KDH – Focusing on long-term strategy
- In 1Q23, KDH recorded revenue of VND 425bn (or USD 18.1mn, +198%YoY), due to the handover of high-value townhouse in the Classia project. The gross profit margin (GPM) increased to 78% owing to the contribution of high-end project (average value of ~VND20 bn/unit). Gross profit reached VND 332bn (or USD 14.1mn, +329%YoY, +11%QoQ). KDH’s NPAT was VND 201bn (or USD 8.55mn), down by 33% YoY due to lack of profit from re-valuated asset as it was in Q1 2022. The results met c. 18% of our full-year forecast.
- Keppel Corporation, together with Keppel Vietnam Fund (jointly, the Keppel Consortium), have entered into binding agreements to acquire from the company a 49% interest in two adjacent residential projects, with total land area of 11.8 ha in Binh Trung Dong for VND 3,180 bn (USD 187.1mn). We expect the divestment will bring KDH a large amount of cash flow to develop other projects.
- KDH will push the sale plan from 2H2023, in-line with market recovery expectation, with the Privia (a high-end condominium project in Binh Tan district) and the Clarita (villa project in Thu Duc city) are expected to open for sale in 2H2023.
- For 2023, we estimate that KDH’s total revenue will reach VND 2,650bn (or USD 112.77mn, -9%YoY), mainly coming from the handover of ~130 units of the Classia. KDH will also record growth in term of profit, with gross profit of VND1,765 billion (+21%YoY) and net profit of VND 1,104 billion (+2%YoY). The 2023 equivalent EPS is VND 1,540.
- Using SOTP (Sum-of-the-parts) method, we get a target price at VND 38,000/share (upside +27%), equivalent to a BUY recommendation for long-term investment purpose.
Khang Dien House Trading and Investment Joint Stock Company (KHADIHOUSE) is a Vietnam-based company engaged in real estate operations. The Company invests in the development, leasing and trading of houses, villas, apartment buildings and infrastructures for residential areas, as well as land, office buildings and commercial centers. It is also involved in the construction of civil and industrial structures, such as residential and nonresidential buildings, highways, streets and bridges. On May 5, 2014, the Company announced that it has divested all of its stake in Phuoc Long Real Estate Investment Trading Co Ltd.
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