- We raise our target price (TP) for KBC by 2.1% to VND24,000/share but downgrade our rating from BUY to OUTPERFORM as the company’s share price has surged 50% over the last three months.

- Our higher TP is mainly due to a higher valuation for the Quang Chau & Quang Chau expansion (QC) and Nam Son Hap Linh (NSHL) IPs as we expect better ASP and sales progress in 2023. However, this is partially offset by our delayed sales assumption in the Trang Cat UA to 2025F vs 2024F previously. 

- We forecast IP land sales recognition of 147 ha in 2023F (+682% YoY) vs previously 107 ha due to faster-than-expected sales at the QC and NSHL IPs. In addition to its current unbilled IP contract of 107 ha at end-2022, KBC has recently signed MOUs for another 50 ha in the NSHL IP, bringing its total contract value to an estimated VND4.8tn (USD203mn). Our IP land sales assumption is conservative compared to KBC’s guidance of 250 ha (+1229% YoY) in 2023.

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