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TDM - Strong Q4; 2024 NPAT-MI beats our forecast by 11% - Earnings Flash

Company Research

20 Jan 2025

  • TDM announced its Q4 2024 results with revenue of VND145bn (-25% YoY), reported NPAT-MI of VND58bn (+32% YoY), and NPAT from water generation of VND52bn (+19% YoY). The decline in revenue is mainly driven by the high base of revenue from material sales in Q4 2023. Strong reported NPAT growth is due to sales volume growth of 5% YoY and a 31% YoY decline in financial expenses (in which, interest expenses and provision expenses fell 61% YoY and 20% YoY, respectively).
  • In 2024, TDM recorded revenue of VND544bn (+2% YoY) and NPAT-MI of VND204bn (-28% YoY), which are equivalent to 96% and 111% of our respective forecasts and are consistent with the preliminary estimates released on January 8, 2025.  The decline in 2024 NPAT was due to (1) TDM receiving stock dividends from BWE this year instead of cash dividends in 2023 and (2) a VND25bn (+7% YoY) provision for losses at associated companies (Gia Tan Water and Biwase Quang Binh), which outweigh (3) VND20bn of dividend income from Dong Nai Water (DNW), Ca Mau Water (CMW), and (4) 5% volume growth.
  • We estimate that 2024 NPAT from water generation was VND181bn (+6% YoY), completing 112% of our forecast as the depreciation expenses were lower than expected.
  • TDM also finished the Di An raw water pipeline on December 6, 2024, with capex of VND184bn, which helps to increase sales volume in future years.
  • TDM spent VND250bn (8% of its asset) in 2024 to M&A a 24% stake in Can Tho Water and a 23% stake in Ca Mau water.
  • We see insignificant changes to our 2025 NPAT forecast, as the lower-than-expected depreciation expenses might offset higher-than-expected loan balance and financial expenses, pending a fuller review.
  • We currently have a BUY rating for TDM with a target price of VND58,800/share.

TDM’s 2024 results

VND bn

(unless stated)

Q4 2023

Q4 2024

YoY %

 2023

2024

YoY %

% of Vietcap’s 2024F

Water sales volume

(million cbm)

19.1

20.1

5%

68.4

70.8

4%

100%

Revenue

192 

145 

-25%

533 

544 

2%

96%

COGS

(122)

(63)

-48%

(292)

(287)

-2%

85%

Depreciation expenses

(39)

(37)

-7%

(149)

(146)

-2%

87%

Gross profit

70 

82 

17%

241 

258 

7%

114%

SG&A expenses

(4)

(4)

-1%

(14)

(14)

0%

91%

Operating profit

66 

78 

18%

227 

243 

7%

115%

Financial income

-44%

124 

27 

-78%

83%

Financial expenses

(26)

(18)

-31%

(48)

(45)

-7%

107%

Interest expenses

(5)

(2)

-61%

(20)

(9)

-53%

72%

Net other income/loss

(0)

NM

NM

NM

Profit before tax

48 

64 

34%

302 

225 

-25%

112%

Income tax expenses

(4)

(6)

47%

(19)

(21)

12%

117%

NPAT-MI

43 

58 

32%

283 

204 

-28%

111%

NPAT from water generation

43 

52 

19%

171 

181 

6%

112%

Source: TDM, Vietcap

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