X-Stock | CTD VND96,500 +30%: Abundant Backlog

INVESTMENT VIEW UPDATE

Throughout our previous reports, BSC has maintained its view that:

Total backlog is expected to grow strongly in 2026, supported by: (i) the recovery of the real estate market; and (ii) CTD’s position as a large and reputable contractor, which should allow the company to benefit from the broader industry upcycle. Gross margin is expected to improve as the construction sector recovers. BSC expects the peak gross margin in the current cycle to reach 4.0%–4.3% (details are available in our previous report). Currently, CTD’s gross margin reached 4.5% in Q3 FY2026 and 4.1% in 9M FY2026.

In this report, BSC provides an additional update on valuation as follows:

Recently, CTD’s share price has recorded negative performance due to: (1) a sharp increase in raw material prices; and (2) information related to commercial business case No. 1422/2024/TLST-KDTM. BSC’s view is as follows:

1. Most of CTD’s backlog has been signed with major developers such as Vinhomes, MIK, and Masterise. BSC believes these developers still have sufficient capacity to absorb the recent increases in raw material costs and interest expenses. Therefore, while there may still be some impact on CTD’s contract execution progress and gross margin, the impact should be less severe than for other construction companies.

2. Regarding the legal case, based on BSC’s understanding, this matter relates to a dispute between RICONS and CTD. Currently, CTD has made a 100% provision for this payable. As a result, it does not affect our profit forecasts for the coming period.

BSC believes CTD’s valuation is currently attractive, with 2026 forward P/B at 0.86x and 2026 forward P/E at 11.8x; and 2027 forward P/B at 0.77x and 2027 forward P/E at 7.3x. Given the positive backlog outlook and improving gross margin, BSC maintains its BUY recommendation on CTD.