- We lower our target price (TP) for HDG by 2.2%, driven by our (1) -4% power valuation (following our -2% projected aggregate 2026-30F hydropower NPAT-MI) and (2) -3% real estate valuation (due to our -63% projected 2026F handover). These factors outweigh (3) a 13% higher net cash balance of VND1.1tn.
- We lower our aggregate 2026-30F NPAT-MI forecast by 2% (respective changes of -34%/-4%/+8%/+21%/-4% for 2026/27/28/29/30F), mainly due to 2% lower aggregate hydropower NPAT-MI (due to international forecasters’ consensus change from La Nina/Neutral to El Nino conditions from August 2026F). This outweighs +1% aggregate real estate NPAT due to weaker-than-expected 2025 Charm Villas handovers, delaying recognition toward 2026-29F.
- We forecast 2026F NPAT-MI to rise 22% YoY, driven by (1) Charm Villas’ VND217bn NPAT (vs VND8bn loss from real estate in 2025), and (2) +58% YoY office hotel NPAT (no LUR in 2026 vs 2025), which outweigh (3) -8% YoY energy NPAT due to YoY weaker hydropower volume.
- HDG’s valuation looks attractive with a 2026F P/E of 12.7x—31% below HDG’s 4Y average; and implying PEG of 0.5 based on a 2026-28F EPS CAGR of 26%.
- Upside catalysts: VND600bn provision reversal from Hong Phong 4 solar farm (HP4) to boost 2026/27 NPAT; new residential project acquisition.
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