- We cut our target price for HT1 by 17% to VND13,800/share but upgrade our rating to BUY from MARKET PERFORM as the company’s share price has dropped 42% over the last three months.

- Our lower target price is mainly due to 1) cutting our aggregate 2023-2027F NPAT-MI by 31% because we expect a period of weaker demand from private sector construction and HT1’s limited ability to raise its average selling price (ASP) to pass on higher input coal costs, and 2) raising our WACC assumptions due to our higher equity risk premium (ERP), higher beta and higher cost of debt assumptions. These factors are partially offset by 1) rolling over our target price horizon to end-2023 and 2) lower forecast maintenance and total capex expenses in 2022-2027F.

- HT1 reported weak 9M 2022 NPAT-MI of VND204bn (USD8.3mn; -36% YoY) despite revenue rising 31% YoY from last year’s low base, which was due to 1) margin compression as higher selling prices could not catch up with surging input coal prices and 2) high non-operating losses. 

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