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HHV Flash note – BUY
11/02/2025 - 2:38:30 CHDEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JSC (HHV VN)
HHV’s 4Q2024 and 2024 business results were positive, aligning with ACBS’s forecasts. Keep 2025 forecast and YE2025 target price nearly unchanged at VND16,000/share, upsize 27.5%.
HHV announced its positive 4Q2024 business results, with revenue reaching VND1,010 bn (+17% YoY) and NPATMI standing at VND95.5 bn (+86% YoY). In 2024, the company recorded high growth with revenue of VND3,308 bn (+23% YoY) and NPATMI of VND405 bn (+22% YoY), completing 114% of profit target and 109% of our forecast. The primary drivers of HHV’s growth were its two main business segments: BOT toll collection and construction services.
BOT Segment: Revenue for 2024 reached VND1,913 bn (+22% YoY) thanks to the growth in vehicle traffic through toll stations (ranging from 7% to 28% depending on the station) and the planned increase in road usage fees. In 4Q2024, HHV acquired the entire 38% stake of Deo Ca Group in Cam Lam – Vinh Hao Expressway JSC.
Construction Segment: Revenue was recorded at VND1,151 bn (+10% YoY), driven by the accelerated construction progress at key projects such as Quang Ngai – Hoai Nhon, Cam Lam–Vinh Hao, Lien Chieu Port Connector Road, and the coastal road in Binh Dinh.
Gross Profit Margin: HHV’s gross profit margin remained stable at around 40% in 2024, similar to 2023. Specifically, the BOT segment saw an improvement, rising from 61.8% to 65.5%, attributed to increased vehicle traffic and higher toll fees. Meanwhile, the construction segment experienced a drop in gross profit margin from 9.8% to 6.5% due to the nature of the projects undertaken in 2024, which were awarded through direct appointment and had less complex construction techniques, resulting in lower profit margins compared to the same period last year.
At the end of 2024, HHV’s backlog was recorded at over VND2,500 bn, nearly 2.5 times the revenue of the construction segment for 2024. This backlog provides a foundation for continued growth in the 2025-2026 period as projects reach completion stages. In 2025, HHV aims to complete the Quang Ngai – Hoai Nhon project and focus on accelerating the implementation of the Dong Dang – Tra Linh project. In 4Q2024, HHV approved the increase of its ownership in the Dong Dang – Tra Linh Expressway project from 15% to 40%.
Quick comments: We keep our 2025 forecast nearly unchanged with revenue of nearly VND3,792 bn (+14.6% YoY) and NPATMI of more than VND420 bn (+9.9% YoY). Our YE2025 target price was maintained at VND16,000/share. Reiterate our Buy recommendation for this stock.
