2Q22 Earnings review – Earnings growth takes a breather
Strategy Note 08/08/2022 92
- As at 05 Aug 2022, 1,045 listed companies on three bourses, representing 93.7% of market capitalisation, have released 2Q22 results.
- 2Q22 market aggregate earnings grew modestly 13.5% yoy, slower than that of 36.7% yoy growth seen in 1Q22.
Market earnings growth slowdown in 2Q22
Based on our estimates, 2Q22 aggregate earnings of listed companies on three bourses (HOSE, HNX, UPCOM) grew modestly13.5% yoy, slower than that of 1Q22 (+36.7% yoy) and 2Q21 (+72.8% yoy). For 1H22, market earnings grew 24.2% yoy; tracking inline with our forecast of 23% yoy for FY22F. Out of the 58 companies under our coverage that have reported their 1H22 results, 48.3% were in line with our expectations while 15.5% beat our forecasts and 36.2% missed our estimates.
Banks, O&G and Chemical are top market earnings growth drivers in 2Q22
Banks’ earnings rose of 39.8% yoy in 2Q22, higher than 1Q22 (+31.7% yoy) and 2Q21 (+34.3% yoy). We observed that provision expenses tend to subdued 17% yoy in 2Q22 while average NPL ratio increased 13pbs yoy to 1.56% in 2Q22. Oil & Gas posted the most impressive earnings growth with 172.6% yoy, following the oil prices spike, mostly driven by BSR (+488 % yoy). Chemicals sector’s net profit elevated 139% yoy, lower than that of 193% yoy in 1Q22 as fertilizers and phosphorus prices have peak out. Together, Banks, Oil & Gas, and Chemicals contributed 21.1% to market’s 2Q22 NP growth. Notably, Travel & Leisure narrowed their loss to VND2,212bn (60% vs 1Q22), thanks to a boom in domestic travel and the resume of international flights.
Industrial transportation and Utilities 2Q22 performance surprised us
Utilities accelerated with +88.7% yoy in 2Q22, even stronger than the previous two quarters, mainly driven by GAS (+124.9% yoy). Industrial transportation (ports and logistic) delivered 116.6% yoy in 2Q22, much higher than that of 33.1% yoy in 1Q22, mainly driven by ACV (+666.8% yoy) and MVN (+192.6% yoy).
Steels, Brokerage and Property posted negative 2Q22 earnings growth
Following the gross margin compression, steel manufacturers reported a sharp drop 67.0% yoy in 2Q22’s earnings growth, dragging market’s earning growth by 8.6%. Property developers experienced a negative earnings growth of 35.8% for the third quarter in a row. However, if excluded VHM, property develop would grow positive 52.7% yoy in 2Q22. Earnings of Securities firms declined deeply 93.5% yoy in 2Q22, following the contraction in both indexes and market liquidity.
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