Investment Recommendation

KDH_BUY_TP 42,100_Upside 16.0_New project implementation ensures growth potential _BSC_Vietnam company update

Date

10/05/2021
Language

Tiếng Việt
Number of Downloads

92

Detailed report

Valuation

We maintain our BUY recommendation for KDH stock and raise our target price to VND42,100 based on RNAV method (+16.1% compared to the price on May 7, 2021) due to (1) New update of the portfolio. project, (2) Adjustment of the assumption of project selling price for potential land funds in Binh Tan, Phong Phu 2 and (3) Adjustment of discount rate WACC = 11% for projects due by reduced interest rates.

Forecast of bussiness results

BSC estimates that in 2021, KDH's revenue and profit after tax are estimated at VND 4,438 billion (-3.9% YoY) and VND 1,329 billion (+15.0% YoY). 2021 FW EPS = 2,296 VND/share. 2021 FW PE = 15.8 times. The main revenue sources come from the project (1) Safira, (2) Verosa Park, (3) Lovera Vista and (4) Amerna Project.

Investment Thesis

Owning a large-scale land bank in the inner city waiting to be “unlocked”.

Risks

The plan to open and sell projects has been delayed due to legal issues and the Covid-19 epidemic.
General risks in the real estate industry (loan interest rates, industry cycles).

Company Update

Business results in 2020 are in line with our forecast, recording a growth of 26% YoY, respectively 125% and 97% of BSC's forecast of revenue and NPAT.
KDH sets a conservative 2021 business plan at 4% growth in NPAT of the parent company, announcing the addition of 3 new projects to its portfolio.
Q1 business results completed 17.4% and 17% of the revenue and profit target of 2021, the point of profit in Q2/2021.
New sales in the 2021-2022 period will be guaranteed thanks to new projects. BSC estimates that the total pre-sales value of KDH in 2021 and 2022 is estimated at VND 2,153 billion (-20% YoY) and VND 4,906 billion (+27.8% YoY), respectively).