DPR – Passing through the bottleneck
- Decision No. 227/QD-TTg of 2024 removes the bottleneck of industrial land quota in Binh Phuoc until 2025, thereby paving the way for the expansion of the North Dong Phu IP and the South Dong Phu IP to expedite progress.
- The provincial master plan of Binh Phuoc has been approved, and the draft master plan of Binh Duong province shows clearer prospects for land conversion and opens up many opportunities to materialize projects in the future. The estimated total area of convertible land reserves for site clearance and resettlement until 2030 is up to 1,743 ha.
- Under the base scenario, we forecast DPR's revenue and net profit for 2024 to reach VND 1,126 million (UDS 45 mn;+11% YoY) and VND 260 bn (USD 10 mn +26% YoY) respectively. Based on the assumption that DPR may receive compensation from the Tien Hung 2 project and the average rubber selling price throughout the year reaches VND 41 million/ton. Corresponding EPS reaches VND 2,988.
- Based on the sum-of-the-parts (SOTP) method, the target price is adjusted upwards by VND 51,100/share as legal bottlenecks regarding land targets have been removed, and the provincial master plan confirms the feasibility of the land conversion story. Therefore, we reassess the benefits of the two expanded industrial park projects, along with additional income from site clearance and resettlement compensation, reflecting this benefit in this update. Coupled with a cash dividend of VND 1,500/share over the next 12 months, the expected total return is 0% (based on the closing price on March 21, 2024), equivalent to a BUY recommendation for long-term investment purposes
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