Summary of the 2021 9M results of Dat Xanh Group JSC (DXG VN)
9M/2021 results: highlights
- In Q3/2021, COVID-19 related strict lockdown measures in Vietnam significantly affected DXG’s brokerage business. As for the project development business, the outbreak has prolonged the construction progress of ongoing projects and the paper process of upcoming projects. In general, compared to our previous projection, the 9M performance of the brokerage business has underperformed. The booking process of ongoing projects is relatively unchanged while the launch of new projects has been delayed from Q4/2021 to H1/2022.
- DXG’s net revenue jumped by more than three times to VND7,819bn in 9M/2021 thanks to strong booking activities from its project development business while the brokerage business’ sales also increased significantly. Net profit after minority interest climbed to VND881bn versus a loss of VND388bn during the same period last year.
Outlook
- The number of apartments sold in 9M in Ho Chi Minh City and Hanoi City hit a five year low according to CBRE Vietnam. The outbreak of COVID-19 during Q3 and the unresolved licensing issue were two main reasons for this decline. We expect the pandemic will gradually improve thanks to the vaccination rollout while the licensing issue will be fully solved next year. Accordingly, we believe DXG will launch several new projects and its brokerage business will see strong growth next year.
- We revise for 2021F’s profit before tax down 10.5%, and 2021F’s net profit down by 33.7% to VND1,060bn. The brokerage business underperformed due to the delayed implementation of brokerage projects. Notably, the effective corporate income tax was 37.4% in 9M/2021 versus a normal rate of 20% due to a financial income from selling stakes of Dat Xanh Service (DXS). As for 2022, we adjust net profit up by 3.5% compared to the last report to reach VND1,754bn.
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