Equities | Vietnam | Real Estate Development

Vincom Retail (VRE - HSX)

Flashnote

31 March 2025

 

Source: Company, HSC Research estimates

 

Share price performance

Source: Company, FactSet

 

Summary financials and valuation

Year end: Dec
12-24A
12-25F
12-26F
Net sales (VNDbn) 8,939 8,626 9,406
EBITDA adj. (VNDbn) 5,152 4,880 5,245
Pre-tax profit (VNDbn) 5,133 4,194 4,403
Net profit adj. (VNDbn) 3,683 3,356 3,523
FCF (VNDbn) (3,434) 1,773 1,287
EPS adj. (VND) 1,621 1,477 1,550
DPS (VND) 1,000 1,000 1,000
BVPS (VND) 18,449 19,926 21,476
EBITDA adj. growth (%) (14.4) (5.27) 7.48
EPS growth adj. (%) (7.10) (18.1) 4.98
DPS growth (%) 0 0 0
EBITDA adj. margin (%) 57.6 56.6 55.8
Pre-tax margin (%) 57.4 48.6 46.8
Net margin adj. (%) 45.8 38.9 37.5
Div. payout ratio (%) 55.5 67.7 64.5
Net debt/equity (%) 4.37 2.50 2.12
ROAE (%) 10.3 7.70 7.49
Return on avg. CE (%) 8.16 6.76 7.19
EV/sales (x) 5.14 5.12 4.56
EV/EBITDA adj. (x) 8.92 9.05 8.18
P/E adj. (x) 12.0 13.2 12.6
P/B (x) 1.06 0.98 0.91
Dividend yield (%) 5.13 5.13 5.13

Source: Bloomberg, HSC Research estimates

 

Company description

VRE, a subsidiary of Vingroup, is currently the largest developer, owner, and operator of shopping malls in Vietnam.

 

 

 

 

 

 

 

 

Event: FY25 AGM documents released

VRE published its FY25 AGM documents, noting its FY25 business guidance with detailed segmental results (leasing of shopping malls and shophouse sales), and no dividend payment for FY24 business results.

VRE’s FY25 guidance proposes net revenue of VND9.5tn (up 6.5% y/y) and profit after tax of VND4.7tn (up 14.8% y/y). The profit target is notably 40.1% higher than our estimate of VND3.4tn on higher NOI margin.

Earnings growth is expected to be driven by continued solid performance of the leasing segment, while earnings from shophouse sales might see a drop due to FY24’s high base. We await for more details at the AGM, which is expected to be held on 22 April 2025 in Hanoi.

Leasing activities: VRE’s guidance for FY25 expects VND9.3tn from core leasing revenue (13.6% higher than our estimates), driven by continued solid performance of the 88 malls in its pipeline. The company plans to bring three new malls into operation in FY25: two Vincom Mega Malls (VMM Royal Island and VMM Ocean City) and one Vincom Plaza (VCP Vinh). The new malls are estimated to add 120,000 sqm to the current 1.84mn.

Longer term, VRE’s strategy is to develop VMM malls located inside VHM’s mixed-used residential, which ensures stable foot traffic even during weekdays and takes advantage of the legal approval process.

Property sales: FY25 guidance expects VND220bn - in-line. Two additional shophouse projects have also been added to their pipeline: Vinhomes Royal Island (85,600 sqm) and Vinhomes Golden Avenue (24,200 sqm). Deliveries and revenue recognition are expected in FY26.

The company also proposed no dividend payment in FY24 for ongoing mall expansion and shophouse development plans, in-line with our expectations.

Rating, target price, estimates under review

VRE, up 19% since our last call Buy, is trading at a 48.7% discount to RNAV vs. its 3-yr average of 41.8%. Our rating/TP are under review.

 

 

Figure 1: FY24 business targets, VRE

(VNDbn)

FY24 results

FY25 target 

Growth y/y 

HSC F

Growth y/y 

% Diff

Revenue

8,939

9,520

6.5%

8,626

-3.5%

10.4%

  Leasing activities

7,878

9,300

18.1%

8,184

3.9%

13.6%

  Property sales

839

220

-73.8%

186

-77.8%

18.1%

Profit after tax

4,096

4,700

14.8%

3,356

-18.1%

40.1%

Source: VRE, HSC Research

 

Financial statements and key data

Note: *Excluding short-term investments.

Source: Company, HSC Research estimates

 

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Explanation of Institutional Equity Research Ratings

 

Buy: Expected to rise by more than 20% on an absolute basis in the next 12 months

Add: Expected to rise by between 5% and 20% on an absolute basis in the next 12 months

Hold: Expected to rise or decline by less than 5% on an absolute basis in the next 12 months

Reduce: Expected to decline by between 5% and 20% on an absolute basis in the next 12 months

Sell: Expected to decline by more than 20% on an absolute basis in the next 12 months

 

 

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