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ANALYSIS & RESEARCH

Home PageThe analysisReal EstateNLG_Get ready for a fourth quarter sprint

NLG_Get ready for a fourth quarter sprint

21/10/2019 - 11:03

Hold-Outperform

TP upside (downside) 3.2%

Close 18 Oct 2019

Price                        28,800

12M Target            29,625

 

Event

Our Take

3Q19 revenues were VND 392bn, decreasing 71% YoY because NLG only handed over homes at mature projects in 3Q19. In addition, VND792 bn of revenues from the project transfers to other developers was recognized in 3Q18 – these did not repeat in 3Q19. Consequently, 3Q19 PAT of VND163 bn decreased 64% YoY. In total, 9M19 revenues (-51.5% YoY) and PAT (-40.0% YoY) have achieved 38% and 45% of FY19 guidance, respectively.

Short-term advances from customers were flat in 3Q19 while revenues from sales of inventories (i.e., land, apartments, townhouses, and villas) was VND197bn, decreasing 61% YoY. These results indicate that there was no positive signal in terms of the amount of new contracts signed in 3Q19.

Handing over c. 1,918 Flora segment condos in 4Q19, of which c.1,400 condos at Mizuki Park should be recognized as gains from joint ventures and the sales of c.400 condos at Novia should be consolidated into NLG’s operating revenues.

We reiterate our HOLD-Outperform recommendation. The successful soft launch of Water Point occurred in 3Q19 and we expect its official launch to be implemented in October. We also expect launches of Akari City and Mizuki Park to be implemented in 4Q19. Based on our discussions with sales agents and other industry sources, many homebuyers (i.e., residential buyers, investors, and speculators) are awaiting the launches of these projects.

For the complete report, please access here: NLG Express-Note 3Q19 results

Analyst: Tam Nguyen, tam.nguyen@yuanta.com.vn

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