Analyst Pin-board VSC – Q2-FY20 Business Update: Earnings Trailed Our Forecasts Due To Weaker-Than-Expected Profit Margins Expansion
VSC has reported Q2-FY20 financial results with total revenue of VND393bn, which was down by 17.1% from the last year’s figures while PBT declined by 13.2% YoY to VND74bn. With these results, VSC has completed 51.7% and 58.3% of full-year guidance for revenue and PBT, while corresponding fulfillment rates of our FY20 forecasts stood at 48.9% and 44.1%. Generally speaking, softer-than-expected quarterly profit margins, though did show some improvements on an annual basis as expected, was the main reason why VSC’s recent results missed our forecasts. This level of profit margins was attributable to a significant surge in selling expenses, which presumably indicates a stiffening competition and a fundamental change in the company costs’ structure. Therefore, we cut our FY20/FY21 earnings forecasts by 2.8%/2.6% to VND243bn/VND266bn.
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