KDH [BUY +25.2%] - High margin projects to drive profit growth - Update

We maintain our BUY rating for KDH but trim our target price by 4% to VND48,000/share, which is lower than our previous target price of VND50,000/share (adjusted for a 10% stock dividend in July) mainly due to a higher net-debt balance as of end-Q2 2022 and our 0.5-ppt higher risk-free rate assumption.

We reiterate our 2022F NPAT-MI forecast of VND1.4tn (USD61mn; +17% YoY) as we continue to expect the Classia project (construction started at end-September 2021; early sales of ~40 units in Q2 2022) will largely drive H2 2022 profit.

We continue to expect strong presales in 2022-2023F — mainly driven by new small-scale projects Classia, The Privia and Clarita — vs a low base in 2020-2021 as we expect the company will accelerate sales/launches of new projects starting in H2 2022. We forecast 2022-2023F aggregate residential presales of VND9.3tn (USD404mn).