KDH released Q1 2023 financial statements that were in line with the preliminary figures announced at the company’s AGM on April 26. Q1 2023 results included net revenue of VND425bn (USD18mn; +198% YoY) and NPAT-MI of VND200bn (USD8.5mn; -33% YoY), which fulfilled 17% and 24% of our respective full-year forecasts. The YoY increase in revenue was mainly due to handovers at Classia. However, NPAT-MI declined as earnings were no longer supported by non-cash gains from land plot consolidation as in Q1 2022. 

Presales were relatively upbeat as the company sold ~50 units at Classia (which has total 176 low-rise units) since the beginning of 2023, bringing the current absorption rate to ~85% of total units. Furthermore, KDH plans to launch presales at The Privia in Binh Tan District, HCMC (1,043 condos) in Q3 2023 and expects strong demand for the project. KDH has completed construction for four out of 23 floors at the Privia.

Nevertheless, we foresee downside risk to our 2023F NPAT-MI forecast of VND847bn (USD36mn; -23% YoY) as we believe handovers at Clarita (159 low-rise units) could be pushed back to H1 2024 from Q4 2023 as the company is still finishing the project’s detailed design before starting construction. However, the downside risk is partially offset by a higher-than-expected GPM at Classia as its GPM in Q1 2023 was 17 ppts higher than our full-year forecast. Neverthless, management remains confident in its guidance 2023 NPAT of VND1tn (USD43mn) that was announced at the recent AGM.

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