Khai Quang Industrial Park in Vinh Yen city of Vinh Phuc province. (Source: VNA)A recent report by SSI Research expected that the industry's profitafter tax will grow by 47.3% compared to the same period last year thanks toindustrial land demand which is forecast to recover positively after theeconomy reopened post-pandemic.
These positive signals also open up many expectations forindustrial real estate stocks in the second half of 2022.
Speaking on a talkshow organised by VietnamInvestment Review, Ngo Thi Kim Thanh, senior investment strategy specialistat the Center for Analysis and Investment Consulting of SSI Securities, believedthat in the first period of 2022, cash flow into the stock marketwitnessed a strong divergence and a circulation between industry groups.
Recently the group of industrial real estate stocks recoveredquite strongly, boosted by positive growth in demand for rental in industrialreal estate when FDI flows tend to return to Vietnam after two years of beinginterrupted by COVID-19 and causing rent prices in industrial parks to rise.
Although industrial real estate stocks have sharply rebounded, itis no longer as easy as in the previous period to choose the right stocks forinvestment due to different business results among companies.
However, SSI experts said that there are still attractivevaluation stocks that investors may be interested in, which are those withlarge land banks available for lease and large cleared lands.
A forecast report of SSI Research showed that profit after tax oflisted companies in the last six months of 2022 will grow by more than 24 %,mainly thanks to the strong increase in the rental land area during theperiod.
In addition, some industrial zones changed from regular recordingto one-time recording, leading to a sharp gain in profits.
In 2023, SSI Research expected that the net profit of listedindustrial park developers grows by about 18% year-on-year due to many factors.The first is that the total area of land for lease rise by 10% per year.Second, land rents are expected to pick up 8% in the southern region and 6% inthe northern region in 2023.
Of which, Kinh Bac City Development Holding Corporation (HoSE:KBC)’s profit after tax is estimated at 3.7 trillion VND (nearly 158.4 millionUSD), up 25% on year, as current projects continue to be the main source of revenue.Moreover, phase 3 of Trang Due Industrial Park project and other industrialzones in Long An province can start to generate income.
Meanwhile, IDICO Corporatio (HNX: IDC)’s net profit is expected toedged up 24% year-on-year to 2.2 trillion VND, mainly thanks to profits fromthe expanded Huu Thanh and Phu My Industrial Parks, and the divestment insubsidiary companies.
SSI experts also noted that revenue on the financial statements ofenterprises has long-term unrealised revenue.
For some industrial park developers, the value is very large suchas IDC has 5.9 billion VND in unrealised revenue. The reason is that in thepast, revenues from leasing of industrial parks were recorded in the long-termunrealised revenue section and will be distributed over the remaining time ofthe industrial park.
For a large long-term unrealised revenue, if the investor does nothave a land fund for lease, as well as a new project, this is a rather largesource of money and will be used to pay cash dividends. This is also aninvestment trend to minimise risks when the market fluctuates, especially forinvestors who prefer a high dividend policy./.
VNA
