Steel and retail businesses are leading contributors to the overall market growth of listed companies in the second quarter of 2024.
Estimates from VNDIRECT Securities Company show that the total net profit of listed companies on the three exchanges (HOSE, HNX, UPCOM) increased by 20.6% over the same period. The reason is thanks to a clearer economic recovery and low base effect from the second quarter of 2023.
The steel industry, with retail as the leading contributor to growth, recorded a 437% increase in profit thanks to an expanded EBITDA margin, as input prices fell more sharply than selling prices, and revenue in the second quarter of 2024 increased due to increased sales volume compared to last year's low.
Retail industry profits increased by 379% year-on-year in Q2/2024. Led by ICT retailer - Mobile World (code MWG) with net profit increasing sharply by 6,635% year-on-year, reaching VND1.17 trillion in Q2/2024. This positive result was recorded thanks to improved revenue per store, part of the effort to restructure the distribution system and close ineffective stores.
The industry, construction and materials and chemicals sectors recorded good growth, reaching 319%, 71.3% and 59.6% respectively. According to VNDIRECT, this growth was driven by increased domestic demand and exports as the global economy recovered.
Elsewhere, the real estate sector has shown signs of improvement. Profits are still down 16.9%, but the rate of decline has slowed compared to the same period last year, suggesting that the real estate sector is starting to recover.
In particular, analyst Nguyen Ngoc Hieu - VNDIRECT Securities Company - found that borrowing costs have bottomed out in the first quarter of 2024 and will increase slightly in the second quarter of 2024 when the economy recovers and credit demand increases. However, deposit interest rates will not increase too quickly but will remain at a moderate level so that businesses can adjust their business plans in accordance with borrowing conditions.
"Interest expenses increased to 6.0% in Q2/2024, up 0.4 percentage points from the previous quarter. The debt/equity ratio decreased to 70.2% in Q2, down 5 percentage points from the previous quarter, indicating that the period of low interest rates seems to have ended as the economy enters a recovery phase. However, if interest rates increase too quickly compared to the debt repayment capacity of businesses, this may force businesses to reduce their borrowing levels," said Mr. Hieu.
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