- We reiterate our BUY rating for VHM but cut our target price from our RNAV valuation approach by 1.1% to VND79,500/share. Our lower target price is mainly due to (1) a higher net debt balance at end-Q1 2023 and (2) our more conservative projection for new office projects. 

- We forecast 2023F NPAT-MI of VND30.7tn (USD1.3bn; +6% YoY), which is primarily driven by scheduled deliveries at Vinhomes Ocean Park 2 & 3 and bulk sales. This is 7% lower than our previous forecast mainly due to a higher proportion of Ocean Park 2 deliveries under business cooperation contracts (BCC) — which have lower margins vs retail/bulk sales — and is partially offset by higher financial income thanks to bulk sales recognitions in Q1 2023. 

- We cut our 2024F NPAT-MI forecast by 5% because we lower our gross margin assumption mainly due to Ocean Park 2 & 3 deliveries under BCC and as we increase our financial expenses forecast by 7% in accordance with the bond issuance plan that was approved at the 2023 AGM.

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