- We upgrade our rating for KBC to BUY from OUTPERFORM despite cutting our target price (TP) by 45% to VND23,500/share. KBC’s share price has plunged 52% over the last three months.

- Our TP cut is mainly due to (1) our 3.7-ppt higher WACC, (2) our assumed postponement of the Trang Cat UA’s bulk sales in 2023F and (3) removing the Trang Due 3 IP from our valuation and TP, which are partially offset by the positive effect from rolling our TP horizon to end-2023. Our valuation now only incorporates IP & UA projects that have obtained investment approval. 

- Due to our delayed bulk sales recognition for the Trang Cat UA to 2024F vs previously 2023F and the removal of our forecast for the Trang Due 3 IP, we cut our 2023F NPAT-MI by 74% and 2024F NPAT-MI by 22%. We also cut our 2022F NPAT-MI by 27% due to our lower forecast for IP land sales in the year as we have observed slower-than-expected negotiations between KBC and tenants amid the current global economic slowdown.

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