CTD Flash note

CTD (fiscal year (FY): 1 July 2026 – 30 June 2027) posted positive 1QFY2027 results, with record-high net revenue and gross margin improving to ~5.0%; NPAT rose only slightly due to a high base from the Emerald 68 project transfer income in the same period last year. Accordingly, we keep our FY2027 forecasts unchanged, with revenue of VND42,150bn (+23% YoY) and NPAT of VND904bn (+15% YoY). The FY2026 year-end backlog of nearly VND70,000bn (+98% YoY), equivalent to about two years of revenue, lays the foundation for FY2027 growth. In addition, non-residential revenue is expected to account for around 50% of the total in FY2027, diversifying the project pipeline and reducing reliance on the residential segment amid a high interest rate environment. We reiterate our BUY rating with an end-FY2027 target price of VND87,500/share.

Positive business results: 1QFY2027 (3Q2026) net revenue reached VND11,269bn (+51.2% YoY), fulfilling ~27% of the FY2027 plan and 27% of our forecast. Gross profit reached VND562bn (+74.5% YoY), with gross margin improving to 5.0% from 4.3% in the same period last year. Interest expense rose to VND158bn (3.5x YoY) in line with higher borrowings, partly offset by financial income of VND184bn (+137.5% YoY). NPAT reached VND305bn (+3.6% YoY), fulfilling ~29% of the plan and 34% of our forecast. Revenue growth was driven by a backlog of nearly VND70,000bn (+98% YoY) at end-FY2026, while NPAT rose only slightly due to a high base in 1QFY2026, which included the gain from the Emerald 68 project transfer. Excluding the one-off gain from the real estate project divestment in 1QFY2026, NPAT could have grown by 188% YoY.

Backlog remains high: New contract wins in 1QFY2027 reached VND14,519bn (-25% YoY) as CTD proactively selected projects, including two packages of the Ben Thanh – Can Gio railway project worth around VND7,000bn, lifting the quarter-end backlog to VND77,082bn, equivalent to ~2.2x FY2026 revenue. In FY2026, CTD won 70 contract packages with a total value of VND60,307bn (+107% YoY); its “repeat sales” strategy continued to pay off, with major clients such as Vingroup, Sun Group, Masterise and MIK contributing more than 70% of total contract value. Infrastructure accounted for around 33% of new contract value (Can Gio Bridge, Gia Binh and Long Thanh airports, and the Phu Quoc airport expansion), and CTD targets non-residential segments to contribute ~50% of FY2027 revenue.

Receivables continued to rise. As of September 30, 2026, net short-term receivables reached VND18.04tn (+9.2% from end-FY2026), accounting for 44% of total assets. The VND526bn receivable from Ngoi Sao Viet (Tan Hoang Minh) has been fully provisioned, with potential recoveries excluded from CTD’s FY2027 guidance.

CTD maintained a net cash position despite rising borrowings. Total debt reached VND8.00tn (2.1x YoY), while cash, cash equivalents and short-term investments also rose 2.1x YoY to VND9.63tn. Consequently, net cash increased to VND1.63tn, with the net cash-to-equity ratio improving from 7.5% to 16.3%.