KDH_NEUTRAL_TP 39300_Update business outlook 2H2021_BSC Company Update

Valuation

Compared to the latest BUY recommendation report on 10/05/2021, Khang Dien's share price has recorded an impressive increase and is close to our target price

§  We make a Neutral recommendation for KDH stock with a target price of VND 39,300 based on RNAV method (-1.1% compared to the price on 31/08/2021) due to (1) New update of project portfolio; (2) Adjustment of project sale price assumption for potential land fund in Binh Tan, Phong Phu 2 area and (3) WACC = 11%.

Forecasting business results

§  BSC estimates that in 2021, KDH's revenue and profit after tax are estimated at VND4,631 billion (+0.3% YoY) and VND1,330 billion (+15.0% YoY), respectively. EPS FW 2020 = VND 2,163. PE FW 2021 = 15.8 times. The main source of revenue comes from the project (1) Safira, (2) Verosa Park, (3) Lovera Vista and (4) the Amerna Project.

Investment perspective

§  Owning a large-scale land fund in the inner city waiting to be "unlocked".

Risk

§  Plans to launch projects have been slowed due to legal issues and the Covid-19 outbreak.

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

Business results update

§  Business results in the first half of 2021 remains positive, close to our forecast. KDH revenue increased by 28% over the same period, reaching VND 1,969 billion (+28% YoY), PROFITST reached VND 473 billion, up 16% over the same period.

§  KDH completed 41% and 39.4% of the 2021 plan of revenue and after-tax profit, respectively.