Title NLG_Outperform_TP 46_400_Upside 5.9__Profit dropping point in Q3.2021_BSC_Vietnam company update
Report Type Phân tích công ty
Source BSC
Bussiness NLG
Detail Date : 05/08/2021
Total pages : 9
Language : English
File Type : .PDF
FileSize : 792 Kb
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Short Content

 

Valuation

Compared to the latest BUY report on May 21, 2021 (Link),  Nam Long's stock price recorded an impressive increase and approached our target price.

We issue an OUTPERFORM recommendation for NLG and raise our target price to VND46,400/share (+5.9% compared to the closing price on July 4, 2021 and 4.0% above the old target price). based on the RNAV method.

Forecast of business results

§  Based on a conservative view, BSC slightly revised down NLG's business result forecast in 2021 due to adjusting the accounting of part of Can Tho project's profit to 2022. Accordingly, revenue and profit recorded received a decrease of -16% and -9.7% respectively from the previous forecast

§  BSC forecasts that NLG's 2021 revenue and profit are estimated at VND 5,409 billion (+139.3% YoY) and VND 1,088 billion (+30% YoY) in NPATMI, respectively. EPS FW 2021 = VND 3,623. PE FW 2021 = 12.1 times.

Investment Thesis

§  Total selling value in the period 2021-2022 is expected to reach a record level of VND 22,150 billion, which will be a leverage for NLG to make a breakthrough in the future.

§  Owning a clean land bank with a large scale of 681 ha, ensuring a source of profit growth in the period of 2021-2025.

Risks

§  The plan to open and sell projects has been delayed due to legal issues and the Covid-19 epidemic

§  General risks in the real estate industry (loan interest rates, industry cycle)

Company Update

§  In 6M2021, NLG's revenue and profit after tax are VND 636.5 billion (-3% YoY) and VND 412.3 billion (+131% YoY) respectively

§  Total value of new sales (Pre-sales) in the first 6 months of 2021 was positive, reaching VND 4,491 billion with more than 1,070 products opened for sale.

Plan for private offering will be completed soon in the second half of 2021