FREE

HAX - MG development and land transaction are the key focus in H2-2025

Q1-FY25: Earnings came in significantly below expectations due to a decline in MBZ distribution market share and margin compression in the MG segment amid the launch of a large number of new MG dealerships.
• Net revenue reached VND 959 bn (-7.6% YoY), significantly below projections, entirely due to the sharp decline in the MBZ segment (-28.3% YoY) — a result of both the weakening market share of Mercedes-Benz in Vietnam and HAX’s own distribution share. A bright spot came from strong MG growth (+27.4% YoY), driven by aggressive dealership expansion (5 out of 15 new dealerships opened this quarter), though not enough to offset the overall decline in MBZ.
• NPAT-MI reached only VND 5.0 bn (-76.9% YoY). HAX launched 5 out of its planned 15 MG dealerships nationwide in Q1-FY25, accompanied by aggressive demand-stimulating strategies such as price discounts (gross margin down 218bps YoY), increased advertising, and dealer incentives. However, sales have yet to meet expectations during the ramp-up phase. Additionally, rising fixed costs (depreciation, staff expenses) associated with network expansion have further pressured MG segment margin.
FY25 Outlook: Gradual QoQ recovery expected toward year-end as HAX gains better control over its rapidly expanded MG dealership network.
• We expect the “post-registration fee cut” sales trough (Sep–Nov 2024) to gradually fade from Q2-2025, similar to trends seen in 2022 and 2023, supporting stronger QoQ growth for both MBZ and MG segments.
• HAX will continue to focus heavily on developing the MG segment as a new growth pillar to replace the declining MBZ business. The company has already completed 5–7 new MG dealership openings out of a total of 17 planned in H1-2025, leading to short-term volatility in MG revenue and earnings. We expect HAX to improve MG revenue per dealership and optimize discounting and promotional spending from Q2-2025 onward.
• Accordingly, we forecast HAX’s Q2-FY25 results with net revenue of VND 1,722 bn (+53.4% YoY) and NPAT-MI of VND 24 bn (+216.3% YoY). Key drivers include the auto market rebound after a weak Q1 and momentum from an expanded MG dealership network.
• The potential sale of the Vo Van Kiet land plot (at no less than VND 180 mn/m²) could lead to upside in HAX’s revenue and net profit forecasts, as the company has signaled plans to accelerate this activity in the remainder of 2025.
• We forecast HAX’s 2025 net revenue at VND 6,295 bn (+14.2% YoY), with NPAT-MI and EPS reaching VND 94 bn (-24.8% YoY) and VND 875, respectively.
Outlook & Recommendation
Amid the post-COVID downturn in the auto sector and declining MBZ distribution share, HAX has found a growth catalyst in MG—its “guiding light” to recover momentum lost over the past five years. However, as initial incentives from MG taper off, HAX’s net profit growth is expected to decelerate beyond 2025. The planned divestment of its 6-hectare land plot, with multiple signals of a near-term transaction at a price significantly above book value, is seen as a major earnings catalyst for 2025.
We have performed a valuation for HAX employing a 50:50 weighting of the long-term Discounted Cash Flow (DCF) method and the comparative Price-to-Earnings (P/E) approach. The target price for HAX over the next 12 months is set at VND 17,200 per share (including expected cash dividend of VND 800/share), corresponding to a forward P/E ratio of 18.7x for 2025. Based on the closing price as of July 09th, 2025, we recommend an ACCUMULATE rating for HAX.