Analyst Pin-board LHG – Earning will go back to growth trajectory in 2H2022
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· In Q2 22, LHG recorded a plunge of 58% YoY in revenue to VND 233 billion (~ USD10 million). NPAT plummeted by 81% to VND 41 billion (USD ~1.9 million). The YoY decline was due to (1) high base of 2Q2021 as LHG recorded a historical high in earnings owing to leasing contract of 10 hectares with LOGOS, and (2) deteriorating GPM of the industrial land leasing segment to 18% in the last quarter. · In the long-term, we are confident that LHG will perform well as (1) the historical performance shows an absorption rate of above 10 hectares annually, the remaining leasable are in LH 3.1 ensuring enough inventory (~ 60 ha) for Long Hau until 2026, LH 3.2 (90 ha) and An Dinh (200 ha) will be commercialized in 2024, (3) the leasing price will keep going increase due to its prime location closed to key infrastructures. · In 2022, we estimate that the total revenue and net income will be VND 865 billion (or ~USD 37 million, +10.7%YoY) and VND 256 billion (or ~USD 11 million, -14% YoY) respectively. Correspondingly, the EPS will be VND 4,758. Based on the sum-of-the-parts valuation (SOTP), the target price is 56,300/share. Adding an annual cash dividend of VND 1,700 per share, the total expected return will be +60.2% (compared to the closing price of August 11th, 2021). |
Long Hau Corporation is a Vietnam-based company engaged in the real estate industry. It is involved in the development and construction of infrastructures for industrial zones and residential areas. The Company invests in the development of Long Hau Industrial Zone in Long An Province, as well as provides fresh water and waste water treatment services for plants inside Long Hau Industrial Zone. Other activities include the trading of construction materials, along with the offering of land clearing services, interior decorating services and real estate brokerage services. The Company has four affiliates.
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