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SVC - Margins bounce back, resumed imports another boon - Company Report

In H1 2018, revenue declined 8.6% YoY due to Decree 116, which hampered CBU imports into Vietnam. However, thanks to improved margins, SVC’s NPAT-MI jumped by 65.6% YoY. With CBU imports of Toyota and Ford resuming in July 2018, we expect SVC’s sales to step up in H2 2018, although full-year sales will likely still fall in 2018 vs 2017. Auto GPM should broaden from 1.9% in 2017 to 5.0% in 2018 as a supply shortage due to a lack of imports bolsters dealer bargaining power.