NTC [NOT RATED] - Pure mid-cap IP player to enter expansion phase

Nam Tan Uyen IP JSC (UPCoM: NTC) is a ~33%-owned associate of Phuoc Hoa Rubber JSC (HOSE: PHR). PHR is under our coverage with a BUY rating and target price of VND86,400/share. NTC is a pure industrial real estate developer in Binh Duong Province
(~30 km northeast of HCMC) that currently operates two fully-occupied industrial parks totaling 607 ha and is developing a new phase of 346 ha in a prime location of the province.

We expect NTC’s new expansion project — the Nam Tan Uyen 2 Expansion (NTU3; 346 ha) — to obtain final approval in the near future. Moreover, NTC’s affiliates will enter their expansion phases, which we estimate will expand their total IP land site area by ~240% vs their total IP area of ~1,230 ha as of end-2021. We believe these expansion plans will secure NTC’s profit growth over the long term.

For 2022F, we forecast revenue of VND280bn (USD12mn; +3.2% YoY) and NPAT-MI of VND311bn (USD14mn; +5.6% YoY). The bottom line is expected to be mainly driven by our expectation for (1) NTU3 to start delivering its first land leasing area to tenants and (2) 14% YoY growth in financial income due to the company’s steadily improving financial position.