DPG_OUTPERFORM_TP44500_Upside 13_Positive Business Plan_BSC Company Update

Valuation

§  Based on a cautious view, we make a positive recommendation for DPG shares and set a target price of VND44,500 per share (+13% compared to the closing price of June 9, 2021) based on the SOTP method.

Forecasting business results

§  DPG's ability to complete its profit plan will depend on the real estate segment. In 2021, BSC estimated that the revenue and profit after tax of the parent company is estimated at VND2,658 billion (+25% YoY) and VND264 billion (+35% YoY), respectively thanks to (1) Hydropower segment restoration and (2) Completion of Casamia project. PE Fwd 2021 = 9.1 times, PB Fwd 2021 = 1.7 times.

Risk

§  Hydroelectric Cycle Risks

§  General risks of the real estate industry (lending interest rate, industry cycle calculation)

Business update

§ Ambitious 2021 business plan. The AGM approved an ambitious 2021 plan with revenue growth and profit after tax of the parent company reaching VND2,756 billion (+30% YoY) and VND283.4 billion (+45% YoY), respectively.

§ Business results in Q1/2021 recorded positive growth thanks to (1) Hydropower and (2) Real Estate. Revenue and profit after tax of the parent company Q1/2021 reached VND 458.8 billion (-3.1% YoY) and VND97.4 billion (+244% YoY), respectively. Gross margin improved sharply from 27.8% Q1/2020 to 52.9% Q1/2021.