NLG Update – BUY

1Q2026 revenue and NPAT were flat, while NPATMI dropped 37% YoY due to an increase in minority interests. Sales performance remained positive despite the high-interest-rate environment. We revised our 2026 revenue forecast up by 10% and NPATMI up by 1%, factoring in the transfer of educational land lots at the Waterpoint project. The YE2026 target price is adjusted down by 5% to VND38,700/share due an increase of nearly VND900 bn in net debt and a reduction in ownership at the An Zen Residences project from 100% to 51%, partially offset by an increased stake in Elyse Island from 50.5% to 58.9%. We maintain a BUY rating based on NLG’s healthy financial position, clean land bank, and its advantage in the affordable housing segment supported by government policies.

Nam Long reported flat 1Q2026 results with revenue of VND1,279 bn and NPAT of VND110 bn. However, as minority interests surged from VND1 bn to VND41 bn, NPATMI fell 37% YoY to VND68 bn, completing 9% of the full-year guidance and 10% of our forecast. Revenue in 1Q2026 mainly included:
(1) VND734 bn from the handover of projects such as Southgate, Can Tho, etc. and
(2) VND490 bn from the transfer of educational land lots in Waterpoint Phase 2 to Khai Sang Corp – the developer of EMASI Plus Waterpoint school.

Positive sales performance. 1Q2026 pre-sales surged nearly fourfold YoY, reaching over VND2,000 bn, primarily driven by Mizuki, Izumi, Southgate, and Elyse Island projects. In April 2026, the company launched a new project Sol Garden (Phase 1 of VSIP Hai Phong project which covers 9.9 ha and 369 low-rise units). Within the first 20 days of April, over 100 units of this project were sold with a total value of VND1,200 bn. Consequently, cumulative pre-sales from January 1 to April 20, 2026, reached over VND3,500 bn (+36% YoY), achieving 15% of the annual target. According to management, this success is attributed to flexible payment schedules, customers’ reduced reliance on leverage, and attractive interest rate support packages.

In 1Q2026, NLG completed the acquisition of Ehome Ha Long (1.3 ha, 964 apartments). Expected selling prices are approximately VND38 mn/sqm (~VND2.5 bn/unit). We expect a high absorption rate of this project due to the scarcity of affordable housing projects and NLG’s strengthening brand in the Northern real estate market following successful launches of An Zen Residences and Sol Garden projects in Hai Phong.

In April 2026, Nishi-Nippon Railroad (Nishitetsu) acquired a 49% stake in Nam Long ADC—a subsidiary focused on low-to-mid income housing. Nam Long ADC aims to develop ~22,000 units across 38 hectares in over 10 cities/provinces in 2025-2035. Post-transaction, NLG’s ownership in Nam Long ADC decreased to 51%. This subsidiary is currently developing three projects: An Zen Residences, EhomeS Izumi, and Ehome Ha Long.