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Top billion-dollar giants in Vietnam’s real estate market

Top billion-dollar giants in Vietnam’s real estate market

Friday 08, 03 2024
Despite the difficulties of the entire industry, the overall business results of some real estate businesses recorded growth in revenue and profits in 2023. Specifically, more than 85% of businesses reported profits and 37% of businesses saw an increase in profits.

Opposite trends

By the end of fiscal year 2023, the overall business results of 75 real estate businesses on Vietnam’s stock exchange increased by more than 12% in net revenue and increased by more than 8% in net profit; reaching over 206,000 billion VND and over 53,640 billion VND respectively.

Opposite trends

Vinhomes Joint Stock Company (Code: VHM) continued to be the pillar of the industry, contributing 50% of revenue and 62% of profits, which are equal to more than 103,000 billion VND and more than 33,125 billion VND, respectively.

Financial reports of businesses show that data on business results were still positive (64/75 businesses were profitable; 28/75 businesses had profit growth). This reflects the opposite of the general difficult situation in the entire market last year.

In addition to new sales activities, profits of businesses were supported from sales in previous accounting periods which were eligible to be recorded in revenue. It should also be noted that revenue and profit on the income statement do not mean there is actual cash flow to the business but can be recorded in receivables.

There are many cases where real estate businesses report profits that do not come from main business activities but from other activities (assessment of asset differences, investment cooperation contract profits...).

In fact, despite reporting profits and profit growth, the cash flow of real estate businesses is under great pressure. Among the 6 most profitable enterprises in the industry, two enterprises reported profits of trillions of VND, Becamex IDC and Sunshines Homes, but their business cash flow was trillions of VND negative.

Top 6 trillion-VND real estate businesses

Top 6 trillion-VND real estate businesses

The 6 businesses that maintained a net profit of over trillion in the year include Vinhomes, Vincom Retail, Becamex IDC, Kinh Bac, IDC and Sunshine Homes.

Vinhomes continued to lead in terms of profits, while also setting the highest peak in business history with a 66% growth in revenue and a 15% increase in profit compared to 2022.

Amid many challenges in the real estate market, Vinhomes opened for sale 28,000 new products (down 7% over the same period), recording total annual contract sales of about 87,000 billion VND (equivalent to 3.6 billion USD), down 32% from the peak in 2022 when launching Vinhomes Ocean Park 2 - The Empire with record sales.

Similarly, Vincom Retail (Code: VRE) also set a new record for business results when net revenue reached 9,791 billion VND (an increase of more than 33%) and net profit of more than 4,400 billion VND (an increase of nearly 59%).

The rental segment grew by 13.6% in revenue and 23.4% in gross profit, reaching 7,796 billion VND and 4,557 billion VND, respectively. The average occupancy rate at shopping malls reached over 80% with a growth rate of 1.3 to 1.6 percentage points during the year; except for Vincom+ which had an occupancy rate of 71.7%, down 1.8 percentage points. Total commercial floor area as of the end of the year was over 1.7 million m2, unchanged compared to the previous year.

Investment And Industrial Development Corporation (Becamex IDC, Code: BCM) rose to 3rd place in terms of profit (up 2 places compared to 2022) when reaching over 2,441 billion VND, an increase of nearly 45% compared to with the previous year.

In the last quarter of the year, Becamex IDC's revenue and profit were unexpectedly high (6 times higher in revenue and 36 times higher in profit compared to the same period).

According to previously published documents, Becamex IDC received an advance deposit of 2,310 billion VND from partners from the first quarter of 2022. At the end of the year, the enterprise no longer recorded this item. Instead, Becamex IDC's balance sheet generated short-term receivables of 2,776 billion VND from the transferee.

By the end of 2023, Becamex IDC was the enterprise with the highest capitalization in the industry (more than 65,100 billion VND), second only to Vinhomes (more than 188,100 billion VND) and its asset scale was over 53,180 billion VND. When compared with these two indexes, the company's profit was not adequate when it was equivalent to less than 4% of capitalization and less than 6% of total assets.

Kinh Bac City Development Holding Corporation (Code: KBC) also increased 2 places to reach the 4th position in the industry profit ranking. The consolidated financial statements show that the enterprise achieved 5,645 billion VND in net revenue and about 1,996 billion VND in net profit, 6 times higher in revenue and 31% more in profit compared to 2022.

IDICO Corporation - JSC (Code: IDC) reached nearly VND 7,240 billion in net revenue and its net profit was 1,393 billion VND in 2023, down 3% and 21% respectively over the same period. This is the only enterprise in the top trillion in profits whose business results decreased.

In the last quarter of the year alone, IDICO grew 85% in revenue and 167% in profit thanks to industrial park infrastructure leasing contracts that met the conditions for one-time revenue recognition.

Sunshine Homes Development Joint Stock Company (UPCoM: SSH) continued to grow by triple digits in both revenue and profit last year, reaching 2,900 billion VND (up 238%) and 1,169 billion VND (up 276%), respectively.

By the end of 2023, Sunshine Homes' asset scale was over 13,199 billion VND, surpassing many businesses in the same field More than 68% of assets of this business were receivables which is the main cause of negative business cash flow of trillions.

Source: vietnambiz

Compiled by VietnamCredit


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