Valuation
§ BSC recommends BUY AGG with target price of VND 62,100/share (+32% compared to the closing price on 17/05/2021 based on RNAV method:
§ Adding BD27 and BD45 projects to the project valuation list based on the feasibility of project implementation.
§ The real estate market recovers and the legal process in Ho Chi Minh City will begin to open from 2022.
§ Provide project WACC discount at 11%
Forecast of business results
§ In 2021, BSC estimates that parent company's revenue and profit after tax will reach VND 3,813 billion (+117% YoY) and VND 519 billion (+25% YoY), respectively, thanks to the handover of projects (1) The Sóng, (2) River Panaroma, (3) Sky89. EPS 2021 FW =5,974 VND/share. PE 2021 FW = 7.9 times.
Investment Thesis
§ Capital scale is low, but possesses an attractive project portfolio, the project scale in the period 2021-2026 is 8 times higher than in the previous period.
§ Ho Chi Minh City's "legal" bottleneck is cleared and the trend of shifting land bank to satellite cities will be the foundation for AGG's valuation growth.
§ 2021-2022: Profit falling point thanks to the handover of a series of projects.
§ Profitability of AGG is among the top enterprises in the real estate industry
Catalyst
§ Issued to existing shareholders in Q3-Q4/2021.
Risks
§ The plan to open and sell projects has been delayed due to legal issues and the Covid-19 epidemic.
|