Investment Thesis:
– VHM has largest land bank in Vietnam, which are in strategic locations.
– VHM is the most trusted housing brand and has widest profit margin among other developers.
– Many projects are already approved by authorities, and ready for development. This becomes main driver for growth and key point to compete with other competitors in next few years due to current slow license issuance in HCMC.
– Strong financial condition with strong brand name to raise capital in both Vietnam and other countries.
– The price of land across real estate market have been rising high, which also lift the value of VHM land bank.
Risk:
– License granting has been not yet improved this year;
– Cyclicity and credit tightening are burden on growth.
– impact of Covid-19 and new wave of outbreak in May 2021, the presale is continuing to be hit, then the delivery for 2021 could be lower than expected.
– the sale of current 3 mega projects could prolong to 2022 instead of 2021 as before planned.
– Other projects such as Wonder Park, Dream city and Long Beach Can Gio would be delayed if the demand does not recover.