Coteccons JSC (HOSE: CTD) has announced the completion of the acquisition of 100% of the contributed capital of Sinh Nam Metal Co., Ltd (Vietnam) and UG Vietnam M&E Co., Ltd (UG M&E). Both companies are foreign-owned enterprises that have participated in the infrastructure construction sector.
Previously, in December 2023, Coteccons approved the acquisition of 100% of the capital of a company operating in the mechanical and electrical (M&E) field, aiming to expand its operations and diversify and enhance the CTD brand in the market. However, the identity of the company and the value of the transaction have not been disclosed, but it is likely to be one of the two newly acquired enterprises.
Coteccons to acquire 100% capital of an M&E company
Although Coteccons has established its position in the civil and industrial construction segment, it has not made a significant impact in infrastructure construction, such as airports, transportation routes, and other public projects.
In early 2024, Coteccons revealed that it will enter the field of public investment and infrastructure. “Unlike commercial real estate, the backlog will progressively increase through projects. In the public investment and infrastructure sector, either we win with a large backlog, or we don’t win at all,” said a Coteccons representative.
In addition, social housing is another area that CTD is researching for early implementation using precast methods. Preliminary results are expected in 2024.
In the current challenging situation, Coteccons believes that diversifying revenue sources (rather than diversifying business sectors) while closely adhering to the core business (construction) is a safe strategy. “Diversifying business sectors goes beyond the core competencies and understanding of the enterprise, leading to risks in resource investment,” Coteccons commented.
* What to expect from the construction industry in 2024?
What do the two newly acquired enterprises bring?
UG M&E was established in May 2007 and specializes in mechanical and electrical (M&E) systems installation, with its headquarters in Thu Duc, Ho Chi Minh City.
According to the business registration information from December 2015, UG M&E has a charter capital of VND 6.4 billion, wholly owned by Greatearth Pte. Ltd (Singapore). Mr. Tai Chee Yick (Singaporean) holds the position of General Director. In February 2022, Mr. Lam Thanh Duc replaced Yick in the position.
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According to the website of Penta-Ocean Construction Co., Ltd, this company acquired all the shares of UG M&E Pte. Ltd. (Singapore) from Greatearth Pte. Ltd. (Singapore) – the parent company of UG M&E, at the beginning of 2020. Penta-Ocean Construction Co., Ltd. is a major construction company in Japan, founded in 1896, specializing in marine civil engineering, then expanding into civil engineering on land and other construction works. The company established an office in Singapore in 1964 and became the international business headquarters of Penta-Ocean. |
UG M&E’s parent company has completed major mechanical and electrical engineering projects for Singapore’s milestone projects such as ION Orchard, Marina Bay Sands, and Changi Airport’s Jewel.
On the other hand, Sinh Nam Metal (Vietnam) was established in June 2008, with its headquarters located in the Vietnam-Singapore Industrial Park, Binh Hoa Ward, Thuan An City, Binh Duong Province. Ms. Vu Hoai Thu holds the position of General Director and legal representative. The company specializes in designing facade aluminum systems, manufacturing, installation, and project management services for high-end projects.
According to the amendment of the business registration in March 2019, Sinh Nam Metal (Vietnam) has a charter capital of over VND 25 billion, with two shareholders: Kim Teck Industries Pte Ltd (Singapore) owning 50.24% and Kim Teck Corporation Pte Ltd (British Virgin Islands) holding 49.76% of the capital.
In March 2022, the company increased its charter capital to over VND 50 billion, and in November 2023, it further increased to VND 100 billion, with no changes in the shareholders’ structure.
According to the company’s introduction, Sinh Nam Metal has a 10,000m2 factory located in the VSIP Industrial Park – Binh Duong, with a capacity of producing 300m2 of windows and doors, 100-150m2 of aluminum facades, and 200-300m2 of panels per day. In addition to residential apartment and hotel projects, Sinh Nam Metal has also installed interior glass walls, doors, and spider glass systems for Noi Bai Airport.
Profits surged in Q2/2024
In Q2/2024 (from July 01, 2023, to June 30, 2024), CTD recorded VND 5.66 trillion in revenue, a decrease of more than 9% compared to the same period last year. However, its net profit increased by more than 69 billion, a 3.6-fold increase.
For the first half of 2024, CTD reported nearly VND 9.784 trillion in revenue, a 5% increase compared to last year. Its net profit reached nearly VND 136 billion, an 8.8-fold increase compared to the same period. By the end of Q2/2024, Coteccons achieved 55% of its annual revenue target and 50% of its after-tax profit target.
