1Q22 Earnings review – A robust start for FY22F

• As at 10 May 2022, 1089 listed companies on three bourses, representing 94.3% of market capitalisation, have released 1Q22 results.
• 1Q22 market aggregate earnings grew robustly 33.2% yoy, faster than that of 14.4% yoy growth seen in 4Q21.

Market earnings growth to accelerate in 1Q22
Based on our estimates, 1Q22 aggregate earnings of listed companies on three bourses (HOSE, HNX, UPCOM) increased 33.2% yoy, higher than that of 4Q21 14.4% yoy. However, market’s 1Q22 net profit grow slower than that in 1Q21 (+92.2% yoy) due to low base in 1Q20 (-25.9% yoy). Out of the 46 companies under our coverage that have reported their 1Q22 results, 58% were in line with our expectations while 28% beat our forecasts and 13% missed our estimates.
Banks, Chemicals and Food producers are earnings growth engines
Banks’ aggregate NP surged 31.7% yoy in 1Q22, much higher than that of 7.7% yoy in 4Q21, contributing 12.3% to market earnings. However, if exclude the one-off gain of VPB, banks’ NP grew 20.0% yoy. Chemicals, mostly contributed from DPM, DCM and DGC, posted impressive earnings growth with 304.1% yoy following the rising of fertilizers and phosphorus prices. Food producers’ 1Q22 NP growth accelerated 44.5% yoy, much higher than that of 13.8% yoy seen in 1Q21. Banks, Chemicals and Food producers, altogether, contributed 21.0% to 1Q22 market earnings growth. Notably, Telecommunications regained the positive net profit of VND1,821bn in 1Q22 versus loss in 1Q21, mostly thanks to VGI ‘s robust performance of VND1,189bn in 1Q22’s NP.
Utilities and electricity performance surprise us
1Q22 utilities earnings growth accelerated 52.0% yoy, much higher than that of 1.9% yoy in 1Q21, thanks to strong business result of GAS (+68.9% yoy). Electricity’s earnings bounced back 56.4% yoy in 1Q22 after a 35.8% yoy decline in 4Q21 thank to (1) power consumption recovery post Covid-19 and (2) additional wind power plant that began operations on November 21 began to generate profit. Construction & Materials earnings grew 33.1% yoy in 1Q22 following a widening gross margin to 17.3% from 15.5% in 1Q21 following the prices hike of building glasses, quartz and plastic pipes. Steels manufacturers ‘s earnings growth cooled down to 12.4% yoy in 1Q22, much lower than that in 4Q21 (+36.0% yoy) and 1Q21 (+281.8% yoy) following the rising coking coal prices and transportation cost.
Only Forestry and Property posted negative earnings growth
Forestry & Paper ‘s 1Q22 earnings fell 11.7% yoy due to input raw wood prices rose and high shipping costs. Property developers extended the downward trend with a 5.7% yoy slide in 1Q22 net profit, (-36.9% yoy in 4Q21) due to a fall back in sales volume of condo and landlord segment.

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