Hoa Phat to build its profit margins

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At Hoa Phat Group’s (HPG) recent annual general shareholders’ meeting, group executives said they expected property to contribute up to 30 per cent of HPG’s total profit margins within the next three years as well as significantly alter its profit structure.

HPG is involved in a hi-end office tower and residences complex in Hanoi’s Giai Phong road which was slated for completion in 2012.

Another big project now under construction is the Mandarin Garden mixed-use complex which is positioned on Hoang Minh Giam street,  in western Hanoi. Construction of the project’s basement was reportedly completed by end of 2010 and developer HPG set to launch model housing and begin selling products within the complex in early 2011.

HPG chairman Tran Dinh Long said the project would bring the group not less than VND2 trillion ($96.6 million) in profits.

Besides, HPG has poured capital into the 281 hectare Dai Mo-Tay Mo urban area southwest of Hanoi along Thang Long avenue whose detailed planning with scale 1/2,000 got the nod from Hanoi authorities.

HPG is also the developer of Pho Noi A urban area in northern Hung Yen province’s My Hao and Van Lam districts whose detailed planning with scale 1/500 was approved by the provincial authorities.

HPG is taking prudent steps in regard to property business, according to its chairman Tran Dinh Long.

Long also noted that HPG would only direct capital towards highly feasible property housing projects in big cities and show no interest in building offices for lease.

Long said traditional business lines such as steel and furniture production would still contribute up to 70 per cent of the group’s profits with property offsetting the remaining 30 per cent.

According to general director Tran Tuan Duong, HPG expected to reap approximately VND520 billion ($25.1 million) in after-tax profits in the first quarter of 2011 and strived to achieve VND17.5 trillion in total revenue and VND1.865 trillion in after-tax profits with an earnings-per-share level of VND5,528 in 2011.

In respect to property business, HPG would gain more than VND4 trillion in profit during 2011-2015, said Long.