Update IDC – BUY

IDICO posted a decline in 4Q2024 result with revenue of VND1,955 bn (-13% YoY) and PBT of VND540 bn (-29% YoY) which were in line with our forecast. The decline was mainly due to lower industrial park (IP) land area delivered of 10.8ha, of which 6ha at Huu Thanh IP, 1ha at Cau Nghin IP and 3.8ha at My Xuan B1 IP. 

IDC posted strong growth in 2024 with revenue of VND8,846 bn (+22% YoY) and PBT of VND2,993 bn (+46% YoY), completing 120% of profit target and 100% of our forecast. Strong growth mainly came from the IP segment.

IP segment: IP revenue in 2024 was recorded at nearly VND4 trn (+21% YoY) from 98 ha delivered (-8% YoY) from Huu Thanh IP (41ha), Phu My 2 (22ha), Cau Nghin (14ha), Que Vo 2 (13ha), My Xuan B1 (4ha) and Phu My 2 expansion (1ha). Segmented gross margin increased from 52.3% to 60.9% thanks to higher average leasing rate of USD135/sqm (+4.7% YoY). Land leasing activity in 4Q2024 has improved compared to 3Q2024 with over 31ha (+43% QoQ and -35% YoY), however land area leased for 2024 was still far below 2023 with over 96 ha leased (-43% YoY) mainly because some tenants, especially Korean and Japanese investors delay their investment decision to wait for the US election and FED’s decisions on interest rate in 2024. We expect leased area to improve to 124 ha (+29% YoY) in 2025.

In January, 2025, IDICO Vinh Quang – a 99.9% subsidiary of IDC – was approved to develop Phase 1 of Vinh Quang IP in Hai Phong with a total area of 226 ha, net leasable area (NLA) of 162 ha and total investment of VND3.55 trn. Adding this project increased the total remaining NLA by 13.6% to 1,092 ha. 

Residential property segment: In 2024, revenue jumped by 5 times YoY, to VND532 bn mainly thanks to the transfer of 1.45 ha land lot to Aeon with revenue of VND268 bn and recognition of 90% of Phase 1 and 2 of Bac Chau Giang project.

Power segment: Power revenue increased by 15% YoY, to VND3,373 bn in 2024 mainly thanks to a 15% growth in volume distributed in IPs, to 1,592 mn kwh. Segmented gross margin dropped from 12.2% to 9.4% due to lower contribution from two hydropower plants Dak Mi 3 and Shrok Phu Mieng which were affected by lower volume sold to EVN.

We adjust 2025 PBT down by 16% to VND2.3 trn (-23% YoY) given steady growth of the power segment but a decline in the IP segment given lower land area delivered. YE2025 target price was adjusted down by 3% to VND65,400/share mainly due to a delay in Tan Phuoc 1 IP. Reiterate our Buy rating for IDC.