Real estate market's share growth stunted

Wednesday, May 04, 2016 15:51


Many real estate firms reported higher revenue and profits in 2015 and the first quarter 2016. — File Photo





HA NOI (Biz Hub) — While many real estate firms reported higher revenue and profits in 2015 and the first quarter, their share prices rose slowly or not at all in the local market.

According to the Real Estate Association of Viet Nam (VNREA), the liquidity of real estate firms at the end of March reached its highest in four years. data also showed that realty firms recorded VND61.7 trillion (US$2.8 billion) in revenue, an increase of 25 per cent over 2014, and a net income of about VND6.8 trillion, an increase of 12 per cent.

However, of the more than 50 stocks of real estate firms, less than 30 per cent saw growth in their prices within four months.


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Hoang Quan Group recorded profits that were 21 times higher than in 2015 thanks to the handover of HQC Plaza and HQC Hoc Mon, and about VND200 billion in funds from share transfers.

Truong Anh Tuan, chairman and CEO of HQC, said first quarter results were very positive, and estimated that revenue hit VND350 billion and profits reached 50 billion, up 40 per cent and 66 per cent, respectively, compared with the same period of 2015.

However, in the stock market, HQC shares have not seen any growth in prices since the beginning of the year, when shares traded at about VND5,600 each.

Similar to HQC, realty FLC Group was considered one of the most well-performing firms with little debt and a series of big projects all over the country, but FLC shares were traded at VND7,000 for a long time on the HCM Stock Exchange.

Sacomreal also reported a profit of VND176.5 billion in 2015, over six times higher than in 2014 thanks to the selling of the Celadon City project. But its shares traded at only VND9,000 each for the whole quarter.

Even worse, with a huge debt reported in 2015, HAG shares of the Hoang Anh Gia Lai Group fell to the lowest level in history at VND6,900 on April 15. It was a 70 per cent decrease from the same term last year. By the end of 2015, the group owed a debt of over VND27 trillion, an increase of 50 per cent over 2014.

Likewise, shares of Quoc Cuong Gia Lai JSC (QCG) fell to VND4,800 in April, as the firm was suffering from a large inventory worth VND5.4 trillion, accounting for more than 90 per cent of its short-term assets and liabilities of over VND1.8 trillion.

Huynh Anh Tuan, General Director of Securities Corporation, said the investors changed a lot. Now, they fear the listed firms that issue more shares for dividends. Instead, they wanted fresh cash dividends.

Most securities experts said investors tend to prefer basic investment in firms with stable profits as opposed to temporary investment in firms with upside-down profits.

While shares of many realty firms were unable to grow well, some firms saw shares bounce back as their businesses and profits improved over the last two years. Currently, Khang Dien House Investment and Trading (KDH) shares were traded at about VND23,500. Shares of Binh Chanh Investment Construction JSC (BCI) and Dream House Investment JSC (DRH) were traded around VND24,300 and VND34,000 each, respectively.

Andy Ho, Managing Director of VinaCapital, told local media that realty shares had good growth potential, and thus the VOF fund, managed by VinaCapital, would focus on shares of reputable firms. As of the latest report on April 13, the fund has 7 per cent in Khang Dien House.

In mid-March, the Dragon Capital investment fund purchased a total of 8.2 million shares, or 7 per cent of stakes, of the Dat Xanh Group, in addition to 3.5 million shares, or 18 per cent of stakes, of Khang Dien House. — VNS

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