Khang Dien House Trading and Investment JSC – Outperform (KDH : HSX – Real Estate)

Khang Dien House Trading and Investment JSC – Outperform (KDH : HSX – Real Estate)

• Mixed FY2018 results with a slight decline in the top line, despite very strong growth in the bottom line thanks to a large profit contribution from land sales, as well as one-off gains from financial divestments.

• KDH was successful in launching one new product in November thanks to a general lack of new supply in the market, which will help to boost earnings in FY2020 and onwards.

• The debt burden is very low while their land bank is one of the largest amongst the majors.

• HSC forecasts FY2019 net sales growth of 2.7% y/y and NPATMI growth of 9.6% y/y, with a continuing large contribution from BCI’s land sales.

• We have our fair value price of VND 35,700 per share based on our RNAV calculation, equivalent to a FY2019 P/E of 17.6x.

• Reiterate Outperform.