KBC - Unlocking the Potential of Large-Scale Projects
We set a 12-month target price for KBC stock at VND 40,300 using a blended Price-to-Book (P/B) approach, suggesting P/B ratios of 1.5x for 2025 and 1.3x for 2026, which implies an expected return of 33%.Industrial Land Leasing – Growth Era Returns
We believe KBC’s competitive advantage in industrial park (IP) development will remain strong, driven by: 1/ Strategic project locations in Tier-1 markets – KBC's industrial parks are situated in high-demand areas with well-developed infrastructure, including Hai Phong and Bac Ninh in the North, as well as Ho Chi Minh City and Long An in the South. 2/ KBC's customers are large-scale FDI enterprises (LG and Foxconn), KBC has established a solid reputation among multinational corporations seeking industrial land in Vietnam. We expect the Northern market to continue leading growth, especially in low-occupancy industrial zones like NSHL, TD03, and the Hung Yen Industrial Cluster. Meanwhile, the Southern market starts to contribute significantly from 2026 onward as KBC ramps up land sales in Long An after focusing on land clearance in 2025.
Residential Real Estate – Unlocking Trang Cat's Potential
The Trang Cat Urban Area project (585ha, Hai Phong) is expected to finalize investment approval and pay land use fees by 2025. This will allow significant revenue contributions starting in 2026, estimated at VND 5,300 bn (USD 209mn), making up 40% of KBC’s total revenue.
High Capital Demand in Development
In 2025–2026, KBC will focus on the Trang Cat Urban Area project, paying land use fees and starting construction. Industrial park (IP) land reserves, especially in the South, will expand as the company clears land, meets financial obligations, and develops infrastructure. We estimate KBC will need about VND 15,000 bn (USD 591mn) in capital for its real estate projects. Along with financial leverage, a private share placement in 2025 will be a strategic funding source for the company.
Risks
The approval of several industrial parks in 2024–2025 has increased competition, resulting in slower occupancy rates.
Trang Cat Project is falling behind schedule projections.
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