- In FY21, BCG's net profit (NP) grew by 186.9% yoy, fulfilling 75.7% of our full year forecast as higher-than-expected minority interest.
- We revise our forecast for FY22/23/24F NP by -27.7%/-1.5%/+6.1% vs. previous projection due to the adjustment of property handover revenue.
- Upgrade form Hold to Add with higher target price of VND29,600/share.

Robust FY21 net profit growth thanks to strong financial income

In FY21, BCG's net revenue increased by 39.6% yoy to VND2,589bn, fulfilling only 48.2% of BCG’s FY21 revenue guidance and 84.6% of our FY21 forecast given the handover delay at Malibu Hoi An project during the nationwide social distancing. Profit from M&A helped financial income increased sharply by 169.1% yoy. Thereby, FY21 NP jumped by 186.9% yoy to VND606bn, exceeding 20.5% of the FY21 NP guidance but fulfilling only 75.7% of our full year forecast as higher-than-expected minority interest.

Property is the key earnings growth engine in FY22-23F

The Malibu Hoi An project handover will be delayed to FY22F due to the impact of the pandemic. In addition, we expect BCG will also hand over all 202 shophouses at Hoi An D'Or project in FY22F, bringing revenue of VND4,897bn (55.4% of total revenue) to BCG this year. In FY23F, we expect BCG will hand over Amor Residence Binh Chanh, 35 villas in Casa Marina Mui Ne, the rest of Hoi An D’or and a part of King Crown Infinity and Casa Premium projects. According to our forecast, BCG can record a revenue of VND5,233bn (+6.9% yoy), contributing 45.2% of total revenue from property deliveries in FY23F.

Renewable energy to widen its revenue contribution during FY22-23F

In FY22F, BCG will focus on building 550MW of wind power projects with the goal of energising 50MW of Dong Thanh wind power phase 1 (the remaining 30MW will be energised by 2023) and 100MW of Khai Long wind power phase 1. We forecast that BCG's power revenue will reach VND1,786bn (accounting for 20.2% of total revenue) in FY22F and VND3,791bn (accounting for 32.7%) in FY23F. We recommend Add with a higher target price (TP) of VND29,600/share We upgrade Hold to Add with a higher SOTP-based TP of VND29,600 with higher RNAV of property segment. Re-rating catalysts are (1) higher-thanexpected prices in hospitality property projects, (2) more favorable new FIT prices than expected after national PDP8. Downside risks including (1) the slow growth of the hospitality property market due to the pandemic, 2) the failure to complete the schedule to enjoy incentives for renewable energy projects, and 3) the risk of dilution due to huge capital needs.

Read the detailed report at: Here