X-Stock | NLG 36,700 +39%: Q1/2026 Earnings Update

EARNINGS UPDATE

Q1 2026 results: Net revenue and NPAT were broadly flat YoY versus Q1 2025, reaching 1,279 billion VND (-0.9% YoY) and RESEARCH 110 billion VND (-0.3% YoY), respectively. Earnings were mainly driven by handovers of low-rise products at Southgate and Can Tho Central Lake. However, NPAT-MI declined 37% YoY to 68 billion VND, as the contribution from Can Tho Central Lake, which is 100%-owned by NLG, was lower in Q1 2026 than in Q1 2025. Overall, NLG’s results remained broadly in line with our expectations, with net profit expected to stay flat in 2026 before rising sharply to a new level in 2027–2028, driven by handovers from a series of key projects such as Elyse Island, Izumi and new phases of Southgate.

Sales update: New presales during the period reached 2,073 billion VND (+280% YoY), completing 8.8% of the company’s full year presales target. Key contributions came from Izumi (29%), Southgate (18%) and Mizuki (30%). In April 2026, NLG launched sales of low-rise products at Sol Garden in VSIP Hai Phong, recording new presales of 1,215 billion VND. Q1 2026 new presales completed 13.7% of our forecast, as Q1 is typically not a peak sales quarter and the real estate market remained affected by negative sentiment amid a high-interest-rate environment and ample supply.

Other updates:

• Funding needs: NLG currently has no need to raise capital via bonds or equity issuance. The company is only drawing down existing credit facilities signed with banks for construction purposes.

• Sales policy: NLG continues to maintain interest-rate support policies for homebuyers. Buyers are only required to pay an interest rate of 9%; however, this is not significantly different from current bank offers, which range around 9.0%–9.5%, and even 8.5% in some cases.

• Customers are currently opting for standard payment schedules instead of taking out loans, while waiting for interest rates to potentially adjust in Q3 2026.

• Waterpoint Phase 2 is expected to incur additional land-use fees due to adjustments to the 1/500 master plan. Legal procedures are expected to be completed in Q3 2026. The company has already fulfilled its financial obligations under the previous master plan; therefore, any additional costs are expected to be limited. NLG continues to seek partnerships with potential partners for this project.

VALUATION AND RECOMMENDATION

Compared with our latest update report, we maintain our BUY recommendation and earnings forecasts for NLG, with a target price of 36,700 VND/share, implying 39% upside. Since our latest recommendation, NLG’s share price has moved broadly sideways, while the VNIndex has increased by 17.4%. The stock’s performance has been in line with the broader real estate sector, reflecting the absence of supportive catalysts and selling pressure from foreign investors.

We observe early signs of a potential turnaround in the real estate sector, as key constraints weighing on market sentiment are gradually easing: (1) interest rates remain a policy priority and are being kept under control, and (2) homebuyer demand and absorption capacity remain resilient, supported by demand-stimulating payment policies. Please refer to our Real Estate Sector Report for further details.

NLG is currently trading near its historical valuation trough, with a 2026F P/B of 0.96x, close to the -2 standard deviation level of 0.93x. We believe this is an attractive valuation for a company that: (1) recorded its highest-ever new presales in 2025; (2) is expected to maintain growth momentum with an 11.6% CAGR in new presales and a 47% CAGR in net profit during 2026–2028; (3) has a healthy financial position, shifting from a net debt position to a net cash position by end-2025; and (4) owns a diversified project portfolio across segments, giving the company flexibility to select suitable launches based on actual market conditions.