GMD Update report – N/A

GEMADEPT CORPORATION (GMD VN)

GMD’s Q3/2024 financial results showed significant growth, with net revenue and profit before tax (PBT) for the first nine months reaching 85.5% and 102.5% of the company’s annual targets for 2024, equivalent to 78% and 104% of our projections, respectively. These figures indicate that GMD is likely to surpass our revenue and PBT expectations for the year, supported by a resurgence in global trade that has substantially increased container throughput at GMD’s ports. In response to this positive momentum, GMD issued rights to existing shareholders in October, 2024 to raise additional capital for business expansion and to address bank debt obligations. Given these developments, we will reassess GMD’s business outlook and valuation. Our current target price and ratings will remain suspended until the release of an updated report.

For Q3/2024, GMD reported a revenue of VND1,264 bn (+26.7% YoY), and a gross profit of VND581 bn (+25.1% YoY). PBT reached VND501 bn (+25.9% YoY). In which:

• Port operations segment reported revenue of VND1,095 bn (+35.7% YoY) and gross profit of VND583 bn (+54.2% YoY). The gross margin for this segment reached 53.2%, up by 6.4% from Q3/2023. In contrast, logistics segment experienced a downturn, with revenue of VND169 bn (-22.4% YoY) and gross profit of -VND0.7 bn. This negative gross profit resulted in a decrease in GMD’s overall gross margin to 46% in Q3/2024, a slight drop of 0.6% from Q3/2023.
• Profit from subsidiaries and affiliates was recorded at VND222 bn (+324.7% YoY), primarily due to operational profits from Gemalink port. On the balance sheet, the current value of investment in Gemalink was VND1,886 bn, increasing VND308 bn YTD. 

For 9M2024, GMD achieved a net revenue of VND3,421 bn (+21.6% YoY). However, PBT decreased by 40.2% to VND1,728 bn, largely due to reduced financial revenue from divestments of port assets, which totaled VND336 bn in 2024, down from VND1,844 bn in 2023. Excluding these divestments, the core operational PBT was VND1,392 bn (+33.1% YoY). This positive performance was propelled by: (1) container throughput exceeding expectations in both the Northern and Southern port clusters, (2) operational efficiency following a restructuring phase.