HSG reported weak Q1 FY2019 results with net revenue of VND7.5tn (USD328mn, -4% YoY) and NPAT-MI of VND61bn (USD2.6mn, -82% YoY). Compressed gross margin and high interest expense continued to be the major burdens weighing down profit. More notably, HSG was able to salvage another quarter of loss making thanks to an abnormal gain from asset liquidation. Given the lower-than-expected margin together with a tough ongoing industry landscape, we see downside risk to our FY2019 forecast for HSG.