Sonadezi Chau Duc shares reverse expectations

SZC leads the decline in industrial real estate stocks

Once a favorite stock of investors thanks to its large unexploited industrial land fund, SZC has continuously maintained its price increase since its listing (early 2019).

However, in the past week, SZC shares have suddenly become the focus of selling as investors worry that the reciprocal tariffs of the US, if applied in the future, will reverse the flow of trade and industrial real estate businesses will have difficulty attracting projects.

Statistics from March 27 to April 11, SZC shares decreased by 24.8%, from VND 43,750 to VND 32,900/share, while the VN-Index only decreased by 7.7%, to 1,222.46 points.

In fact, Sonadezi Chau Duc is different from many other industrial real estate enterprises when it is still in the process of developing projects due to its large land fund. In particular, at December 31, 2024, Sonadezi Chau Duc owns a cash fund of VND 1,040.1 billion, accounting for 12.6% of total assets; prepayments from buyers and unrecorded long-term revenue of VND 963.2 billion, accounting for 11.7% of total capital; total debt is up to VND 2,332.4 billion, accounting for 75.1% of total equity, this ratio is lower than many enterprises.

It is known that also in the industrial real estate industry, businesses that have developed projects for many years with a large number of tenants often have high occupancy rates and possess large amounts of cash and unrecorded long-term revenue items.

Of which, at the end of 2024, Saigon VRG Investment Joint Stock Company (code SIP) owns a cash fund of VND 5,890 billion, accounting for 23.5% of total assets and unrecorded long-term revenue of VND 11,729.6 billion, accounting for 46.8% of total capital; IDICO Corporation - Joint Stock Company (code IDC) owns a cash fund of VND 4,452.5 billion, accounting for 23.7% of total assets, unrecorded long-term revenue of VND 4,599.8 billion, accounting for 24.5% of total capital.

According to Shinhan Securities Vietnam's estimates, Chau Duc Industrial Park Project still maintains its attractiveness to businesses by maintaining an occupancy rate of over 60% of the total planned area. In particular, land rental revenue at the project is mainly from foreign businesses such as Korea, China, etc.

In addition, by the end of 2024, Sonadezi Chau Duc recorded long-term unfinished basic construction costs of VND 3,148.1 billion, accounting for 38.3% of total assets, and in 2025, Sonadezi Chau Duc plans to use VND 1,207.7 billion to carry out site clearance compensation and VND 437.6 billion to invest in basic construction.

Thus, being in the development phase of the Chau Duc Industrial Park Project requires Sonadezi Chau Duc to have a large capital source and continue to promote attracting investors to lease land. With customers mainly coming from Asian countries such as Korea and China - forecast to face many challenges with the US's reciprocal tax policy, Sonadezi Chau Duc will also have difficulty attracting customers to lease land in the near future.

Deep decline, but SZC stock valuation remains high

Regarding current risks, according to SSI Securities, the main risk for the market still comes from concerns about US tariff policies. Cash flow also shows more caution towards technology stocks, while recording a shift to other industries (consumer goods, raw materials, etc.).

Ms. Do Minh Trang, Director of ACB Securities Analysis Department (ACBS), commented that industrial real estate enterprises still have lease contracts, so they have not been affected immediately, but in the medium term, tariff barriers will cause enterprises to delay investment expansion plans, narrow business, and even foreign enterprises tend to look for alternative markets with lower tax rates. That prospect has a negative impact on the stock prices of industrial real estate groups.

Returning to SZC stock, although it has fallen sharply for more than a week, up to now, the valuation of this stock is not cheap. In particular, as of April 16, SZC stock is trading at a P/E valuation of 19.11 times, higher than the industry average of 16.19 times and a P/B valuation of 2.92 times, higher than the industry average of 1.47 times.

It can be seen that, although still owning a large land fund, implementing and attracting investment capital, investors are concerned about attracting new customers and retaining old customers at industrial park projects in general and Chau Duc Industrial Park Project in particular.

Source: https://baodautu.vn/co-phieu-cua-sonadezi-chau-duc-dao-chieu-ky-vong-d268977.html