Listed domestic real estate firms swimming in huge profits in 2017

February 27, 2018 | 18:50

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Over the course of 2017, 59 large-scale domestic real estate firms which were listed on the Vietnamese bourse, including Vingroup and NovaLand, were reported to have inundating profits totalling at VND155.093 trillion ($6.8 billion), up 39 per cent against 2016.

listed domestic real estate firms swimming in huge profits in 2017

The real estate market, especially Ho Chi Minh City, is forecast to continue to blossom in 2018

Specifically, at the end of 2017, Vingroup (HSC: VIC) was ranked as the No.1 domestic real estate firm in sales revenue and after-tax profit, recording a consolidated sales revenue of $3.97 billion, 57 per cent up on-year. Vingroup alone constituted 58 per cent of the total sales revenue gained by listed real estate firms.

Hence, VIC’s consolidated after-tax profit recorded at the end of 2017 mounted up to $186.6 million, up 74 per cent and exceeding the initially planned target by 81 per cent.

The ten most profitable real estate firms listed on the Vietnamese bourse in 2017
Ticker	Sales revenue	After-tax profit
(Vingroup)	3,970	186.6
NVL (NovaLand)	511.2	90.58
VRE (Vincom Retail)	242.5	88.61
DXG (Dat Xanh Group)	126.5	33
KBC (Kinh Bac Group)	55.33	25.7
NLG (Nam Long Group)	138.9	23.51
KDH (Khang Dien Housing)	144.3	22.28
PDR (Phat Dat Real Estate)	22.8	19.68
QCG (Quoc Cuong Gia Lai Group)	35.8	18.63
VPI (Van Phu Invest)	38.4	18.54

Source: Unaudited financial statements of ten listed real estate firms (Unit: million dollars)

A real estate market analyst from CBRE Vietnam asserted that the domestic real estate market, especially in Ho Chi Minh City, would most likely witness further impressive securities trading activities due to the healthy performance recorded in 2017, indicating willingness from domestic and foreign investors to inject capital into the market.

Another noteworthy real estate agent was NovaLand Group (HSC: NVL), which attained over $511.2 million worth of sales revenue and $90.58 million worth of after-tax profit, up 58 and 22.5 per cent against the same categories in 2016.

Despite being only recently listed on the Ho Chi Minh Stock Exchange (HSX), the VRE ticker of Vingroup’s retail arm, Vincom Retail acquired total sales revenue of over $240 million and after-tax profits of $88 million, asserting its position among the top three listed real estate firms in terms of sales revenue and profit.

Over the same period, the tickers of Phat Dat Real Estate Corporation and Kinh Bac City Development Holding Corporation also drew great attention on the stock market due to PDR’s $43.95-million urban land transfer deal and KBC’s $19.68-million transfer of The EverRich Infinity condominium development project.

In the first two months of this year, real estate is still one of the sectors attracting the largest volume of foreign direct investment (FDI) capital. Notably, according to statistics published by the Foreign Investment Agency (FIA), in January alone, foreign investors poured $77.6 million of the $1.255 billion total into the property sector.

According to Nguyen Hoang, director of the R&D Department of Danh Khoi A Chau Real Estate JSC, a large volume of FDI capital was poured into Vietnam in the early months of this year via M&A deals. This investment channel is picking up popularity as there are more co-operation deals between foreign investors who have the financial potential and experience and domestic enterprises that hold land plots and understand investment procedures.

This year, Vietnam will see the implementation of a series of projects which were bought via M&A deals. The first is Dai Phuoc Lotus in Ho Chi Minh City, which a giant real estate from China bought for millions of dollars from VinaLand Limited and VinaCapital Vietnam Opportunity Fund Limited in April 2017. The second is the Future Otis Hotel project in Nha Trang, acquired by P.H Group from Taiwan. The third is the apartment project in Ho Chi Minh City bought by CapitaLand in the fourth quarter of last year.

According to the expectations of real estate sector experts, this year, FDI inflows will converge on the housing and commercial real estate segment, especially Grade A office projects located in golden land plots. They will find “clear” land plots, which completed the site clearance and compensation and the existing investors holding certificates of land use right. Besides, foreign investors eye hotel projects.

However, according to a number of economists, local authorities should consider the feasibility and the stability of projects before deciding to approve them so that Vietnam will avoid massive investments without strategic planning, leading to long delays in implementation.

By Thi Tho

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