- We raise our target price (TP) for VGC by 4.2% to VND66,800/share and reiterate our BUY rating. Our higher TP is mainly driven by (1) a 1% higher IP valuation (on inclusion of ~900 ha of new industrial parks (IPs) from Tay Pho Yen (Thai Nguyen) and Phu Ninh (Phu Tho) and accelerated land handovers, which outweigh projected lower average 2026-30F GPM), and (2) +3% construction materials valuation (rolling effect), (3) a lower net debt balance (VND1tn vs VND1.7tn previously), and (4) the positive impact of rolling our TP forward to mid-2027.
- We raise our aggregate 2026-30F NPAT-MI forecast by 9%, mainly driven by increasing our 11% IP-related aggregate gross profit (GP) projection (now contributing 61% of VGC’s total GP).
- We project 2026F NPAT-MI to grow 20% YoY, driven by (1) +24% YoY IP GP (land handovers +25% YoY) and (2) +32% YoY construction materials GP (on sales growth and GPM recovery).
- VGC’s valuation looks undemanding with a 2026F P/E of 12.3x, implying a PEG of 0.6 based on a 2026-30F NPAT-MI CAGR of 20%.
- Upside potential: Investment approvals of new IPs and urban areas (~1,000 ha).
- Downside risks: Lower-than-expected IP land handover area.
Powered by Froala Editor
