- We maintain our BUY rating for LHG and raise our target price by 5% to VND37,900/share.

- Our higher target price is mainly due to (1) lowering our valuation discount from 30% to 25% as the stock’s trading restriction was lifted in April 2023, in addition to (2) rolling our valuation horizon forward from end-2023 to end-2024.

- We anticipate that LHG will experience a substantial increase in profit recognition over the medium term, which is mainly driven by (1) the end-Q2 2023 backlog of ~7 ha that has not yet been signed as sales contracts, which we attribute to pending Government rental fee payments as LHG is awaiting the land rental fee determination for the next 5.75 ha of total site area at the Long Hau 3.1 (LH3.1) project (Phase 7), and (2) the remaining leasable IP land bank of ~44 ha (including ~7 ha from the backlog and excluding 9 ha that has been reserved for ready-built factory (RBF) development).

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