Research Center

Khang Dien House Trading and Investment JSC’s (KDH) 1Q21 revenue reached VND836.5bn, +19.3% yoy. We estimate that around 20 units in the Verosa townhouse project and 300 units in Safira project were delivered in 1Q21. Gross margin (GM) in 1Q21 contracted by 5% pts yoy to 42.8%, due to the lower-margin contribution of Safira condo project. However, the financial expense dropped by 36.6% yoy as the lower Verosa units delivered in 1Q21 resulted in an immaterial payment discount expense.

The 1Q21 net profit skyrocketed by 11.1 times yoy to VND599bn on the back of a 260.2% yoy total revenue increase to VND2tn, and a 12.2% pts gross margin expansion to 56%. Around 64ha land area was transferred in 1Q21 vs 14.5ha in the 1Q20 which was heavily hit by the COVID fallout. We expect the NSHL will be the leading catalyst to drive the industrial land revenue in the second quarter.

TCB 1Q21 controlling-interest NP reached VND4,397bn, up 79% yoy and 11.2% qoq with upbeat sound across all business lines. NIM kept expanding to 5.9% thanks to high CASA ratio and low deposit rates while non-interest income stream is still growing. Given that, 2021F NP is upgraded by 30% to VND18.4tn. We raise TP to VND50,400 and reaffirm BUY.

Vinhomes reported an exciting 1Q21 revenue growth of 99.2% yoy to VND12.9tn mainly driven by the property revenue growth of 75.2% yoy to VND10tn, equivalent to 2,900 units handed in 1Q21. However, net profit growth was below at -21.2% yoy to VND5.4tn due to the absence of a VND8.3tn financial income from bulk sale transactions recorded in 1Q20.

The company sets moderate guidance of a VND1.2tn net profit, 4% yoy and VND4.8tn revenue, 6% yoy. The commence of delivery of Lovera Vista condo project (1,145 units) in tandem with the delivery of remaining Safira condo units drives the FY21F revenue growth. Per management, three projects could be launched to the housing market including 1) a 4.3ha townhouse project (158 units) in Dist 9, 2) a 5.7ha townhouse project in Dist 2 and 3) a 1.8ha condo project (1,100 units) in Binh Tan Dist

We remain conservative on this move as we observe that the hospitality market is slowing down and takes time to bounce back. Risks of high leverage and of potentially diluted shares from a US$600mn convertible bond result in us rate a Neutral on NVL.

The profit from financial activities was impressive with VND 63bn (+530 yoy), this is the highest quarterly figure recorded for 10-year period. The Board of Director proposed a conservative revenue target which is equal to 2020 actual revenue. But they aimed to improve the business efficiency when decreasing the claim amount and expense plus with strong financial income.

Despite the deep challenges facing aviation because of the pandemic, we believe aviation is an attractive long-term investment. The main reasons are 1) The world is getting steadily richer—about half the world is now middle class or richer so tourism demand continues to rise, 2) A tech revolution in the aviation industry make air travel safer before the pandemic and 3) Ancillary revenue has taken off, promote greater cash flow.

The company sets a target to post a VND1,152bn net profit, 37.9% yoy driven by a VND4.9tn revenue, 123.8% yoy. Per management, FY21F net profit also includes 1) a VND429bn goodwill income thanks to a further 30.1% stake acquisition to 65.1% of Waterfront (Izumi) project, and 2) a VND400bn financial income from a 50% stake transfer in Dai Phuoc project