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KDH [BUY +57.1%] - New low-rise projects to support profits; attractive valuation - Update

- We maintain our BUY rating for KDH but cut our target price by 31% to VND33,000/share, mainly due to: 1) a lower valuation for the Phong Phu 2 project, 2) our 0.9-ppt higher WACC and 3) applying a 15% discount to our estimated RNAV (details on page 9).

- We forecast 2022F NPAT-MI of VND1.2tn (USD48.6mn; flat YoY) as we continue to expect the Classia project (57% sold and 47% delivered, based on total units, as of end-Q3 2022) to drive profits in Q4 2022. We lower our 2022F forecast by 15%, mainly because we delay the sales and recognition of the remaining units at Lovera Vista (construction completed; 88% sold and delivered as of end-Q3 2022) to 2023F vs 2022F previously.  

- For 2023F, we forecast NPAT-MI of VND1.2tn (USD48.7mn; flat vs 2022F) mainly driven by sales of two new small-scale low-rise projects — Clarita and The Solina — as well as the remaining units at Classia. Per management, the company has finished land compensation for Clarita (Binh Trung Dong Ward, Thu Duc City, HCMC; total of ~160 low-rise units) and The Solina Phase 1 (Binh Chanh District, HCMC; ~500 low-rise units planned for Phase 1).

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