Earnings Report /
Vietnam

Haxaco: Favourable business conditions support strong growth

  • Q2 22 performance – Strong sales helped H1 22 results meet c80% of the 2022 target

  • 2022 outlook: Favourable conditions support sales growth

  • Our target price is VND26,500. Adding a cash dividend of VND500, the 12-months expected return is 9.8%; Accumulate

Rong Viet
26 August 2022
Published byRong Viet

A 50% reduction in registration fees for domestically produced cars, which expired in H1 22 and rising private car demand after the Covid-19 pandemic helped HAX sales growth by 23.3% yoy in Q2 22 to VND1,546bn. Q2 22 NPAT-MI surged to VND81bn (+1,287 % yoy) thanks to higher average selling prices and huge financial profit from bank deposit ‘s interest (VND11.9bn).

2022 sales forecast at VND6,043bn (+8.9 % yoy) based on: 1) favourable business conditions; and 2) higher market share thanks to the launching of the new showroom "Mercedes-Benz Haxaco Cần Tho". Accordingly, 2022 NPAT-MI of HAX should reach VND280bn (+75% yoy), backed by: 1) higher ASP; 2) absence of abnormal expenses related to the Covid-19 pandemic; 3) commissions from Mercedes-Benz.

Applying an FCFF valuation model (50%) and multiples comparison (50%) with an applied P/E of 5.5x, our target price is VND26,500. Adding a cash dividend of VND500, the 12-months expected return is 9.8% compared to the closing price on 25 August 2022. We recommend Accumulate.