- We maintain our BUY rating for GDT despite cutting our target price (TP) by 18%. Our lower TP is because we decrease our aggregate 2022F-2024F NPAT by 16% and increase our cost of equity by 1 ppt, which are partly offset by rolling our TP horizon from mid-2023 to end-2023.

- Weakening demand from developed economies and destocking efforts from customers lead us to cut our 2022F and aggregate 2023F-2024F revenue by 22% and 10%, respectively. We expect less destocking activity and a weakened VND to bolster a recovery for GDT and Vietnamese wooden product exports in 2023.

- GDT’s medium-term outlook is based on (1) Vietnam’s low labor costs that capitalize on trends of global supply chain diversification away from China, (2) GDT’s small product business that enjoys mild competition as a niche market, and (3) ESG compliance that bolsters customer acquisition — especially in its secondary markets such as the US and the EU. 

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