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IDC – Speed up

• IDC reported that revenue increased 11% year on year to VND 1,208 billion in Q4 2022, and NPAT increased to VND 202 billion compared to VND 1 billion in 4Q2022. The growth was thanks to the low base of the fourth quarter of 2021. IDC's revenue for 2022 was VND 8,242 billion, a 92% increase year on year. NPAT increased by 826% year on year to VND 2,286 billion. The growth was led by the energy segemnt and IP leasing activities.
• For 2023, we estimate that the revenue and NPAT will reach VND 7,387 billion (-10%YoY) and VND 1,888 billion (-17% YoY) respectively. The results are expected to be lower than 2022, owing to the fact that IDC may no longer record one-time revenue from leasing as they did in 2022. Except for this surge, revenue and NPAT in the main business segments are expected to grow by ~20.3% and ~12.9%, respectively, in 2023.
• In short-term, IDC could record one – off revenue as IDC complete transfers 21,870 m2 of Urban projects in Ward 6, Tan An, Long An to Aeon mall, the deal is expected to earn approximately VND 400 billion in NPAT after all procedures are completed in 2023. However, the unearned revenued adjusted P/B of IDC is 1.7, which is higher than peers’s P/B average of 1.26. We believe that expected earnings from the deal has been price in the current market value.
• We maintain a positive long-term outlook for IDICO (HNX: IDC) due to (1) its large available leasable land bank (751 ha), which will ensure IDC performance for at least five years, (2) new projects of the energy segment will lift up earnings, (3) the asset turnover has improved significantly since 2020 as IDC accelerated leasing activities. For 2023, we estimate that the revenue and NPAT will reach VND 7,387 billion (-10%YoY) and VND 1,888 billion (-17% YoY) respectively. Besides, IDC plans to pay a cash dividend in next 12 months at no less than VND 4,000/ shares, equivalent to a dividend yield of ~9.5% compared to the closing price of 21/02/2023.