IDC — Initiation report — Strong Fundamentals, Deep Value Opportunity

Vietnam industrial property remains a key beneficiary of the “China+1” shift. With sustained cost competitiveness, improving infrastructure, and a supportive policy environment, Vietnam remains among the most attractive destinations for FDI investors seeking alternative production bases.

Short-term headwinds are unlikely to derail long-term momentum. Geopolitical uncertainties have moderated leasing activity this year, but we expect momentum to reaccelerate from 2H25 as tariff fears ease. This view is confirmed by robust YTD FDI inflows, which highlight investors’ enduring confidence and underscore that Vietnam’s competitiveness remains intact. This view supports a constructive medium-term outlook for the IP market.

Large ready-to-lease GLA should allow IDC to capture near-term demand. As of 2Q25, IDC reported ~440ha of available-to-lease IP land located in tier-1 cities in Northern & Southern Vietnam. It thus appears well positioned to capture demand in the sweet spot of limited supply in the next 3-4 years, after which a substantial wave of newly approved IPs becomes operational.

Four additional IP projects are in the long-term pipeline. Since 2024, IDC has obtained investment approvals for four new IP projects, adding over 1,200ha to its landbank. This provides a critical supply pipeline to meet future leasing demand and underpins our positive view on the company’s long-term growth outlook.

Attractive entry point with P/B ratio (~2.39x) well below the 3-year historical mean. Supported by solid fundamentals, strong cash flows, and upcoming project catalysts — offering re-rating potential. Despite a reduced payout, its 5.3% dividend yield remains appealing, providing downside protection for long-term investors.

We initiate coverage on IDC with a BUY rating with a target price of VND 50.400, implying 12-month TSR of 38.3%.

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