SZC [OUTPERFORM +17.5%] - Accelerated IP land sales to compensate for high leverage

- We maintain our OUTPERFORM rating for SZC and raise our target price (TP) by 1.7% to VND60,000/share.

- Our higher TP is mainly thanks to (1) our more positive forecasts for SZC’s IP land sales in 2022-2025F and (2) a higher target P/B of 2.7x vs previously 2.5x for SZC’s remaining residential land bank (apart from the Huu Phuoc residential project — see pages 6-7), which are partially offset by (3) our 0.5-ppt higher risk-free rate assumption.

- For 2022F, we forecast revenue of VND1.4tn (USD61mn; +90% YoY) and NPAT-MI of VND316bn (USD14mn; -2% YoY). The divergence between the top and bottom-line growth is mainly due to an expected GPM contraction of 28 ppts YoY following (1) SZC’s upward cost revision for IP land sales and (2) the new revenue contribution from the lower-margin Huu Phuoc residential project in the year.