We attended IDC’s February 2 analyst meeting and our key takeaways are below:  

* IP land sales: In 2023, IDC achieved IP land sales of 170 ha in signed contracts and MoUs (exceeding our forecast of 138 ha and vs IDC’s 2023G guidance of 128 ha). Among the 170 ha IP land sales, Huu Thanh, Phu My 2, Que Vo 2, Cau Nghin, Phu My 2 Expansion, and My Xuan A IPs are 62 ha, 54 ha, 19 ha, 18 ha, 14 ha, and 3 ha, respectively. Major FDI tenants that signed MOUs/contracts with IDC in 2023 included Hyosung and PepsiCo.  

* IP land handovers: IDC handed over 106 ha in 2023, among which is (1) 73 ha from new IP land sales made in 2022 and 2023 and (2) 33 ha from a retroactive revenue recognition of IP land sales in Que Vo 2 IP. As such, we estimate the unbilled backlog at end-2023 amounted to ~156 ha (over 30 ha from 2022 MOUs and 126 ha from 2023 contracts/MOUs).  

* Selling prices: The average asking prices in end-2023 at Huu Thanh, Que Vo 2, and Cau Nghin IPs have increased by 6%, 3%, and 18% YoY, to over USD148/sqm, USD119/sqm, and USD77/sqm, respectively. Meanwhile, Phu My 2 and Phu My 2 expansion IPs’ asking prices have remained broadly the same at over USD124/sqm and USD126/sqm, respectively.  

* New IP project acquisitions:  IDC plans to expand its land bank total site area by 2,430 to 2,820 ha over the next five years. Among that, the company is awaiting final investment approval for the Tan Phuoc 1 IP (470 ha, Tien Giang) and expects to receive investment approval in early 2024 – in line with our expectation. At this meeting, the company also stated that the Vinh Quang IP (Hai Phong) completed 1/2000 masterplan and is expected to receive investment approval by 2025. We have not yet factored the Vinh Quang IP project into our valuation.  

* Overall, IDC’s IP land sales and handovers in 2023 were ahead of our expectations. We anticipate potential upside to our 2024F NPAT-MI forecast (pending a fuller review) as the unbilled backlog at end-2023 (~156 ha) was higher than our previous projection of 98 ha. The guidance for 2024 earnings and IP land sales has not yet been disclosed. Please also refer to our January 31 Earnings Flash for IDC’s 2023 results.