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KBC – The 1st 2022 Extraordinary General Meeting key takeaways – EGM Update

Company Note 10/02/2022    118

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  • KBC posted VND212bn in 4Q21 NP (+9.3% yoy). Consequently, FY21 NP soared 249.8% yoy to VND783.7bn, but making up only 74% our forecasts.
  • Management targets VND9,800bn (+127.5% yoy) for FY22F revenue and VND4,500bn (+474.2% yoy) for net profit.
  • The EGM approved to pay stock dividend by 33.33% and raise its capital via private placement in 2022.

Market Price

Target Price

Dividend Yield

Rating

Sector

VND56,400

VND81,800

0.0%

ADD

            Property

Weaker than expected 4Q21 results

  • In 4Q21, KBC leased out 31.2ha of IP land (-22.2% yoy), in which Quang Chau IP (15.9ha) and Nam Son Hap Linh IP (15.3ha).
  • KBC recorded an unexpected expense of VND115.8bn due to IP land transfer between tenants in Q4/21. This amount was largely offset in 4Q21 revenue.
  • 4Q21 GPM expanded by 41.9% pts yoy to 59.6%, as KBC revised its outdated development cost for 90ha land area at Quang Chau IP in 4Q20.
  • 4Q21 financial income drop 80.7% to VND52.0bn due to one-off profit of VND250.5bn from divesting Saigon Hue IP JSC in 4Q20.
  • KBC recorded 4Q21 revenue of VND1,232.0bn (+0.9% yoy) and NP of VND212.0bn (+9.3% yoy).
  • Consequently, KBC posted FY21 revenue of VND4,309bn (+100.3% yoy) and NP of VND784bn (+249.8% yoy), coming in at 92.6%/74.0% our forecasts.

The management targets VND4,500bn (+474.2% yoy) for FY22F net profit

  • The management announced that KBC is completing legal procedures for investment licenses for three IPs (c.1,300ha) in Hai Duong after being added to the province’s master planning at end-2021. Of which KBC has submitted an investment license application for Binh Giang 1 IP (150ha).
  • Trang Due 3 IP has submitted documents awaiting approval from the Ministry of Planning and Investment. The company has completed compensation and clearance of more than 100ha and expected to start handing over from 2Q22. Previously, KBC shared that the company signed an MOU to lease 35ha for US$135/sqm in early-2022 and plans to sign an MOU with LG Display Vietnam to lease 80ha for US$130/sqm at this IP.
  • KBC is selecting contractors for Trang Cat urban area project and expects to start ground filling for its first 50-80ha land area in early-2Q22. The detailed plan will be shared in the Annual General Meeting of Shareholders 2022.
  • Management is guiding for FY22F revenue of VND9,800bn (+127.5% yoy) and net profit of VND4,500bn (+474.2% yoy).

FY22F capital raising plan:

  • KBC plans to issue a maximum of 150m new shares in a private placement (equivalent to 26.3% of its current share) to beef up its working capital, restructure debt and/or increase the scale of operating capital, capital contribution to subsidiaries, joint ventures, and associates.
  • The selling price is not lower than 80% to the 30 consecutive days of average closing price.
  • The transfer restriction period is 36 months for strategic investors and 18 months for professional securities investors.
  • EGM approved to pay a 2021 stock dividend with the ratio of 3:1.

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