- We downgrade our rating for DXG to MARKET PERFORM from OUTPERFORM but raise our target price by 2% to VND13,300/share. DXG’s share price has risen 29% over the past three months. 

- Our higher target price is mainly because (1) we factor the Park View project into our valuation as its cost started to be reflected in DXG’s inventory in Q1 2023 (per DXG) and (2) we roll forward our TP horizon to mid-2024 from end-2023. These positive impacts are partially offset by a lower valuation for the brokerage segment (see details in our DXS Update Report, dated May 19, 2023) and a higher net debt balance as of end-Q1 2023. 

- We cut our 2023F and 2024F NPAT-MI forecasts by 60% and 42% to VND263bn (USD11mn; +23% YoY) and VND349bn (USD15mn; +33% YoY), respectively, as we lower our expectation for handovers at Gem Sky World (GSW) as well as our brokerage services forecasts. For 2025F, we lower our NPAT-MI forecast by 35% to VND469bn (USD20mn; +34% YoY) mainly because we expect deliveries at Gem Riverside to start in 2026F vs 2025F as previously. 

- At DXG’s May 2023 AGM, shareholders approved plans for (1) a rights issuance of 101.7 million shares (~16.7% of total current O/S) at an expected issuance price of VND12,000/share, which will mainly pay tax and debt expenses for Ha An (DXG’s 100%-owned subsidiary and the developer of GSW), and (2) a private placement of 57 million shares at VND15,000/share (9.3% of total current O/S) to raise its ownership at DXS. We have not yet factored these plans into our valuation and forecasts. 

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