NTC - Flourishing rental activity and attractive cash dividend
Having the two existing industrial parks being fully occupied, NTC is preparing to exploit Nam Tan Uyen 3 IP with 255 ha of commercial area. Despite the project is still waiting for final approval, we are optimistic about its absorption due to a 40% pre-sold rate. Nam Tan Uyen 3 Industrial Park will be the growth driver in the next five years when coming into operation. Unceasingly large FDI inflows and the relocation of factories across the regions have been creating a solid lease demand in Binh Duong. In addition, operating industrial parks on rubber land helps lower costs than others. Healthy financials with the abundant cash and low debt ratio comfort a consecutive cash dividend at an average of 38% charter capital.
However, we believe there is a risk of dilution when the company has to raise its charter capital to meet the minimum level for Nam Tan Uyen 3. The raising procedure has not been announced. On the other hand, we are concerned that the cross-ownership structure between Vietnam Rubber Group (Upcom: VRG), Phuoc Hoa Rubber (PHR) and NTC may affect the timeliness of the projects. Although we are optimistic about the potential and the attractive valuation at VND 85,300 per share (31% higher than the closing price on August 6th, 2018), we do not have a recommendation on NTC at this time.
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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