- We lower our target price (TP) for HDG by 12.8%, driven by our (1) -13% power valuation (following our -16% projected aggregate 2026-30F NPAT & excluding a potential 200 MW project), and (2) a -22% real estate valuation (given slower assumed cash inflows from sales). These factors outweigh (3) the positive impacts of rolling our TP forward to mid-2027.
- We lower our aggregate 2026-30F NPAT-MI forecast by 16% (respective changes of -35%/-19%/-12%/-15%/-12% for 2026/27/28/29/30F), mainly due to (1) -16% energy aggregate NPAT-MI (due to a new wind capacity delay, our exclusion of a potential 200 MW project, higher provisions for Infra/Hong Phong 4), and (2) higher HoldCo expenses (due to a lower cash level following slower cash inflows from real estate sales).
- We forecast 2026F reported NPAT-MI to decline 20% YoY, driven by (1) -9% YoY core NPAT-MI (YoY lower hydropower earnings outweigh a real estate turnaround), and (2) Infra’s VND193bn provisions. These outweigh (3) no FX loss (vs VND93bn in 2025).
- We forecast 2027F NPAT-MI at +55% YoY, driven by 2x/+71% YoY real estate/energy NPAT.
- HDG’s valuation looks attractive with 2026/27F P/Es of 14.1/9.1x — 25%/51% below HDG’s 4Y average and 2026F P/B of 1.1x. This implies PEG of 0.3 based on a 2026-29F EPS CAGR of 42%.
- Upside catalyst: New residential project acquisition.
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