Company Quarterly Earnings Update – NLG VN – Q3 2022

Summary of the Q3/2022 results of Nam Long Investment (NLG VN)

9M/2022 Result & Outlook

  • NLG has four projects currently running in the selling stage. In 9M/2022, there were about 2,000 units presold with a value of VND9,900bn, higher than the total presale of VND5,900bn for the whole 2021. Accumulatively, NLG has a total of about VND13,600bn of unbilled revenue, most of which will be booked in 2022 and 2023.
  • Sales from the project development business reached VND2,545bn in 9M/2022, representing the biggest contribution to total sales of VND2,710bn which jumped by 244.1% y/y. Conversely, net profit amounted to VND119bn, down 83.2% y/y as there was financial income from revaluated asset value when a greater stake was acquired in a project last year. By the end of 9M/2022, total debt amounted to VND4,560bn, while cash and cash equivalents reached VND4,179bn, thus net debt was almost nil.
  • Real estate companies are facing difficulties in acquiring financing either through bank loans or the corporate bond market. Meanwhile, selling progress in existing real estate projects is becoming harder amid tightening mortgages and a rising interest rate environment. This will potentially increase pressure on real estate prices and affect the selling progress of real estate companies. As for NLG, it focuses on livable housing products with reasonable prices with none of its projects having their prices adjusted down so far. However, the company is slowing down offering new products to the market to maintain a high absorption rate of its current projects.
  • Can Tho 2, a land lot project, may not launch this year due to delays in receiving a license. The delay will accordingly affect the company’s profit this year. We adjust our forecasted 2022F net profit down by 30.6% to VND788bn (-26.4% y/y), while we adjust up 2023F net profit by 9.7% to VND1,665bn (+111.2% y/y). From 2024 to 2026, NLG should be able to book an average net profit of VND2,200bn per annum.


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