KDH – Sales strategy to precede a recovery
- In 3Q23, KDH recorded revenue of VND 616bn (USD 25.5mn, +6%QoQ, -23%YoY), due to the handover of high-value townhouse at the Classia project (~20 units as estimated, the parent company's profit after tax (NPAT-MI) reached VND 208bn (USD 8.6mn,-41% YoY, the company did not record profit from buying additional shares in the subsidiary as in 3Q/2022). For 9 months in 2023, the NPATMI reached VND 655bn (USD 27mn, -33% YoY), equivalent to ~66% of the company's business plan.
- For the full-year 2023, we adjusted KDH's total revenue to VND 2,234bn (USD 91.9mn, -23%YoY), mainly from the handover of ~110 Classia units. NPAT-MI reached VND 920bn (USD 37.9 mn,-17%YoY, ~92% of the company's business plan). As a result, we expect that in 4Q2023, revenue and NPATMI will reach VND 610bn (USD25.1 mn,-51%YoY) and VND 265bn (USD 10.9mn, +123%YoY), respectively. 2023EPS could reach VND 1,150.
- According to the sales plan, the company will be prudent in 2024 operating each project in turn so that the market can absorb the sold units, with: 1/ Privia a condominium project in Binh Tan district is expected to open for sale ~700 units in November 2023, and completely selling the remaining units in 1H24; 2/ The Clarita project, with ~160 low-rise products, is expected to be able to sell in 2H24.
- Using the SOTP (Sum-of-the-parts) method, we maintain the target price at VND 36,200 per share (Upside +13% from the closing price on November 21, 2023), which is equivalent to an ACCUMULATE recommendation for long-term investment purpose
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