• KBC held its annual general meeting on June 19, 2024, mainly to seek approval for its 2024G profit guidance (remains unchanged from the plan approved by shareholders at the March 2024 EGM) and a private placement plan (expected to be executed in 2024-2025).
• Shareholders approved maintaining the 2024G guidance for total income (including revenue, financial income, and other income) of VND9tn (USD353mn; +48% YoY) and NPAT of VND4tn (USD157mn; +78% YoY), which is similar to the plan that shareholders approved at the March 2024 EGM. 
• Our 2024F NPAT forecast is equivalent to 48% of the approved 2024G guidance. The company does not disclose the breakdown for its 2024G guidance; however, we attribute the gap between our forecast and KBC’s guidance mainly to our lower IP land sales/handovers projection of 111 ha (compared to the guidance for 150 ha), and a potentially lower profit contribution from the residential segment vs the company’s expectations. 
• Shareholders approved the private placement plan to issue up to 250 million shares (33% of current O/S) to fewer than 100 investors. The issue price is proposed at (1) 80% of the average closing price over the 30 trading days as of the SSC approval date and (2) not lower than LQ BVPS at the time of execution. The private placement plan is expected to be executed in 2024-2025, with a specific date determined by the Board of Management after the SSC’s approval. The private placement shares will be restricted from trading for one year from the completion date of the private placement. KBC plans to use the expected proceeds for supplementing/expanding working capital, debt restructuring, investing in subsidiaries / joint ventures / affiliated companies, and conducting M&A activities. We have not yet factored this issuance plan into our forecast and valuation. 

Management anticipates a strong demand outlook for KBC’s upcoming projects. Currently, the Trang Due 3 IP (687 ha of total site area; Hai Phong) has completed its 1/2000 masterplan and is being submitted to the Ministry of Planning and Investment for appraisal before getting final approval by the PM. Meanwhile, the Trang Cat UA (total site area of 585 ha; Hai Phong) has completed its revised 1/500 masterplan and is awaiting the land use rights fee determination. Management anticipates strong potential demand from LG for the Trang Due 3 IP while expecting the Trang Cat UA to have high selling prices (>VND50mn/sqm) given other projects in the region are selling at more than VND100mn/sqm. In addition, management shared during the AGM that its potential IP land demand in 2024 could reach a total of ~197 ha, at the Trang Due 3, Nam Son Hap Linh, and Phu Binh IPs (not including Tan Phu Trung IP yet). 

Management views the private placement plan to increase charter capital as essential for ensuring the development of forthcoming pipeline projects. Management shared during the AGM that this private placement plan will enable KBC to bolster its capital reserves, meeting the capital needs for forthcoming projects, as well as for other financial endeavours such as M&A and investments in subsidiaries or joint ventures. Management stated that the demand from potential investors surpasses the anticipated share allocation for the private placement. Given that most provincial masterplans have recently been completed, management views an expected higher capital base as needed in order to take advantage of and secure new potential land bank for KBC.

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