Company Quarterly Earnings Update – TDH VN – 2018 Q3

Summary of the 9M 2018 results of Thu Duc Housing Dev. (TDH VN) 

9M/2018 results: highlights
  • As expected, 2018 is a lackluster year as major projects are in the selling progress and can only generate profits from 2019 onwards. TDH’s net profit reached VND 82.6bn in 9M/2018, mainly thanks to a one-off gain of VND 47bn from selling its 51% stake in the Thu Duc Agricultural Market and thanks to a gain of VND 53bn from the revaluation of its investment in Fideco (FDC).
  • At the end of 9M/2018, the company´s financial position was strong with cash amounting to VND 101 bn (2.3% of total assets) and with a low financial leverage, resulting in a D/A of 0.20x and a D/E of 0.35x.
  • Two out of four major TDH projects have been launched for sale and have achieved good results so far. The company’s largest apartment project will start selling in December of this year, while one land lot project will open sales in Q1/2019.
Outlook
  • In 9M/2018, the number of apartment transactions in Ho Chi Minh city fell by a whopping 35.3% yoy, while transactions in Hanoi city were down by 12.9% yoy, according to CBRE Vietnam. Judged by the overall sentiment, the real estate market may continue to tend weaker for still some time. However, TDH’s products appear to be less affected by the general market’s sluggishness thanks to their good location, competitive prices and as the company should benefit from the strong housing demand in the mid-end and affordable price segment.
  • As for 2019, we project net profit to increase by 39% yoy to VND 125bn as a part of the TDH-Riverview project, of the Citrine project, and of the Long Hoi 2 project will generate profit. As for 2020, the company’s bottom line is likely to increase by a further 27% yoy to VND 158bn, mainly thanks to the contribution from the Centum Wealth project.
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