We reiterate our MARKET PERFORM rating for NVL and maintain our target price of VND75,000/share as a lower net debt balance at end-Q2 2022 is offset by our 0.5-ppt higher risk-free rate assumption.

We forecast 2022F NPAT-MI of VND6.9tn (USD302mn; +115% YoY), which is mainly driven by our expectation for presold unit deliveries at the Aqua City and NovaWorld projects to accelerate in H2 2022F. We increase our 2022F NPAT-MI forecast by 24% mainly due to higher-than-expected H1 2022 financial income. We also note that revaluation gains upon the consolidation of investments (land banks/subsidiaries) and divestment gains in H1 2022 accounted for a total of ~25% of our 2022F PBT forecast.

NVL reported a total contracted value of ~USD2.4bn (+26.6% YoY) in H1 2022 mainly from the Aqua City, NovaWorld Phan Thiet and NovaWorld Ho Tram projects. We maintain our 2022F presales forecast at VND76.4tn (USD3.3bn; -10% vs 2021’s high base) even though H1 2022 presales achieved 74% of our 2022F forecast as we believe presales at hospitality projects could be slower in H2 2022 amid the Government’s stricter credit supervision on speculative and high-end property products.