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IDC Update – BUY
08/11/2024 - 10:49:10 SAIDICO CORPORATION – JSC (IDC VN)
Business result in 3Q2024 was higher than our expectation, thus we adjust 2024 revenue up by 10% and PBT up by 6%. Our YE2025 target price slightly increased by 2% to VND67,700/share mainly thanks to a decline of over VND1 trn in net debt. Change rating from Outperform to Buy as target price increased and market price declined by 3% since our update report in 8/2024.
IDICO posted positive 3Q2024 result with revenue of VND2,276 bn (+58% YoY) and PBT of VND717 bn (+180% YoY) which were higher than our expectation. In 9M2024, IDC recorded revenue of VND6,891 bn (+38% YoY) and PBT of VND2,453 bn (+89% YoY), completing 98% of profit target and 87% of our forecast. Strong growth mainly came from Industrial park (IP) segment.
IP segment: For 9M2024, IP revenue was recorded at VND3,362 bn (+51% YoY) mainly generated from 88 ha delivered. Segmented gross margin in 9M0224 increased from 50.9% to 60.3% thanks to higher leasing rates. IDC leased 21.8 ha in 3Q2024 (+27% QoQ and -52% YoY) and 65.1 ha in 9M2024 (-47% YoY), completing 45% of the leasing area target and 60% of our forecast. As delivered area in 3Q2024 was higher than our expectation, we adjust delivered area up by 18% to 124 ha and 2024 IP revenue up by 20% to VND4,108 bn.
In September, 2024, IDICO-CONAC – a 51% subsidiary of IDC – was approved to develop My Xuan B1 expansion IP in Ba Ria – Vung Tau province with a total area of 110 ha, net leasable area (NLA) of 83.4 ha and total investment of nearly VND2 trn. Adding this project increased the total remaining NLA by 6% QoQ to 961 ha in 3Q2024.
Residential property segment: In 9M2024, revenue jumped by 7 times YoY, to VND490 bn mainly thanks to the transfer of 1.45 ha land lot to Aeon with revenue of VND268 bn and land lots in Bac Chau Giang project. We expect the transfer of the remaining land lot of 7,300 sqm to Aeon with a value of VND170 bn will be realized in 2025 instead of 2024, thus we adjust estimated 2024 residential property revenue down by 22% to VND585bn.
Power segment: Power revenue increased by 14% YoY, to VND2,361 bn in 9M2024 mainly thanks to a 20% growth in volume distributed in IPs, to 1,158 mn kwh. Segmented gross margin dropped from 10.7% to 7% due to lower contribution from two hydropower plants Dak Mi 3 and Shrok Phu Mieng which were affected by drought and water shortage. We adjust 2024 power revenue up by 9% to VND3,400 bn as we adjust volume distributed in IPs up by 6% and average electricity price distributed in IPs up by 3.5%.
Overall, as the 3Q2024 result was higher than our expectation, we adjust 2024 revenue up by 10% to VND9,026 bn (+25% YoY) and PBT up by 6% to VND2,990 bn (+45% YoY). We expect a slight decline in 2025 with revenue of VND8,586 bn (-5% YoY) and PBT of VND2,746 bn (-8% YoY) given steady growth of the power segment but a decline in the IP segment given lower area delivered. Our YE2025 target price increased slightly by 2% to VND67,700/share mainly thanks to a decline of over VND1 trn in net debt. Change rating from Outperform to Buy as target price increased and market price declined by 3% since our update report in 8/2024.
View details in the attachment below.
