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SIP Flash note – OUTPERFORM
07/02/2025 - 1:52:41 CHSAIGON VRG INVESTMENT JSC (SIP VN)
Flat 4Q2024 and positive 2024 results mainly thanks to growth in the power &water supply segment and financial income. Industrial park leasing in 2024 improved significantly compared to 2023. Keep 2025 forecast and YE2025 target price nearly unchanged at VND95,200/share. Change our rating from Buy to Outperform as stock price has increased by 12% since our last update report in 11/2024.
SIP posted a flat 4Q2024 result with revenue of VND2,066 bn (+8% YoY) and NPAT of VND376bn (+1% YoY). In 2024, the company recorded high growth with revenue of VND7,804 bn (+17% YoY) and NPAT of VND1,278 bn (+27% YoY), completing 161% of profit target and 107% of our forecast. Growth in last year mainly came from the power & water supply segment and financial income.
Power & water supply segment: In 2024, this segment posted revenue of VND6,548 bn (+9% YoY), accounting for 84% of total revenue. Growth mainly came from 6.4% growth in power volume distributed in industrial parks (IPs) while average power price grew by 1.9% YoY, to VND1,846/kwh. Segmented gross margin was 8.2% compared with 10.2% in 2023 mainly due to higher revenue proportion of power revenue generated from IPs which usually has lower margin than roof-top solar power (5.7% vs 45.8%).
IP land leasing segment: In 2024, revenue from IP land leasing slightly increased by 4% YoY, to VND389 bn, accounting for 5% of total revenue given SIP uses annual revenue allocation accounting method. Leasing activities achieved good result in 2024 with 74ha leased (+289% YoY), of which 58 ha at Phuoc Dong IP and 16ha at Loc An Binh Son IP. Last year, the company signed two key leasing contracts, one with an UK textile company for 50ha with leasing rate of USD60-70/sqm/remaining leasing term at Phuoc Dong IP and one with SLP Logistics for 16ha with leasing rate of USD230/sqm/remaining leasing term at Loc An Binh Son IP. By YE2024, SIP’s remaining NLA was 960 ha in Tay Ninh, HCMC and Dong Nai.
In 2024, financial income jumped by 42% YoY, to VND622 bn, of which profit from stock trading and disposal of investment (i.e. selling VRG, GVR, CSM and TRC shares) was nearly VND300bn.
SIP remained good financial health. In 2024, SIP’s total debts increased by over VND1.9 trn, to nearly VND3.6 trn mainly because the company had a new loan balance of VND1,154 bn from Vietcombank to finance for the clearance and compensation of Phuoc Dong Boi Loi – Phase 3 project. Thus, Net cash/Equity ratio reduced from 56.7% to 45.6% in 2024.
Quick comment: We keep 2025 forecast nearly unchanged with estimated revenue of VND8.7 trn (+11% YoY) and NPAT of VND1.3 trn (+4% YoY). Target price at YE2025 is virtually unchanged at VND95,200/share. Change our rating from Buy to Outperform as stock price has increased by 12% from our last update report in 11/2024.
