We reiterate our BUY rating for VHM while maintaining our RNAV-based target price at VND107,000/share as a higher net cash balance as of end-Q2 2022 is offset by our 0.5-ppt higher risk-free rate assumption. We continue to believe the company is well positioned to ride Vietnam’s residential property growth story over the long run thanks to its market-leading position, large land bank and unique mixed-use developments.

VHM’s H1 2022 presales performance beat our expectation thanks to strong results from The Empire (~5,300 low-rise units launched for retail buyers at end-April 2022, of which 86% were presold as of end-Q2 2022 — equivalent to VND49tn/USD2.1bn). As such, we increase our 2022F presales value forecast (excluding construction services contract value) by 9% to VND90tn (USD3.9bn; +14% YoY), which is driven by our expectation for the ongoing presales of current mega projects and the new launch of The Crown (294 ha in Hung Yen).

We forecast 2022F NPAT-MI of VND32tn (USD1.4bn; -18% vs 2021’s high-base), which is mainly attributed by retail sales and bulk sales at Ocean Park, Smart City, Grand Park and The Empire. We decrease our 2022F NPAT-MI forecast by 7% as we delay our projected revenue recognition of The Crown and Wonder Park to start in 2023F vs end-2022F as previously.