This segment generates stable cash flow due to high demand from tenants, particularly in the context of limited IP land funds.

Core Business Slumps

LHG recently released its Q2 2026 financial report, posting revenue of over VND 189 billion, down 15% year-on-year. The decline was mainly driven by a sharp 51% drop in revenue from its primary segment—IP land leasing and infrastructure development—which fell to just over VND 53 billion. Although financial income rose by 38%, it mainly stemmed from bank deposit interest. In addition, other income surged unexpectedly, but the vast majority consisted of land compensation payments. However, these positive factors were still insufficient to offset the contraction in the IP real estate segment, which serves as LHG's core business.

Consequently, LHG recorded a net profit of over VND 75 billion, down 16% year-on-year. For the first half of the year, revenue reached over VND 365 billion, down 20%, and net profit reached over VND 187 billion, down 6% compared to the same period last year.

In 2026, LHG targets total revenue of over VND 728 billion and a net profit of nearly VND 166 billion, decreasing by 4% and 43% respectively compared to its 2025 performance. Thus, after the first half of the year, the company has completed 62% of its revenue plan and exceeded its profit target.

As of the end of Q2 2026, LHG’s total assets stood at over VND 3,427 billion, up 1% from the beginning of the year. Of this amount, nearly VND 960 billion was deposited in banks. Inventories remained stable, largely consisting of investment costs in the Long Hau IP at over VND 678 billion and residential areas at VND 147 billion.

Constrained Land Bank

According to Bao Viet Securities (BVSC), LHG's lackluster Q2 2026 business results stem largely from a shortage of commercial IP land available for lease. Currently, Long Hau 3 IP is the only project with remaining commercial land ready for business operations. Phase 3 of this 43.98-hectare project is underway, with land clearance for about 3.4 hectares yet to be completed. Furthermore, the remaining site clearance remains quite complex... This will pose ongoing challenges for LHG's core business in the near future.

Thanks to its favorable location, asking rental rates at Long Hau IPs range around USD 230-260 per square meter per lease term, which is considerably higher than the market average. However, the slow pace of remaining site clearance and scattered land parcels have left Long Hau IP with insufficient rentable land to attract FDI projects. Additionally, other IPs are still undergoing legal procedures, leaving LHG's current land fund limited compared to peers in the IP real estate sector.

Facing a shrinking land bank and aiming to attract FDI projects, the company is actively implementing and finalizing legal procedures for projects approved by the General Meeting of Shareholders totaling 440 hectares. These include the Long Hau Phase 2 Expansion IP (90 ha), An Dinh Vinh Long IP (200 ha), and Long Hau - Tan Tap IP (150 ha)...

Promoting a New Business Model

To address these challenges, LHG has been actively promoting a new business model. LHG's management recognizes that warehouses and factories can generate stable cash flows, ensuring the company's business performance. Therefore, ready-built warehouses and for-lease factories currently represent the optimal solution for small and medium enterprises like LHG to optimize initial capital expenditure. In the current leased IP real estate market, LHG and SIP are the two most active enterprises in warehouse and factory leasing among listed companies.

To pivot toward this strategy, LHG is aggressively investing in for-lease warehouses and factories. LHG's operational factory area is estimated at approximately 173,262 square meters, featuring a large scale tailored for high-tech industries. Additionally, LHG is constructing 3 major factory complexes scheduled for completion and operation starting this year, which will expand the factory area to 334.9 square meters (note: likely 334,900 square meters based on context), representing a 93% increase from the current level.

To date, the occupancy rate of LHG's operating factories exceeds 95%, with several areas reaching 100%. BVSC estimates that the 3 newly built factory complexes will start generating revenue in 2026 and achieve 100% occupancy, helping LHG's 2026 revenue reach the milestone of VND 305 billion...

Using the Sum-of-the-Parts (SOTP) valuation method, VDSC sets a long-term target price for LHG at VND 45,000 per share, corresponding to an expected return of 61% based on the closing price on June 26, 2026. The company suits conservative investment portfolios, backed by its strong financial position and consistent dividend payout policy.