VHM Update – OUTPERFORM

A slight decline in 1H2025 business result was mainly due to a lower number of delivered units. Keep our 2025 forecast unchanged. Adjust YE2025 target price up by 65% to VND115,900/share given the adding of 3 industrial parks, Phuoc Vinh Tay and Cam Ranh projects, increases of average selling prices at Green Paradise, Lang Van and Apollo City by 5-30%, and a decline of VND24.8 trn in net debt in 2Q2025. Reiterate our Outperform rating.
VHM posted a slight decline in its 1H2025 result with revenue of VND34,673 bn (-5% YoY) and NPAT of VND10,877 bn (-6% YoY) given a lower number of delivered units. However, we think the 2H2025 will be much better compared to the same period of last year as the company will deliver more retail units at Royal Island, OP2, OP3 and Golden Avenue and recognize some bulk sales transactions at Green Paradise, Golden City, Green City, etc. We keep our 2025 revenue forecast unchanged with revenue of VND89.9 trn (-12% YoY) and NPAT of VND38.8 trn (+11% YoY).
VHM set a very ambitious 2025 sales value target of VND150-200 trn which is 44-92% higher than its 2024 result as it expects to launch 5 new projects (Wonder City, Green Ciy, Golden City, Lang Van and Green Paradise). Sales value in 1H2025 grew by 31% YoY, to VND67.5 trn mainly thanks to the launch of Wonder City in March which accounted for over a half of the total sales value. In June, VHM launched two new projects Vinhomes Green City in Tay Ninh and Vinhomes Golden City in Hai Phong with absorption rates of 27-28% within in just a few days. We keep our forecast for 2025 sales value at VND150 trn (+44% YoY) mainly from Wonder City, Green City, Golden City, and Green Paradise projects. Unbilled sales at the end of 2Q2025 were VND138.2 trn (+16% YoY), of which Wonder City and Royal Island accounted for around 30% of the total presales each.
Improved leverage ratios. In 2Q2025, net debt declined by VND24.8 trn, leading to a decrease of Net debt/Equity from 28.3% to 16.6% and Net debt/EBITDA from 2.2x to 1.5x, which are lower than the industry median of 26.0% and 5.0x, respectively
We reiterate our Outperform rating for this stock with adjusted YE2025 target price up by 65% to VND115,900/share given the following drivers:
(1) Adding 3 industrial parks (Vinhomes Vung Ang, Tan Trao, Ngu Phuc), Phuoc Vinh Tay and Cam Ranh projects to our valuation model
(2) Increases of average selling prices at Green Paradise, Lang Van and Apollo City by 5-30%, and
(3) A decline of VND24.8 trn in net debt in 2Q2025.