LHG – Gloomy 2023 outlook
- LHG reported a 61% year-on-year increase in revenue to VND 103 billion in the fourth quarter of 2022, while NPAT reported a 20% year-on-year increase in revenue to VND 30 billion. The strong growth in business results was led by revenue from the IP land leasing segment compared to the low base (no revenue) in the fourth quarter of 2021.For the whole 2022, LHG earned VND 629 billion in revenue, a 20% decrease year on year, and met 80% of its revenue targets. NPAT totaled VND 202 billion, a 32% decrease year on year. The primary cause is the decline of the IP land leasing segment.
- In our base scenario for 2023, revenue is estimated at VND 815 billion (+11%) and NPAT will come at VND 341 billion (71%).
- We revise down our target price to VND 33,000/share due to (1) temporarily eliminating the last 20 hectares that had yet been cleared in Long Hau 3 phase 1; (2) temporarily eliminating An Dinh and LH 3.2 until the investment policies get approvals; and (3) factoring liquidity risk by taking a discount by 20% of NAV as LHG being limited trading time until 06/17/2023. Adding an annual cash dividend of VND 1,700 per share, the total expected return will be +58% (compared to the closing price of 02/08/2023).
Long Hau Corporation is a Vietnam-based company engaged in the real estate industry. It is involved in the development and construction of infrastructures for industrial zones and residential areas. The Company invests in the development of Long Hau Industrial Zone in Long An Province, as well as provides fresh water and waste water treatment services for plants inside Long Hau Industrial Zone. Other activities include the trading of construction materials, along with the offering of land clearing services, interior decorating services and real estate brokerage services. The Company has four affiliates.
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