Industry Report

• We believe that the 2026-2027 period will represent a new expansion phase for Vietnam’s real estate sector, as:(1) infrastructure development is expected to enhance demand for and value of real estate products; (2) continued legal supports with focus on genuine housing demand; (3) a substantial new supply is expected to be launched; (4) interest rates may rise but are likely to remain at relatively low levels; (5) gradual recovery of effective funding channels (e.g., corporate bond market). However, the expansion phase also entails certain risks for developers, including: (1) potentially sharp increases in land-use fees, (2) possible pressure on absorption rates, and (3) rising financial expenses.

Amid the opportunities and challenges of the real estate sector’s expansion phase, companies with sufficient resources to seize opportunities before a potential oversupply phase are expected to be the primary beneficiaries:

Real estate developers: Some companies under our coverage are shifting from a sequential project execution model to the simultaneous development of multi projects, with KDH being a notable example. Moreover, developers are actively seeking to expand their land banks through M&A, aiming to capture near-term development opportunities, with PDR stands out in this regard.

Realtors: Heightened activity in the real estate market typically translates into stronger brokerage revenues, and we believe the 2026-2027 period will be no exception, given the large volume of new supply expected to come to market. However, each company’s ability to gain market share and control costs will be critical in determining profitability and equity valuation. Within this segment, we identify DXS as a leading representative.

• Against a backdrop of significantly improved presales and cash flow compared with the previous valuation peak in 2021, we believe real estate equities continue to offer upside potential. Based on anticipated operational upside and valuation re-rating potential, we select KDH, PDR, and DXS as our top picks for the real estate sector in 2026.