HDG Update – OUTPERFORM

HDG announced Q1/2026 results, reporting VND684 bn in revenue, +14% YoY, and VND103 bn in NPAT, -50% YoY, fulfilling only 9% of the company’s plan and 10% of ACBS’s previous 2026 forecast. The weaker YoY performance was primarily attributable to the unexpected additional provision of VND193 bn related to the Infra 1 solar project, reflecting the difference between the transitioning RE price and the FIT1 during the period from the Commercial Operation Date (COD) in Sep 2020 to the issuance of the Completion Commissioning Acceptance (CCA) in Feb 2023. Consequently, we revise down our target price for HDG in 2026 from VND32,800 to VND26,100/share, implying an expected total return of 12.8%, rating OUTPERFORM.

By Q1/2026, HDG recorded revenue of VND684 bn, +14% YoY, supported by the recognition of VND49 bn in real estate revenue from Phase 3 of the Charm Villas project, whereas no revenue from this segment was recognized YoY. In addition, office leasing and hotel operations generated revenue of VND87 bn and VND45 bn, respectively, +10% and 22% YoY. Revenue and output from the energy segment remained relatively stable compared YoY. Specifically, electricity output declined by 1% YoY to 318 mil kWh, while energy revenue increased by 1% YoY to VND508 bn, mainly driven by higher solar output and improved average selling prices, which offset lower hydropower generation and weaker hydropower selling prices. As a result, gross profit reached VND442 bn, +10% YoY. However, NPAT fell sharply to VND103 bn, -50% YoY, due to the additional VND193 bn provision for the Infra 1 solar project, representing the tariff differential between the transitioning RE mechanism and FIT1 during the period between COD in Sep 2020 and CCA approval in Feb 2023. Management expects this provision to be the one-time off provision for the project, with no further provisioning required.

Based on the latest updates from Q1/2026 results, we revise down our 2026 NPAT forecast for HDG to VND890 bn, -12% from our previous projection. Accordingly, our new target price for HDG is VND26,100/share, implying an expected total return of 12.8%, rating OUTPERFORM.