KDH Update – OUTPERFORM

KHANG DIEN HOUSE TRADING AND INVESTMENT JSC (KDH VN)

A decline in 2Q2025 and 1H2025 NPAT was mainly due to lower gross margins of Privia project and small land lots delivered. Adjust our 2025 NPAT forecast down by 3% mainly due to an 171% increase in estimated payment discounts. Adjust YE2025 target price down by 11% to VND31,000/share given issuances of 10% stock dividend and 9.96 mn ESOP shares and a decline in valuation of Le Minh Xuan expansion industrial park. Change our rating from Buy to Outperform as stock price has increased by 13% since our update report in 4/2025.

KDH recorded a mixed 2Q2025 result with net revenue of VND1,047 bn (+62% YoY) and NPAT of VND196 bn (-30% YoY). Revenue mainly came from deliveries of remaining units at Privia project and some undisclosed small land lots. A decline in gross margin from 80.3% to 39.2% was due to lower margins of Privia project and small land lots compared to those of Classia and land lots delivered in 2Q2024.

For 1H2025, the company recorded net revenue of VND1,757 bn (+80% YoY) and NPAT of VND315 bn (-9% YoY), completing 32% of its profit target and 30% of our forecast.  Revenue mainly came from deliveries of over 400 units at Privia project and some undisclosed small land lots. Reasons for the decline of NPAT in 1H2025 were:

• A decline in gross margin from 70.2% to 41.3% given lower margins of Privia project and small land lots compared with those of Classia and land lots delivered in 1H2024,
• SG&A expenses rose by 72% YoY, to VND229 bn, and
• Financial expenses (i.e. payment discounts) climbed by 212% YoY, to VND102 bn

Gladia project (combined Emeria and Clarita projects with a total area of 11.8 ha in HCMC, 226 low-rise units and 616 high-rise units) is a key contributor to KDH’s 4Q2025 business result. The project’s low-rise component was completely constructed and will be launched for sale in Sep, 2025 with estimated ASP of around VND250 mn/sqm which is in line with our forecast. Part of the low-rise component will be delivered and recorded revenue in 4Q2025. The high-rise component is expected to be developed from 2026.

In July, 2025, KDH received a decision of Le Minh Xuan expansion industrial park’s land use fee of VND2,689 bn which is 2.6 times higher than our estimation. Thus, we adjust estimated total investment capital of this project up by 127%, to VND2,964 bn and DCF valuation down by 45% to VND904 bn.