Q2 profits of Vietnam’s listed companies drop 13%

The Q2 after-tax profits of companies listed on Vietnam’s three exchanges HoSE, HNX, UPCoM went down 12.9% year-on-year, according to leading broker VNDirect.

But the companies have been doing well in successive quarters of late, VNDirect said, noting that the Q2 gross profit margin of listed firms (excluding banks) rose to 16.5% from 15.4% in Q1.

Thirteen firms in the VN30 basket recorded post-tax profit growth in Q2, led by tickers Vinhomes JSC - VHM (+1,348% year-on-year), Sacombank - STB (+139%) and SSI Securities - SSI (+64%).

In contrast, after-tax profits of Mobile World Investment Corporation (MWG) and Masan Group (MSN) dropped sharply by 98% and 89% compared to the same period last year, respectively.

Steelmaker Hoa Phat Group's (HPG) profit went down 64% year-on-year, while Novaland (NVL) recorded a Q2 loss of VND153 billion ($6.44 million).

Regarding sector or industry-wise business results, VNDirect says that real estate and financial services have led the market's profit growth. Accordingly, after Q1 profits fell year-on-year, financial services rebounded with strong growth in Q2 with an increase of 943% year-on-year.

The real estate industry recorded a 41% year-on-year increase in after-tax profits. This group contributed 3.8 percentage points to the profit growth of the whole market, mainly on the back of VHM's profit of VND9.63 trillion ($405.4 million).

In the opposite direction, gasoline, chemicals, metals and retail slowed the market’s profit growth. After-tax profits of the gasoline group decreased by 74% year-on-year, particularly with the BSR ticker of Binh Son Refining and Petrochemical JSC seeing after-tax profits plunge 87% year-on-year. Chemical businesses also saw a sharp drop in profits with phosphorus and fertilizer prices remaining low.

Meanwhile, after-tax profits of the metal group fell 88% year-on-year in Q2 due to weak demand and significantly lower steel prices compared to one year ago.

Notably, although stocks rallied strongly in general, retail was one of the sectors that saw a big drop in net profit due to weak demand and fierce price competition among the leading enterprises.

Despite this, VNDirect estimates that the market's gross profit margin in Q2 (excluding banks) improved to 16.5% from 15.4% in Q1. Contributors included the real estate industry which saw its gross profit margin increase to 31% from 21.6% in the previous quarter, mainly thanks to VHM's handover of the Vinhomes Ocean Park 2 projects.

Other sectors that saw gross profit margin improvements included supporting services (+4.8 % percentage points), industrial metals (+1.8% percentage points) and food production (+1.9 percentage points).