DIG - Bide time
DIG’s projects typically cover a very large land area, mainly focusing on second grade cities close to major industrial parks, tourism destinations and ports such as Vung Tau, Dong Nai and Vinh Phuc. Since the State divestment at the end of 2017, the company has made some progress, in term of its development plans. Besides, DIG is also involved in land development, which is considered to be the main driver for the company in the near future.
Another spotlight is active divestment. During 2018, the company plans to divest two of its investments in Dai Phuoc area, which is expected to bring a total cash inflow of VND 600 billion.
On the other hand, low efficient ratio and not positive short term prospect. The company re-scheduled the sale plan of two main projects. Dai Phuoc residential area is postponed to 2019-2020 with the objective of taking advantage of better market conditions. Nam Vinh Yen phase 2 will take place in 2020 due to change in site planning. Long Tan is another key project and expected to be compensated at least 200 ha in 2018, creating some momentum for DIG from 2020 onward. Therefore, investors have to wait for some time to see returns until DIG monetizes its land bank.
We used the RNAV method to evaluate DIG’s stock and estimate the one-year fair value at VND 19,500/share. The total return should be 14% compared to the starting price in 24/08/2018. Therefore, we have an ACCUMULATE on the stock.
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