SIP - 9M earnings behind our forecast; cash inflow from IP land sales meets expectation

- SIP announced Q3 2023 results with revenue of VND1.7tn (USD72mn; +13% YoY and +3% QoQ) and NPAT-MI of VN194bn (USD8.2mn; +1% YoY and -25% QoQ). The top-line YoY increase was thanks to a 15% increase in revenue for the energy & water services segment. Meanwhile, the bottom-line inched up only 1% YoY mainly due to a lower financial income.

- For 9M 2023, SIP’s revenue increased by 4% YoY to VND4.8tn (USD202mn) while its NPAT-MI declined by 9% YoY to VND617bn (USD8.2mn), fulfilling 74% and 65% of our full-year forecasts. Pending a more extensive review, we foresee slight downside risk to our 2023F forecasts as 9M 2023 GPM was behind our expectation.

- However, the cash inflow from IP land sales in 9M 2023 remained resilient, increasing by 71% YoY to VND527bn (USD22mn) and completing 77% of our full-year forecast. SIP finalized a 20-ha lease contract in Phuoc Dong IP in 9M 2023 (vs our 2023F IP land sales forecast of 36 ha).