NLG Update – OUTPERFORM

NAM LONG INVESTMENT CORPORATION (NLG VN)

NPATMI 2Q2025 declined by 31% YoY due to a financial profit of VND230 bn from transferring 25% of Paragon Dai Phuoc incurred in 2Q2024. However, 1H2025 NPATMI tripled YoY, to VND208 bn mainly thanks to a higher number of units delivered. Maintain our 2025 forecast but increase YE2025 target price by 5% to VND45,600/share given increases in estimated selling prices of Mizuki and Izumi by 9-23%. Change our rating from Buy to Outperform as stock price has increased by 32% since our update report in 5/2025.

Nam Long posted a mixed 2Q2025 business result with revenue of VND773 bn (+206% YoY) and NPATMI of VND99 bn (-31% YoY). The growth in the top line was driven by a higher number of units delivered at Can Tho, Southgate, Akari, and Izumi projects (239 units vs 70 units) while the decline in the bottom line was mainly due to a financial profit of VND230 bn from transferring 25% of Paragon Dai Phuoc incurred in 2Q2024.

However, 1H2025 result was positive with revenue of VND2,064 bn (+352% YoY) and NPATMI of VND208 bn (+206% YoY), completing 30% of profit target and 29% of our forecast. Growth mainly came from a higher number of units delivered at Can Tho, Southgate, Akari, Mizuki and Izumi projects (1H2025: 798 units; 1H2024: 261 units). Gross margin declined to 36.1% from 47.1% mainly due to lower revenue recorded from the high-margin Southgate project and the adding of revenue from a low-margin Can Tho EhomeS project.

Sales activities in 2Q2025 achieved positive result of VND2,789 bn (+412% QoQ and +85% YoY), of which Southgate was the best seller with a sales value of nearly VND2 trn. Sales value in 1H2025 was VND3,334 bn (+24% YoY), completing 23% of target and 28% of our forecast. Sales activities is expected to accelerate in 2H2025 following the legal progress of Izumi project (adjusted 1/500 Plan was approved in 6/2025), launch of a new project An Zen Residences in Hai Phong and start construction of Solaria Rise zone (ST5 zone with 698 apartments) in Southgate project, Trellia Cove zone (CC5 zone with 817 apartments) and LK11 zone (24 townhouses) in Mizuki project in 7/2025.

NLG’s leverage ratios increased but still at adequate levels. In 1H2025, net debt increased by VND1,843 bn to VND2,737 bn, Net debt/Equity ratio rose from 6.1% to 19.3% and Net debt/EBITDA from 0.5x to 1.3x. We expect leverage ratios to improve after NLG completes the 15% transfer of Izumi project in 2H2025 and a rights issue of 100.12 mn shares (equivalent to 26% of outstanding shares) to current shareholders at an offering price of VND25,000/share.

We maintain our 2025 forecast with revenue of VND6,264 bn (-13% YoY) and NPATMI of VND715 bn (+38% YoY). We adjust YE2025 target price up by 5% to VND45,600/share as we increase estimated selling prices of Mizuki and Izumi by 9-23%. Change our recommendation from Buy to Outperform as the stock price has increased by 32% since our update report in 5/2025.