LHG - Positive long-term outlook will overshadow the current results.
- Long Hau Joint Stock Company (HSX: LHG) has just announced its 2Q2023 financial report, showing that business results declined compared to the same period last year. Accordingly, net revenue in Q2 only reached VND 67 billion (USD 2.82 million), down 71% YoY. NPAT also decreased by 40% to VND 24 billion (USD 1.01 million). In the first half of 2023, LHG recorded net revenue of VND 182 billion (USD 7.67 million), down 48% YoY. NPAT reached VND 75 billion (USD 3.16 million), down 16% YoY.
- 2023 revenue will reach VND 722 billion (USD 30.4 mn, +15%YoY), NPAT grow by 48% YoY to VND 302 billion (USD 12.7 mn) thanks to the low base of 2022.
- We maintain a positive long-term outlook for LHG as the value of the current leasable area in Long Hau 3.1 (LH 3.1) is revised thanks to the robust growth of rental price. 21,343 m2 of new RBFs space was put into operation creating a new source of income for LHG. The investment policy approvals for An Dinh and Long Hau 3.2 (LH3.2) are expected to be received in 2H2023/1H2024 opening more room to grow.
- We upgrade the target price to VND 50,000/share as we (1) eliminate liquidity discount, (2) adjust the leasing price at LH 3.1 to USD $260/sqm for the remaining leasable area, (3) value the additional RBFs asset. Adding a cash dividend of VND 1,900 per share in the next 12 months, the total expected return will be +85.3% (compared to the closing price of 08/10/2023).
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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