LHG – Positive outlook from Long Hau industrial park 03 (Phase 01)
• In 1H2024, LHG recorded revenue of VND 238 bn (USD 9.5mn, +31% YoY), mainly from land leasing at Long Hau Industrial Park 3 - phase 01 (LH3 IP), and from ready-built factory leasing (RBF). Gross profit reached VND 134 bn (USD 5.4mn, +45% YoY), and gross profit margin improved to 56%, as the margin of the industrial park leasing segment rose to 64%. NPAT reached VND 97 billion (USD 4mn, +33% YoY), equivalent to 74% of the business plan.• For 2H2024, we expect revenue to reach VND 262 billion (USD 10.5mn, +24% YoY), driven by: 1/ VND 108 billion (USD 4.3mn, +40% YoY) from the delivery of approximately 2 ha at LH3 IP, and 2/ VND 104 billion (USD 4.2mn, +28% YoY) from RBF leasing. With stable industrial park rental prices in 2H2024, gross profit is expected to reach VND 135 billion (USD 5.4mn, +24% YoY), with a gross margin of 52%. As a result, NPAT for 2H2024 and 2024 is estimated at VND 96 billion (USD 3.8mn, +5% YoY, due to high deposit interest income in 2H2023) and VND 193 billion (USD 7.7mn, +16% YoY), respectively. The corresponding EPS for 2024 to be VND 3,850.
• Using the sum-of-the-parts method, we set a target price for LHG shares at VND 59,000 per share (with an upside potential of +59% compared to the closing price on September 17, 2024), equivalent to a BUY recommendation for long-term investment.
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