Plus points converge to set up US investment breakthrough

May 30, 2022 | 14:13
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Kinh Bac City Development Holding Corporation (HSX: KBC) is welcoming new investment inflows, especially from the United States. Chairman Dang Thanh Tam talked with VIR’s Lam Phong about the potential of its upcoming operation.

How does KBC tap into the opportunities that arise from the US?

Plus points converge to set up US investment breakthrough
Chairman Dang Thanh Tam

Currently, businesses on the Vietnamese stock market are doing very well, which has attracted the interest of American investment funds, and KBC has signed contracts for high-tech investment projects.

We are the first company to bring Apple’s supplier Foxconn back to Vietnam since 2006, which has invested billions of US dollars so far. Foxconn has recently signed an agreement to expand its operations, indicating that Apple will expand its supply in Vietnam in the coming years. Vietnam has also signed an agreement with the US to develop its national security equipment factory in its territory.

Furthermore, we have also inked a deal with a US partner to co-develop a $5 billion project in the northern port city of Haiphong. The 200-hectare project will feature 1,000 hotel and resort rooms, 100 villas, and 1,000 high-end apartments.

What is the outlook for industrial real estate in Vietnam, and what are the business plans of KBC this year?

During my recent journey to the US, I discovered that US investors are very interested in Vietnam, and they will invest heavily in the country in the near future.

The first-quarter profits of both KBC and Saigontel have increased exponentially. We have started to exploit industrial zones (IZs), township areas, and social housing projects. Fortunately, the industrial real estate market is quite hot, attracting good investment. We have been granted permission to invest in three IZs embracing more than 2,000ha. Site clearance works have also been completed.

Overall, Vietnam’s stock market is performing quite well. The market fall is attributable to various issues. However, Vietnam has many favourable indicators, such as strong economic growth, attractive policies, and thriving foreign relations.

It is worth noting that Vietnam has strengthened partnerships with other countries, encouraging direct and indirect investment flows into the country. Meanwhile, international organisations estimate that Vietnam’s risk coefficient is decreasing, which is another advantage for the country.

What are the current overseas capital inflows into KBC?

We have just signed deals worth $8 billion. They are committed to making an investment within two years. Some projects in the fields of IZ and high-tech development have a combined investment value of $2.2 billion. Real estate and other projects are valued at over $5 billion.

There will be a major breakthrough in the investment inflows of the US into Vietnam in the next three years. A few billion US dollars is a lot of money for Vietnam, but this is nothing compared to the scale of the American investment funds with trillions of US dollars under management. Despite this good news, there is no positive impact on the local stock market due to the current sentiment of investors.

I consider taking advantage of this opportunity to acquire more stocks to increase my ownership. However, I’m afraid that if the stock rises in value, people will accuse me of taking advantage of the bear market. Thus, I haven’t signed up to buy more stocks, despite my strong desire to do so. If the market does not improve in the very near future, I will register to buy in significant quantities.

What is the status of your land fund and assets, and the outlook for your projects in the next few years?

Since the beginning of this year, we have been greenlit to fund an additional 1,500ha of land, which is expected to generate around $860 million in profits. The company has pursued all of these projects for five years. The company also boasts large land funds in different localities. Once we received the land funds from the government and authorities, we quickly implemented infrastructure projects to attract investors.

I suggest people should grab the opportunities amidst the upwards trend in the market. Investors have recently lost money due to the big drop in the stock market. However, there are still many opportunities for the Vietnamese market given the strong economic growth. In the first quarter, Vietnam posted a growth rate of 5.03 per cent, and it is predicted by some that the economy will achieve a growth rate of 7-8 per cent this year.

By Lam Phong

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