- We cut our target price (TP) for HDG by 2.3% but maintain our OUTPERFORM rating.

- Our lower TP is mainly driven by (1) our lower valuations for three real estate projects, for which we delay revenue and profit recognition by one year, and (2) our lower valuation for the Dakmi 2 hydropower plant (147 MW) due to our higher assumed contracted volume ratio in 2024. This is based on the Ministry of Industry & Trade (MoIT)’s guidance (as per industry players) for hydropower’s contracted volume ratio of 98% in 2024 vs 90% in previous years. These factors outweigh the positive impact on our valuation of a net cash position at HDG’s parent company at end-Q4 2023 vs net debt at end-Q3 2023. 

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