CTD Flash note – OUTPERFORM

COTECCONS CONSTRUCTION JSC (CTD VN)

CTD (fiscal year: 01/07/2025–30/06/2026), delivered strong results in 9MFY2026, driven by steady growth in its core construction business and a one-off gain from the divestment of the Emerald 68 project. On this basis, we maintain our FY2026 forecast with revenue of VND31,308 bn (+26% YoY) and NPATMI of VND728 bn (+60% YoY). We expect CTD to continue to benefit from the recovery of residential and industrial real estate segments as well as accelerated infrastructure investment. We are changing our recommendation from Buy to Outperform as the stock price has risen 15% since the last report, with a mid-2026 target price of VND99,800 per share, adjusted for stock dividend issuance.

Solid operating performance: 1Q2026 net revenue reached VND6.409 bn (+28% YoY) and 9MFY2026 revenue totaled VND23,869 bn (+43% YoY), completing approximately 80% of FY2026 management guidance and 76% of ACBS forecasts, underpinned by stable growth in core operations. Gross profit in 1Q2026 increased to VND287 bn (+84% YoY); 9MFY2026 gross profit reached VND980 bn (+75% YoY), with gross margin improving to 4.2% from 3.4% in the same period last year. NPAT in 1Q2026 rose to VND119 bn (+108% YoY), and 9MFY2026 NPAT reached VND642 bn (+152% YoY), achieving roughly 92% of the full-year plan and 88% of ACBS projections, largely reflecting the Emerald 68 divestment booked in 3Q2025 and strong growth from construction activities.

Backlog expanded significantly: Newly signed contracts in 1Q2026 totaled VND30,000 bn (+383% YoY), lifting total backlog to VND65,500 bn (+185% YoY) and reinforcing earnings visibility. Notably, the “repeat sales” strategy has proven effective, with major clients such as Sun Group, BWID, and Viettel continuing to award new contracts, accounting for 75% of total contract value. This underscores a high level of client trust in CTD’s execution capabilities and construction quality, reinforcing its competitive positioning in the market.

Receivables declined slightly while leverage increased: In 1Q2026, CTD’s receivables stood at over VND14,975 bn (-5.6% YTD), accounting for 43% of total assets, primarily comprising short-term trade receivables. The company has recognized provisions of VND1,287 bn for doubtful receivables. Despite the net debt-to-equity ratio rising from -14.7% to 9.1% since the beginning of FY2026, CTD continues to maintain the lowest net leverage in the construction sector, underscoring its strong financial stability.