We reiterate our BUY rating for VHM but cut our target price by 33% to VND56,400/share. We believe VHM is well-positioned for growth in Vietnam’s residential property sector over the long run with its leading market position, large land bank, and proven track record in large-scale project development. Valuations are attractive for 2023/24F P/B at 1.0x/0.9x, respectively.
- Our lower target price is mainly due to raising our discount for estimated RNAV from 10% to 30% to more reflect prevailing stock market sentiment on VHM as we observe that VHM’s share price (despite its strong fundamental performance) has been increasingly correlated with that of VIC/VinFast.
- We increase our 2023F NPAT-MI by 24% to VND37.0tn (USD1.5bn; +28% YoY) as the 9M 2023 result beat our previous full-year forecast, driven by deliveries at Ocean Park 3 in Q3 2023. We expect the ongoing deliveries at Ocean Park 2 & 3 to support Q4 2023F earnings.