X-Alpha | VHM VND178,200 +14%: The Architect Behind Iconic Developments

VALUATION VIEW

BSC downgrades its recommendation from BUY to HOLD despite raising the target price sharply by 35% to VND178,200/share, implying an upside of 14%, as VHM has delivered strong outperformance of 51% over the past three months and 25.2% YTD, compared with the VN-Index’s 8.0% YTD gain. Two key factors affecting our valuation include: (1) VHM’s 35% effective interest in the Global Sportia project, also known as the Olympic Sports Urban Area, under the RNAV method; and (2) three other major projects in Khanh Hoa with a total area of 12,734 ha, valued using the comparable valuation method. VHM is currently trading at a 2026F P/B of 2.2x, compared with the sector average of 1.3x. We believe VHM deserves its current valuation as the company enters a strong earnings growth cycle, with a projected CAGR of 23% during 2025–2028 from a high base, while its project development scale is expected to expand from 1,000–2,000 ha during 2023–2025 to 5,000–10,000 ha during 2026–2028.

EARNINGS FORECAST

Compared with our previous report, we revise up our earnings forecasts for the coming years, as VHM’s project implementation progress has been better than expected, particularly the potential for bulk sales at new projects such as the International University Urban Area and Global Gate Ha Long. Specifically:

• 2026: BSC raises its earnings forecast by 48% to VND59,824bn (+46% YoY), mainly driven by higher handover volume at Ocean Park 2 & 3 and our expectation that the International University Urban Area project will record bulk sales during the year.
• 2027–2028: Net profit is forecast to reach VND65,311bn and VND71,819bn, respectively, corresponding to growth of 9% YoY and 10% YoY, supported by multiple mega-projects entering their major handover phases, including Vinhomes Green Paradise, Global Gate Ha Long, and Global Sportia.

For new contracted sales over the next three years, BSC expects Vinhomes Green Paradise to be the main contributor in 2026, while Global Gate Ha Long and Global Sportia are expected to start contributing from 2027. We forecast new contracted sales of VND260,726bn (+27% YoY) in 2026, and VND432,100bn (+66% YoY) / VND461,718bn (+7% YoY) in 2027/2028.

INVESTMENT THESIS

1. Impressive growth outlook, with a projected net profit CAGR of 20% and new contracted sales CAGR of 31% during 2025–2028 from a high 2025 base.
2. The project pipeline is geared toward nationally iconic developments, with project sizes reaching 5,000–10,000 ha, equivalent to the area of a city, combined with key connectivity infrastructure. These developments are expected to help attract tourism and investment while supporting population redistribution.