GMD Update report – OUTPERFORM

GEMADEPT CORPORATION (GMD VN)

Strong recovery in trade activities during Q3/2024 boosted demand for goods, leading to positive business results for GMD. Container throughput exceeded expectations, estimated to surpass the average design capacity by 15-20% across GMD’s northern and southern port clusters, enabling the company to optimize operational costs and improve profit margins for 2024 and forwards. To further strengthen its business activities, GMD raised an additional VND3,000 bn from existing shareholders through a rights offering in October 2024. We estimate the fair value of GMD’s stock at VND73,500 per share over the next 12 months, a 20.4% increase from the previous valuation. Compared to the closing price of VND64,700 per share on December 4, 2024, this represents a 15% upside potential, including a cash dividend of VND1,000 per share, with a 2025 P/E of 14.5x and P/B of 1.6x.

GMD reported Q3/2024 results with revenue of VND1,264 bn (+26.7% YoY). Gross profit reached VND581 bn (+25.1% YoY), with gross profit margin of 46%, slightly down by 0.6% compared to Q3/2023 due to negative gross profit from the logistics segment. Profit before tax (PBT)  was VND501 bn (+25.9% YoY).

Container throughput for GMD in Q3/2024 totaled 1.2 million TEUs (+52.8% YoY), driving the company’s revenue growth. In which, the northern port cluster and Phuoc Long-Binh Duong Port handled 687,000 TEUs (+34.5% YoY), contributing to port operations revenue of VND1,095 bn (+35.7% YoY) and gross profit of VND583 bn (+54.2% YoY). The gross profit margin for this segment was 53.2%, up 6.4% compared to Q3/2023. Gemalink Port processed 485,000 TEUs (+89.2% YoY), contributing VND222 bn (+324.7% YoY) in profits from associates, with over 60% of that coming from Gemalink.

For 9M2024, revenue reached VND3,421 bn (+21.6% YoY), while PBT was VND1,728 bn (-40.2% YoY), due to financial income from port divestment recording at VND336 bn in 2024, lower than that of VND1,844 bn in 2023. Excluding this divestment, PBT for core business reached VND1,392 bn (+33.1% YoY), achieving 102.5% of the company’s 2024 plan and 104% of our forecast.