We reiterate our BUY rating for NLG but decrease our target price by 0.8% to VND35,700/share mainly due to a lower valuation for Izumi City as we downgrade the presales for this project in 2023, which is offset by a lower net debt position as of end-2022.

We forecast 2023F NPAT-MI of VND691bn (USD29.3mn; +24% YoY), which is mainly driven by deliveries at Mizuki Park Phase 2 (P2) and Southgate, as well as the 25% Paragon stake sales. This is 24% lower than our previous forecast due to our assumptions of higher SG&A expenses and a lower gain from stake sales, which outweigh our assumption for accelerated project handovers at Mizuki Park.

We expect NLG to continue sales of existing projects Mizuki Park P2 & 3, Akari City P2, Southgate, Izumi City and Can Tho in 2023. We forecast Mizuki Park and Akari City — both mid-end condo projects in HCMC — to contribute 53% of NLG’s 2023F presales of VND6.4tn (USD271mn; -22% YoY). We decrease our 2023F presales by 6% as we lower our projected presales of the Izumi City and Can Tho projects due to expected prolonged legal approvals. We forecast NLG’s aggregate 2023-2025F presales at VND21.1tn (USD894mn), which will be driven by five key projects.