Company Quarterly Earnings Update – DXG VN – 2020 9M

Summary of the 2020 9M results of Dat Xanh Group JSC (DXG VN)

9M/2020 results highlights:
  • There was no major development in Q3/2020 as DXG has no major projects to book so far in the first nine months. Besides, the company’s brokerage business was impacted by a falling transaction volume in the real estate market caused by the COVID-19. DXG’s sales dropped by 50.6% y/y to VND1,876bn, of which brokerage sales decreased by 43.6% y/y to VND1,287bn. However, DXG bore a loss of VND526bn from divestment at a subsidiary company, causing a net loss of VND388bn in 9M/2020.
  • In Q3/2020, DXG has launched a sales campaign for one project, namely Opal Skyline Binh Duong province, with a total of 1,630 units, and has sold 1,400 units. Besides, there are three other projects, including Opal Boulevard apartment, St. Moritz apartment, and Long Thanh project (land lot project). These projects are sold out or partly sold and can generate profit from 2021 onwards.
  • By the end of 9M/2020, cash and cash equivalents made up 8.4% of total assets. Financial leverage was moderate with a D/E ratio of 0.66x and a D/A ratio of 0.27x.
  • DXG’s results were not favorable in 2020 due to the construction license issues in HCMC that affected its schedule to implement new projects and the impact of COVID-19 on the company’s brokerage business. However, we think these issues will be eased from 2021 onwards, providing the company with a substantial recovery period. Even without these developments, the booking of sold projects will provide DXG with strong earnings in 2021 and 2022. As a result, we expect the company will bear a loss of VND186bn in 2020. However, DXG’s net profit will surge to VND1,938bn in 2021.

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