NLG – The ability to complete the 2022 plan depends on many variables

• During the meeting of Nam Long Day, NLG set a plan to record positive revenue (VND3,327-4,441 bn). NPATMI (VND786-1086 bn) and pre-sales value in 4Q2022 (VND2,383 bn). However, we believe that the plan will not be able to achieve the target because the Can Tho project is in progress at the stage of waiting for land allocation approval , it is necessary to continue to fulfill financial obligations and build basic infrastructure in order to be eligible for the official sale. While Paragon Dai Phuoc Project is in the adjustment phase 1/500 to add documents to adjust the enterprise registration certificate (ERC). However, in the context that the Land Law has not been agreed, and many inspection activities are taking place in Dong Nai province, we believe that the project transfer can be extended to 2023.
  On this basis, we forecast revenue and NPATMI in 4Q2022 at VND1,693 bn (-62% yoy) and VND126 bn (-65% yoy). Equivalent to the estimated revenue and net income of parent shareholders for the whole year of 2022 at VND4,403 bn  (-15% yoy) and VND245 bn (-77% yoy), EPS is estimated at VND 640 per share.

• In 2023, the BOD set an initial pre-sales target of over VND12,000 bn, which will be a big challenge as most of the new subdivisions opened for sale next year will focus on suburban areas and invest in the context of high interest rates.
• According to the construction progress, 2023 will be the drop-off point for the handover of projects. We estimate revenue and NPATMI at VND6,951 bn (+58% YoY) and VND1,013 bn (+314% YoY), respectively. In which, profit is mainly contributed from (1) VND350 bn from divestment of Paragon Dai Phuoc project and (2) handover of Mizuki-CC3, Southgate, Izumi-1A and land plots of Can Tho project.
• We maintain our HOLD recommendation for NLG stock with a target price of over 12 months, with a target price of VND 27,000/share, 11% lower than the closing price of December 17, 2022.