X-Stock | IDC 47,800 +14.8%: Awaiting clearer signs of recovery

INVESTMENT THESIS

BSC initiates a WATCH recommendation on IDC with a target price of VND 47,800/share, implying an upside of 14.8% versus the price on June 11, 2026, based on the following views:

1. 2026 earnings are forecast to remain broadly flat YoY due to: (1) industrial park land handovers being expected to improve only slightly, supported by contracts signed earlier in 2025, while FDI investment demand in southern provinces remains slow; (2) the power segment being forecast to grow modestly by 6.5% YoY, as the El Nino effect is expected to strengthen in 2H2026; and (3) 2026 not being the key handover period for IDC’s real estate projects.

2. However, we also note that IDC has currently corrected by 17% from its peak and returned to a P/B of 2.0x, equivalent to -1 standard deviation from its five-year average of 2.8x. Therefore, we will consider revising our recommendation if land handovers or memorandum of understanding signings exceed expectations.

EARNINGS UPDATE

Q1/2026 results: Net revenue and NPAT-MI reached VND 1,486 billion (-17% YoY) and VND 271 billion (-21% YoY), respectively. The YoY decline in earnings was mainly due to:

• Industrial park revenue reached VND 269 billion (-42% YoY), as land handover volume declined compared with the same period last year, estimated at around 5–6 ha versus 11 ha in 2025, amid slow FDI investment and industrial land leasing activities in southern provinces.
• Real estate revenue reached VND 18 billion (-90% YoY), as projects such as Huu Thanh Residential and My Xuan B1 social housing have not yet been recognized.
• Interest expenses reached VND 59 billion (+63% YoY), as IDC increased short-term debt to conduct land clearance and infrastructure development for Tan Phuoc 1 Industrial Park and Vinh Quang Phase 1.

Other notable points: Gross margin of the industrial park segment increased by 8 ppts YoY. BSC believes this was driven by the recognition of Huu Thanh Industrial Park, which has a lower investment cost and higher land rental prices compared with Cau Nghin Industrial Park in the same period of 2025.