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DXS - Weak Q4 2022 results due to low property transactions - Earnings Flash

* DXS reported weak Q4 2022 results with net revenue decreasing 32% YoY to VND884bn (USD37.5mn) and a net loss of VND100bn (USD4.2mn) vs Q4 2021’s net loss of VND29bn (USD1.2mn). We attribute the weaker sales to the slowdown of property transactions that was caused by increased interest rates and economic headwinds. In addition, a YoY surge in financial expenses to VND55bn (USD2.3mn; +119% YoY) further dampens DXS’s bottom line in Q4 2022.

* For full-year 2022, DXS’s net revenue decreased 5% YoY to VND4.1tn (USD173.6mn) while its NPAT-MI declined 41% YoY to VND319bn (USD4.2mn) – equivalent to 113% and 77% of our respective forecasts and mainly due to higher-than-expected SG&A expenses and financial expenses. As the Q4 2022 net loss was higher than our forecast, we foresee downside risk to our 2023F earnings forecast as stated in our last Update Report, dated December 1, 2022, pending a fuller review. 

* At end-2022, DXS’s cash and cash equivalents amounted to VND493bn (USD21mn; -72% YoY), and its total debt balance surged 105% YoY to VND2.3tn (USD98mn). As a result, DXS’s net debt/equity ratio increased to 22.0% at end-2022 vs -8.5% at end-2021.

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