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HBC - BUY - Construction Comeback - Initiation

We are initiating coverage of Hoa Binh Corporation (HBC) with a BUY recommendation and target price of VND20,000. Although the construction industry is now suffering, sector revenues should still grow 13% in 2013. HBC is thus a good play on the sector’s recovery from the current slump. HBC’s finances will be shored up if a potential strategic partner buys 10-15m new shares as planned. Its valuations are attractive on a 2013 PER of 6.1x and we base our target price on a PER of 7.5x.