- TDM announced its Q2 2025 results with revenue of VND100bn (-47% YoY), reported NPAT-MI of VND53bn (+1% YoY), and NPAT from water generation of VND29bn (-44% YoY). The strong decline in revenue was mainly driven by (1) the high base of revenue from material sales in Q2 2024, (2) 9% YoY lower water sales volume, and (3) 22% YoY lower ASP for BWE starting from March 1st. However, the slight increase in NPAT-MI was due to 12.4x YoY financial income from DNW’s dividend and a 29% YoY decrease in financial expenses (in which, provision expenses fell 48% YoY, outweighing a 3x YoY increase in interest expense).
- In H1 2025 TDM recorded revenue of VND200bn (-32% YoY) and NPAT-MI of VND196bn (+2.2x YoY), which are equivalent to 47% and 86% of our respective full-year forecasts and are consistent with preliminary estimates released on July 11, 2025. The surge in NPAT was due to the VND131bn dividend from BWE and DNW.
- H1 2025 sales volume was 34 million cubic meters, -4% YoY vs our full-year forecast of +3% YoY, completing 46.5% of our 2025 forecast.
- Excluding the dividend income, H1 NPAT from water generation is estimated at VND66bn, -26% YoY, 62% of our full-year forecast. We attribute the YoY decrease in NPAT to (1) 15% YoY lower ASP and 4% YoY lower sales volume and (2) a 32% YoY increase in interest expenses; these results outweigh (3) a 23% YoY decrease in depreciation expenses following the full depreciation of nearly VND400bn in fixed assets at the end of 2024 and (3) lower forex loss and provisions for Gia Tan and Biwase Quang Binh.
- M&A Biwase Long An: TDM has made an advanced payment of VND144bn to BWE, fully financed through long-term debt, though it remains undisclosed whether this amount represents the full transaction value. Additionally, TDM announced that it will acquire 20 million shares in Biwase Long An from BWE.
- FX hedging: TDM has secured all of its VND353bn USD-denominated debt, representing approximately 65% of its long-term borrowings and 54% of total debt, through cross-currency swap (CCS) contracts, with the average interest rate estimated at around 7%. The proceeds from these USD-denominated loans are intended to finance the expansion of the raw water pipeline system and the prepayment for the acquisition of Biwase Long An.
- We see slight downside risk to our 2025 NPAT forecast due to lower-than-expected volume, pending a fuller review. We currently have a MARKET PERFORM rating for TDM with a target price of VND57,300/share.
TDM’s Q2 2025 results
VND bn (unless stated) | Q2 2024 | Q2 2025 | YoY % | 2024 | 2025 | YoY % | % of Vietcap’s 2025F |
Water sales volume (million cbm) | 20.2 | 18.4 | -8.9% | 35.5 | 34.0 | -4.0% | 46.5% |
Revenue | 187 | 100 | -47% | 293 | 200 | -32% | 47% |
COGS | (108) | (52) | -52% | (165) | (102) | -39% | 41% |
Depreciation expenses | (37) | (28) | -23% | (73) | (56) | -23% | 42% |
Gross profit | 79 | 48 | -40% | 128 | 98 | -23% | 56% |
SG&A expenses | (3) | (3) | 4% | (7) | (7) | 2% | 48% |
Operating profit | 76 | 45 | -41% | 121 | 91 | -25% | 57% |
Financial income | 2 | 26 | 1137% | 4 | 134 | 3192% | 103% |
Financial expenses | (21) | (15) | -29% | (26) | (21) | -19% | 40% |
Interest expenses | (2) | (6) | 213% | (6) | (8) | 32% | 39% |
Net other income/loss | 0 | 0 | N.M. | 0 | (0) | N.M. | N.M. |
Profit before tax | 58 | 56 | -3% | 100 | 204 | 105% | 85% |
Income tax expenses | (6) | (3) | -40% | (10) | (8) | -23% | 66% |
NPAT-MI | 52 | 53 | 1% | 89 | 196 | 120% | 86% |
NPAT from water generation | 52 | 29 | -44% | 89 | 66 | -26% | 62% |
Source: TDM, Vietcap
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