND983bn (USD40.1mn; +25% YoY). We note KDH’s Q1 2022 NPAT-MI was mostly supported by a VND308bn (USD12.6mn) non-cash gain from a land plot consolidation, while Classia was the main revenue and profit contributor in Q2 2022 and Q3 2022.

We mainly attribute the 47% YoY decline in 9M 2022 net revenue to a lower number of delivered units YoY. KDH’s gross margin improved to 64.7% in 9M 2022 vs 41.5% in 9M 2021, which was mainly thanks to sales of low-rise units at Classia that have higher margins vs handovers of high-rise projects Safira and Lovera Vista in 9M 2021. EBIT margin (51.3% in 9M 2022) was slightly lower than our expectation, while financial expenses in 9M 2022 were 36% higher than our full-year forecast primarily due to Q3 2022 discounts for early payments that amounted to VND49.3bn (USD2.0mn).