CTD Update_BUY

COTECCONS CONSTRUCTION JSC (CTD VN)

CTD delivered a solid Q3/2025 earnings performance, primarily driven by the divestment of the Emerald 68 project. For FY2026, we forecast revenue of VND 31,308 bn (+26% YoY) and parent-company net profit of VND728 bn (+60% YoY). We assess that the ongoing recovery in the real estate cycle, supported by end-user demand and rising urbanization, will be a key catalyst for construction activity in the coming period. With a healthy balance sheet, a consistently high backlog, and a well-diversified revenue mix across civil, industrial, and infrastructure segments, CTD is well-positioned to benefit from the acceleration of public investment and the broader sector recovery. We raise our target price for CTD by 14.5% compared to our previous report, setting a mid-2026 valuation of VND110,000 per share, and revise our recommendation from Outperform to Buy.

CTD (fiscal year: 01/07/2025–30/06/2026) posted a strong Q3/2025 performance with revenue of VND7,451 bn (+57% YoY) and net profit of VND294 bn (+216% YoY). Results were supported by a stable gross margin of 4.3% and a VND193 bn gain from contract termination at the Emerald 68 project. This outcome represents 42% of the company’s full-year guidance and 40% of our FY forecast. During the quarter, CTD secured VND19,300 bn in new contracts (+87% YoY), lifting its backlog to VND 51.6 tn (+47% YoY), thereby providing strong visibility for FY2026 and ensuring workload stability for subsequent years.

A robust asset structure enhances CTD’s competitiveness in bidding, particularly due to its solid liquidity position. CTD remains one of the few contractors maintaining a high level of cash and short-term deposits, reaching VND4,493 bn (+23% YTD), equivalent to over 15% of total assets as of Q3/2025. Notably, its debt-to-equity ratio stands at only 40%, significantly lower than the industry average of 110%.

Cost discipline and provisioning: As of Q3/2025, CTD’s receivables increased to VND 15,837 bn (+17.9% YTD), accounting for 51% of total assets, with the majority being short-term receivables. The company booked VND1,282 bn in provisions, while doubtful receivables declined to VND1.5 tn (-30% YoY), supported by provision reversals related to two major clients: Saigon Glory (VND143 bn) and Minh Viet (VND122 bn). We expect the receivables recovery trajectory to continue improving as the property market gradually rebounds.