We reiterate our BUY rating for NLG but cut our target price by 34.5% to VND36,000/share mainly due to (1) lower valuations for the Izumi City, Southgate and Hai Phong projects, (2) our 1.9-ppt higher WACC assumption and (3) applying a 15% discount to our estimated RNAV (see page 9).

We forecast 2022F NPAT-MI of VND455bn (USD18.4mn; -57.5% YoY) mainly from deliveries at Southgate, Mizuki Park Phase 2 (P2), Akari City P1 and Can Tho. This is 60% lower than our previous forecast due to higher assumed SG&A expenses, the delay of Paragon stake sales recognition to 2023F vs previously 2022F and our concerns for prolonged legal approval procedures.

For 2023F, we forecast NPAT-MI to surge 98.5% YoY to VND904bn (USD36.4mn), which is driven by deliveries at Southgate, Mizuki Park P2 and Can Tho, as well as the Paragon stake sales. We expect the Paragon transaction to contribute ~30% of our 2023F PBT forecast.