X-Stock | HDG VND32,500 +38%: Q1/2026 Earnings and 2026 AGM Update

2026–2027 BUSINESS OUTLOOK

Commercial real estate segment remains the key growth driver

• The handover of around 15 units at the Charm Villas 3 project is expected to generate VND442bn in revenue and VND166bn in after-tax profit (contributing 21% to total after-tax profit in 2026).
• The Phan Dinh Giot project (covering 2.24 ha) and the Minh Long project (covering 2.7 ha) have been included in the pilot list under Resolution No. 171/2024/QH15 and have completed land-use fee payment obligations. In 2026, the company will continue to seek approval for investment policy, with construction expected to start in 2027. These projects are expected to serve as an important follow-on profit source from 2028 onward, helping extend the company’s growth cycle.

Energy segment: growth opportunities amid weather-cycle challenges

Supporting drivers:

• The Son Nham and Son Linh hydropower projects, with capacities(9 MW and 15 MW), respectively, are progressing in line with construction schedules and are expected to commence commercial operations from Q4/2026.
• The company has completed the acquisition of shares in the La Trong hydropower plant, with a capacity of 22 MW. The plant could begin operations by the end of Q2/2026 and is expected to add VND130bn in annual revenue to the group.
• The Hong Phong 4 solar power project is expected to stop provisioning VND100bn per year from 2027 after signing a new PPA with EVN, which is expected in Q3/2026. Although the new tariff is expected to be around 50% lower, resolving the legal bottleneck should provide a more stable and better cash flow compared with the current situation.
• The Phuoc Huu wind power project, with a capacity (50 MW), and the Binh Gia wind power project, with a capacity (80 MW), are expected to be awarded by the provincial authority through direct appointment. BSC expects the two projects to start construction in 2026 and commence operations by the end of 2027.

Key risks in the energy segment:

• According to NOAA, the probability of El Nino returning from April 2026 is increasing. This could cause hydropower output to decline by 14% compared with 2025, significantly affecting the group’s earnings.
• The company is reassessing the expansion of the 7A wind power project, with an additional capacity of 21 MW, due to the risk of affecting the wind efficiency of the existing 7A project, which has a capacity of 50 MW. We have not included this expansion project in our valuation model until there is more clarity on its impact and the official implementation decision.
• Provisioning risk: To prudently reflect legal risks related to solar power projects, BSC has added total provisions of VND218bn to its 2026 forecast, which we identify as the most conservative scenario.
•          Infra 1 project (VND193bn): Provision for payable expenses related to the electricity price difference in the absence of an official CCA.         
•          Hong Phong 4 project (VND25bn): Increase in provision from VND50bn to VND75bn due to the delayed approval of the official electricity tariff.

2026–2027 FORECASTS

2026: Revenue and NPAT-MI are forecast at VND2,965bn (+6% YoY) and VND792bn (+3% YoY), respectively, mainly driven by:

• Energy revenue is forecast at VND2,042bn (-10% YoY), affected by El Nino from April 2026, partly offset by:
• Commercial real estate revenue from the handover of 15 units at Charm Villas 3, recording VND431bn in revenue (+818% YoY).
• Financial expenses are expected to decline by -22% YoY, as the company incurred one-off expenses in 2025 related to the conversion of debt at the 7A wind power project from VND to USD.
• SG&A/revenue is forecast at 15.5%, 5.4 ppts higher than the same period last year, mainly due to a one-off provision expense of VND193bn at the Infra 1 project.

2027: Revenue and NPAT-MI are forecast at VND3,338bn (+13% YoY) and VND1,168bn (+47% YoY), respectively.

• Real estate revenue is forecast at VND770bn (+79% YoY), supported by the accelerated handover of around 27 units at the Charm Villas 3 project.
• SG&A/revenue is forecast at 5.9%, down 9.7 ppts. In 2027, we expect the Hong Phong 4 project to be able to reverse VND35bn per year over 10 years after the official electricity tariff is signed, with no additional one-off provision similar to the Infra 1 project.

 

Accordingly, we revise down our 2026/2027 NPAT-MI forecasts by 27% and 8%, respectively, versus our previous report, mainly due to the addition of a one-off provision of VND193bn at the Infra 1 project in 2026 and a delay in the 2026/2027 sales schedule at Charm Villas 3 from 23/35 units to 15/27 units, reflecting pressure from a high-interest-rate environment.

 

BSC RECOMMENDATION

Since the beginning of 2026, HDG’s share price has declined by 12% YTD. We maintain our BUY recommendation on HDG with a 2026 target price of VND32,500/share, implying an upside of 38% versus the price on May 26, 2026, based on the sum-of-the-parts valuation method. We forecast NPAT-MI in 2026 and 2027 at VND792bn (+3% YoY) and VND1,168bn (+47% YoY), respectively. HDG is trading at 2026/2027 forward P/E of 11.0x/7.5x, representing discounts of 16%/43% to its 2021–2025 average of 13.08x.