HND - Back in the race
The company’s performance during 9M2021 was relatively poor because of the boom in renewable energy and hydropower plants outperformance. However, this is considered to be a short-term difficulty. HND likely starts warming up in 4Q2021 and will be back in the race in 2022 thanks to the recovery of the thermal industry. Earnings in 2022 and 2023 are forecasted to be VND 832 bn (or USD 36 mn, +252% YoY) and VND 1,147 bn (USD 50 mn, +38% YoY), respectively. Furthermore, the company is going to become a cash cow as soon as it finishes paying its debt in 2024. We expect that the company will use its cash flow to pay dividends.
Using the EV/EBITDA, FCFF and P/E valuation methods, we determine the fair value of HND at VND 23,300 per share. Aside with an expected cash dividend of VND 400 per share in the next twelve months, the total expected return for investors is 27% compared to the closing price on Nov 19th, 2021. Hence, we recommend to BUY this stock.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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