- We maintain our BUY rating for PHR despite cutting our target price (TP) by 28% to VND59,300/share. Our RNAV-based IP valuation incorporates IP projects that have already obtained investment approval from the Government (VSIP III, Nam Tan Uyen 2 Expansion and Tan Lap I) and the Tan Binh Expansion IP that is close to PHR’s existing Tan Binh IP; we believe it is less challenging to obtain investment approval for expansion IP projects vs a new IP.

- Our lower TP is mainly due to (1) our 2.9-ppt higher WACC and (2) removing our valuation for the Hoi Nghia IP (total site area of 715 ha converted from PHR’s rubber land) as we are more conservative given the uncertainty in obtaining investment approval, which is partially offset by the positive effect of rolling our TP horizon to end-2023.

- For 2022F, we maintain our revenue forecast at VND1.8tn (USD73mn; -7.2% YoY) but edge up our NPAT-MI forecast 0.7% to VND994bn (USD40mn; +108% YoY) due to our higher forecast for IP revenue, which is partially offset by our lower forecast for the rubber segment. Our 2022F bottom-line forecast is driven by our compensation income forecast of VND691bn (USD30mn).

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