IDC Update – BUY

IDICO CORPORATION – JSC (IDC VN)

The 3Q2025 business results were better than our forecast given higher industrial park area delivered than expected. We revised up our 2025 earnings forecast by 20% and rolling forward target price to VND51,900/share at YE2026. Therefore, we upgrade our rating from Outperform to Buy (+35.5% potential upside) as stock price has declined by 14% from our update report on 08/19/2025.

IDICO announced a double-digit growth in 3Q2025 results with revenue of VND2,871 bn (+26% YoY) and PBT of VND1,218 bn (+10% YoY) which outperformed our forecast given over 35 ha delivered mainly at Cau Nghin, Huu Thanh and Que Vo 2 industrial parks (IPs). In 9M2025, IDC posted revenue of VND6,428 bn (-7% YoY) and PBT of VND2,259 bn (-8% YoY), completing 72% and 87% of its targets, respectively. A decline in 9M2025 was mainly due to lower IP area delivered (63 ha vs 88 ha in 9M2024) which partly offset by increases of 2.5-8.9% YoY in average leasing prices (except for Que Vo 2 IP which had a flat leasing price in 9M2025).

IP segment’s revenue rose by 24% YoY, to VND1,537 bn in 3Q2025, outperforming our forecast, thanks to over 35 ha delivered mainly at Cau Nghin, Huu Thanh and Que Vo 2 IPs. However, 9M2025 revenue declined 22% YoY, to VND2,620 bn given lower IP area delivered (63 ha vs 88 ha in 9M2024). Segmented gross margin in 9M2025 slightly improved to 63.4% from 60.3% driven by higher average leasing prices.

IDC leased only 7.6 ha (-65% YoY) in 3Q2025 and 55.4 ha in 9M2025 (-15% YoY), equivalent to 45% of its target and 58% of our forecast, given concerns about the US tariffs. However, the framework agreement between the US and Vietnam was announced in late October 2025 and potential tenants’ interests might improve in 4Q2025 with some contracts (8-10 ha/contract) are under negotiation. However, in our view, it is unlikely that the company can complete the 2025 leasing target of 123.5 ha.

Regarding Tan Phuoc 1 IP, land clearance process is expected to be completed at the end of 2025 as the land reimbursement price (~USD10/sqm) was approved by the province’s people committee. Absorption rate is expected to be improved when IDC gets the approval to add textile and dying sector into this IP.

The ready-built factory/warehouse projects in Nhon Trach 1 and Huu Thanh IPs have better performance than the industrial land leasing projects in 2025 as tenants prefer short-term lease for market testing in the midst of uncertainty posed by the trade war. In Nhon Trach 1 IP, Phase 2 of 14 ha is under planning and will start construction by 4Q2025 or 1Q2026 after Phase 1 of 8.3 ha has been fully leased. In Huu Thanh IP, Phase 2 of 8.2 ha has been occupied 75% while Phase 3 of 18.7 ha has completed design and is under 1/500 Planning adjustment.

Power segment’s revenue had double-digit growth rates in 3Q2025 (+17% YoY, to VND1,048 bn) and 9M2025 as well (+18% YoY to VND2,786 bn). Therefore, segmented gross margins improved to 14.1% in 3Q2025 (3Q2024: 10.6%) and to 10.8% in 9M2025 (9M2024: 7.0%). Revenue growth mainly came from: (1) a 74% YoY growth in power volume at Dak Mi 3 hydropower plant and (2) a 4.8% increase in average power price distributed in IPs from 05/10/2025 according to Decision No. 1279/QD-BCT.

BOT segment was in line with our forecast with revenue of VND355 bn (+4% YoY) in 9M2025, driven by growth in PCUs. 9M2025’s segmented gross margin was recorded at 44.7%, higher than 36.4% in 9M2024 mainly thanks to lower maintenance costs.

Property segment posted a decline of 31% YoY in 9M2025 revenue, to VND340 bn given a major part of Bac Chau Giang project has been delivered in 2024. In early 2026, IDC will start to construct Phase 1 of Nhon Trach social housing project (4 blocks and 1,500 units out of a total of 8 blocks and 3,000 units) and expect to deliver them in 2027-2028.

Overall, the outlook for the IP segment has improved as framework agreements between the US and Vietnam were announced in late October 2025 and tariff rates remain unchanged from those announced in late July 2025, which were much better than those announced in early April 2025 and on par with neighbouring countries. Registered FDI in 10M2025 increased by 15.6% YoY, to USD31.5 bn and disbursed FDI grew to USD21.3 bn (+8.8 YoY).

In general, IDC’s stable power and BOT segments, sizable leasing IP area and high cash dividend yield (estimated at 9.2%/year) are expected to sustain in the coming years. We adjust 2025 IP area delivered from 72 ha to 83 ha and 2025 total revenue up by 7% to VND8,283 bn (-6% YoY) and PBT by 20% to VND2,650 bn (-12% YoY), equivalent to 95% and 102% of targets.
For 2026, we forecast revenue of VND8,131 bn (-4% YoY) and PBT of VND2,390 bn (-10% YoY) given stable growth in the power and BOT segments but a decline in the IP segment given lower delivered area and in the property segment given Phases 1 and 2 of the Bac Chau Giang project have been fully delivered in 2025.

Using the NAV method, we achieve a target price of VND51,900/share at YE2026, up by 9% compared to YE2025 target price given the adding of 20 ha of NLA in Nhon Trach 1 IP (which was converted from the greenery area exceeding the required planning) and a decline of VND868 bn in net debt. We upgrade our rating from Outperform to Buy as stock price has decreased 14% since our update report on 08/19/2025. With the closing price on 11/07/2025, IDC is trading at 2026F P/E of 9.1x and 2026F P/B of 2.3x compared with industry average of 12.2x and 1.6x, respectively.