Outlook & Our view
- In 2017, the Company established targets of VND 821 billion in revenue (+6.3% YoY) and VND 433 billion in PAT which is 19.7x times higher than that of FY2016, with the V5-V6 project (Van Phu Victoria) being a major factor towards this turnaround. The project delivered a much higher gross margin from acquiring the land at a very advantageous cost. By now, the firm’s management revealed that VPI will well fulfil the target set in 2017, smashing earlier expectations.
- As for 2018, VPI aims to achieve VND 1.9 trillion in revenue (+135% YoY) and VND 652 billion in PAT (+50.6% YoY), with the landed properties of Grandeur Palace Giang Vo and 83 Hao Nam An Hung project to be key revenue drivers. While the target looks ambitious, the Company’s management is rather confident in their ability to fulfill the plan.
- Along with development of residential projects which is a key earnings pillar for VPI, execution of BT projects is also a priority, as to further accumulate its land bank. Accordingly, VPI is undertaking a number of BT projects including BT Saigon (19% stake), BT Lien Mac (40% stake), BT Ha Dong (50% stake) and BT Road No.70 (20% stake).
- In general, VPI operates among well-known developers in Hanoi, with a proven track record in residential development and execution of BT projects, possessing extensive experience. With such a foundation and expertise, we think that VPI will further sustain its growth and capture the growth wave of the real estate market, efforts of which will materialize into profits in the upcoming periods.
At the current price of VND 36,100/share. Presently wide assumptions for VPI to achieve its 2017 profit target. VPI is currently trading at a P/E of 8.3x and a P/B of 2.9x.
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