Analyst Pin-board HTN – Aggressive capital raising plan for sustaining its growth
- For 1H 2021, HTN recorded net revenue of VND 2,856 bn (or USD 125 mn, +67% YoY) and NPAT of more than VND 120 bn (or USD 5 mn, +4% YoY). The handover of Lavita Charm and Q7 Boulevard were the main contributors. The total backlog at end of 9M 2021 was VND 35,000 Bn (or USD 1.5 bn). In Q3, HTN signed a new contract with a value of VND 1,500 bn in the An Vien project (Nha Trang).
- Management plans to execute residential construction projects from other developers, helping HTN to reduce its concentration risk and exploit potential profits. The company also announced a capital raising plan from issuance of (1) 39.6 mn shares as 2020 stock dividend and (2) maximum of 25 mn private shares in 2022. After these transactions, HTN’s charter capital will be more than double from VND 495 Bn to VND 1,141 Bn. The aggressive capital raising plan would envision HTN to expand on potential business and improve operational capability.
- Projected 2021F/22F NPAT stays at VND225bn (-35% YoY)/ VND498bn (+122% YoY), equivalent to a 2021F/22F EPS of VND 4,370/VND 4,332. It is worth noting that we have factored the dilution effect from HTN aforementioned capital raising plan. We increase our TP to VND65,000 per share with ACCUMULATE recommendation, implying a 10% upside from the closing price of Oct 22nd by adjusting the target PE of 16.4x and PB of 2.4x. HTN has a strong advantage from HTLand large project value of VND 95,000 bn (or USD 4.2 bn) during 2022-2026 and better operational performance with outperformed gross margin versus local contractors.
Hung Thinh Incons JSC. Hung Thinh Incons JSC is a Vietnam-based company primarily engaged in the construction sector. The Company is involved in the construction of residential and commercial buildings.
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