HAX – Eye on Q4 2023 performance
- Q3 2023 sales reached VND1,115 bn (or USD45 mn), went down by -43.4% YoY but recovered by +39.9% QoQ. The lower-than-last year sales is due to the high base effect and challenging business environment. The bottom-line decreased at a higher pace than the top-line, reaching VND8 bn (-86.2% YoY; +166.7% QoQ). The main reason is the surge of General & Administration (G&A) expenses. HAX has not booked commission from Mercedes-Benz Group in 9M2023 yet.
- Because the demand for Mercedes cars is not strong as our expectation, we revise down the 2023/2024F net sales to VND5,087/5,375 bn (-25%/+6% YoY) from VND6,775/6,809 bn in previous forecast. However, we assume HAX will book commissions from Mercedes-Benz group in Q4 2023. These adjustments lead 2023/2024F NPAT-MI to 40%/41% lower than our latest forecast, reaching VND136/145 bn (-43%/+7% YoY), respectively. Correspondingly, the 2023/2024F EPS is revised down to VND1,456/1,557 per share.
- Based on the combination of FCFF (60%) and PER (40%) of 7.6x, our new target price is VND15,500. Adding a cash dividend of VND500, the 12-months expected return is +20.3% compared to the closing price on Oct 30th 2023. Based on 1) the growth outlook of HAX since 2024; and 2) the positive fundamental value of Haxaco has not been priced on the share price movement yet, we recommend to BUY this stock for the long term
Hang Xanh Motors Service Joint Stock Company (HAXACO) is a Vietnam-based car dealer. The Company is a retailer of Mercedes-Benz branded automotives from Germany-based Daimler AG. It also trades used cars. Moreover, the Company is engaged in the offering of repair, maintenance and rescue services for automobiles, as well as the trading of accessories and spare parts used in automotive manufacturing and assembly. In addition, the Company is involved in the manufacturing of motor vehicle bodies, design and renovation of vehicles, along with car leasing. Other activities include freight trucking, insurance agency and real estate trading.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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