- We reiterate our BUY rating for NLG while lowering our target price (TP) by 20% to VND36,800/share.
- Our lower TP is mainly due to (1) higher assumed construction costs, (2) a 21% reduction in our aggregate 2026–2028F presales forecasts, (3) a 1.0 ppt increase in our WACC assumption, and (4) a change in valuation methodology from 100% RNAV to a 50:50 blend of RNAV and target P/B.
- We forecast 2026F NPAT-MI of VND697bn (USD26mn; -1% YoY), with property earnings recognition to accelerate in Q4 2026F, driven by the commencement of handovers at new phases of Izumi City, Mizuki Park, and Sol Garden, alongside ongoing handovers at Southgate and Can Tho. We project 2026F core NPAT-MI (excluding one-off gains from the 2025 Izumi City stake sale and the Q1 2026 education land plot transfer) to surge 122% YoY.
- We lower our 2026/27/28F NPAT-MI forecasts 2%/7%/25%, respectively, mainly reflecting lower gross margin assumptions due to higher construction costs and lower 2028F handover estimates following our reduced 2026–2027F presales projections.
- We forecast 2026F presales at VND11.7tn (USD444mn; -2% YoY), with H2 2026F presales expected to improve 29% vs H1 2026, but 22% lower YoY. We expect more active launches toward end-2026F including new-phase launches at Mizuki Park, Southgate, and Izumi City. We lower our 2026/27/28F presales forecasts 19%/23%/21%, respectively.
- NLG is currently trading at 0.9x/0.9x its 2026/27F P/Bs, well below its 5Y average of 1.5x.
- Downside risks to our positive view: Slower-than-expected presales progress at key projects; prolonged weak homebuyer confidence.
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