LHG - Long Hau 3 IP ensures the income for the next three years
We have a positive view on the demand for renting IP land and warehouse in the future. Long Hau's advantage is that their IPs are located in Long An province, very close to Ho Chi Minh city, which helps the demand and the leasing price. Currently, Long Hau 3 - Phase 1 IP has 35 hectares available to lease, this will ensure the income of the next three – four years. The short-term growth driver comes from the increase in IP leasing price and the expansion of the warehouse segment. The ability to complete legal procedures and put other IP projects into operation are the driving force for long-term growth.
Using the RNAV method, we have a target price of VND 42,400/share for LHG, equivalent to a FY2021 forward P/E of 9.7x. We recommend to BUY LHG shares with a current total return of 23%.
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.
Viet Dragon Securities belongs to top 20 biggest securities companies in terms of chartered capital in Vietnam. With a qualified, dedicated and professional team, a widespread network, advanced technology, diversified products and services, and good relationship with local and foreign institutions, we provide a wide range of services and products to our clients both individuals and institutions, both local and foreign. We commit to provide our clients with promising investment opportunities and a comprehensive and professional financial investment services.
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