We cut our target price for HDG by 14% but maintain our BUY rating. Our lower target price is due to our 30% downward revision in the real estate segment’s valuation as we delay the sales launches of HDG’s real estate projects by six months to one year and have a lower valuation for the Charm Villas project. This implies that the real estate segment contributes only 30% to HDG’s valuation.
- We lower our 2023-2026F aggregate NPAT by 12% as we extend the handovers of Charm Villas Phase 3 over three years (2023-2025) due to the currently weak confidence of homebuyers. We also delay sales launches/handovers of two mid-end real estate projects in HCMC and two real estate projects in Hanoi as there was no significant improvement in legal procedures (see p. 10).
- We forecast 2023F NPAT-MI to decline 24% YoY with a lower NPAT contribution from the energy segment (-11% YoY), which outweighs higher profit from Charm Villas (+13% YoY) and higher NPAT from the hotel & office leasing segment.