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Top 10 construction companies in Vietnam 2020

Top 10 construction companies in Vietnam 2020

Thursday 10, 09 2020
Vietnam's construction industry has experienced significant development in the past decades. In addition, the construction capacity of Vietnam has made many progresses, meeting the construction needs of large-scale projects.

Top 10 construction companies

Making a major contribution to the development of Vietnam's construction industry are large construction companies and corporations. Using its huge data source, VietnamCredit has selected 10 largest companies in the construction industry. The list was made based on the revenue and profit of these companies. In addition, non-financial factors such as credit ratings, reputation, and legal records were also accountable. 
Top 10 construction companies

Overview of Vietnam’s construction industry in 2020

According to Vietnam's socio-economic development strategy for 2011-2020, the construction industry has important strategic position and plays a vital role in the nation's construction and development. Along with the recovery of the real estate market between 2014 and 2018, the construction, installation and infrastructure development sectors have thrived with an average growth of 9.15% per year while the figure for 2013 and the previous years was only 4.75%.

However, growth of the construction industry has been slowing down. According to the Institute of Urban Planning and Development Research, since mid-2018, the growth rate of the construction, installation and infrastructure development sectors has decreased sharply. 

Currently, construction companies are facing a lot of difficulties including the fierce competition within the industry, the slowing real estate market, and the imbalance between total debt and capital as receivables on total assets have increased. In addition, there has been a sharp increase in loan, which has eroded profits, leading to a decline in business efficiency of these enterprises.

Factors that have significantly affected the financial situation of construction companies include low disbursement rate, and postponement of projects using public investment capital. To deal with difficulties, many businesses in the industry have adopted different development strategies by maintaining core businesses (construction, installation or construction of underground works), and expanding business activities to real estate, hydroelectricity, and renewable energy.

In February 2020, the VN-Index dropped sharply from 990 points to 725 points (down 27%). Vietnam's stock market capitalization has evaporated over US$15 billion, accompanied by a huge sell-off of foreign shares (more than VND 28,300 billion in February 2020 and VND 7,500 billion as of March 19). Vietnam's macroeconomic prospects were severely affected, and its GDP growth may decrease by 0.5 - 1%.
Recently, construction stocks have been sold at critically low prices. Many stocks have plunged to below their book value.

However, in the context that many valuable and unvaluable stocks have been sold off, stock value of the construction industry in general has been less affected than the market average. According to statistics, while the stock market value has decreased by more than 26.7% in the past month, that of the construction industry only decreased by about 10-12%. With the current attractive price, investors are advised to form a financial investment plan for the near future.

Compiled by VietnamCredit

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