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SIP Flash note – OUTPERFORM
15/08/2024 - 4:43:17 CHSAIGON VRG INVESTMENT JSC (SIP VN)
Positive 2Q2024 and 1H2024 results. Revise up 2024 forecast with 7% up in revenue & 5% up in profit. Adjust our target price down by 4% to VND85,300 given a decline in net cash of over VND1.5 trn but a higher valuation for the power segment. Reiterate Outperform rating.
SIP posted a double-digit growth in 2Q2024 with revenue of VND1,937bn (+16% YoY) and NPAT of VND333bn (+18% YoY). In 1H2024, the company recorded impressive growth with revenue of VND3,764 bn (+23% YoY) and NPAT of VND591 bn (+28% YoY), completing 70 and 75% of its targets and 52% and 55% of our forecast, respectively.
Power segment: In 1H2024, power revenue was VND2,915bn (+23% YoY), accounting for 77% of total revenue. Growth mainly came from a 22% increase in volume distributed in industrial parks (IPs), to 1,650 mn kwh which was higher than our expectation. Segmented gross margin decreased slightly by 0.3 pp YoY, to 3.8%.
Services provided in IPs segment: In 1H2024, revenue from services provided in IPs was VND437 bn (+21% YoY), accounting for 12% of total revenue. Segmented gross margin was flat at 55.6%, unchanged compared to 1H2023.
IP land leasing segment: In 1H2024, revenue from IP land leasing went sideways and was recorded at VND190bn, accounting for 5% of total revenue. Segmented gross margin increased strongly by 10.5 pp YoY to 69% which was in line with our forecast. In 1H2024, SIP leased over 19ha, including 16ha at Loc An Binh Son IP and 3ha at Phuoc Dong IP, completing 40% of its leasing target and 54% of our forecast. By the end of June 2024, SIP’s remaining NLA was 1,015 ha, mainly located in Tay Ninh province (769 ha).
In 1H2024, SIP recorded VND72bn of financial profit from selling VRG, GVR and CSM shares and reduced its ownership in these companies from 23.4% to 21.76%, 0.21% to 0.08% and 8.29% to 8.04%, respectively.
In 2Q2024, SIP’s total debts increased by around VND1 trn, to over VND3 trn mainly because the company had a new loan of VND783 bn from Vietcombank to finance for the clearance and compensation of Phuoc Dong Boi Loi – Phase 3. Thus, Net cash/Equity ratio reduced from 64% to 27.9% in this quarter.
