DXG Corporation (DXG) has recently released its audited consolidated financial report for 2023, revealing some important events of DXG in the past year. Notably, on October 5, 2023, the Corporation completed the transfer of all shares in DBFS JSC for a sale price of just over 1.4 billion VND. However, the transaction resulted in a profit of up to 14 billion VND, which is 10 times higher than the sale price.
Formerly known as DXG E&C JSC, DBFS JSC was established on March 9, 2021, with an initial charter capital of 200 billion VND. DXG Corporation held 80% of the capital, Mr. Luong Tri Thin – Chairman of DXG held 18%, and Mr. Le Hao – General Director of DXG E&C held the remaining 2%.
By May 25, 2023, DBFS had reduced its charter capital to over 1.76 billion VND and then increased it back to 200 billion VND on December 12, 2023, after being sold by DXG.
Prior to the name change, DXG E&C was introduced by DXG as “the next piece in the new strategic direction and the first brick in the construction industry” of the corporation. It was the first company in Vietnam to provide real estate development solutions and turnkey construction services with the DBFS model (Development – Build – Finance – Sales and Marketing).
According to the introduction on the website, DBFS is the first unit to follow the project development service model and turnkey construction in Vietnam, fulfilling the mission of becoming a strong bridge to corporations and individuals owning legal land funds in developing housing projects for the community in Vietnam.
DBFS targets customers who own “clean” land funds but have limited capital, no organizational development management system, and no distribution system for their products. DBFS will take care of most of the project development process in all stages: market research, product research, construction design, legal procedures, marketing and sales, product handover, customer care, and project financing.
The company also asserts that “This is the unique model that is expected to bring outstanding profits to partners, and helps organizations and individuals owning “clean” land funds quickly become professional real estate investors without much experience, without requiring a large management system but still ensuring the highest probability of project success.”
Meanwhile, DBFS has the opportunity to increase its market share by continuously supplying products to the business system.
The company has been involved in the development of several projects such as Gem Sky World (Dong Nai), Luxcity (District 7), Opal Boulevard (Binh Duong), Opal Skyline (Binh Duong), ST Moritz (Thu Duc District), Opal Garden (Thu Duc District).
Gem Sky World project
In comparison to the separate financial report, the business results of DXG Corporation in the audited report did not change significantly compared to the fourth quarter financial report released earlier. Specifically, in 2023, DXG’s net revenue reached 3,725 billion VND, down 32% compared to the same period, and after-tax profit reached 150 billion VND, a decrease of 72%.
DXG stated that the sharp decrease in profit in 2023 was due to the general market impact, and the recovery of the real estate service sector in the fourth quarter of 2023 was not enough to offset the whole year of 2023.
In addition to the sale of DBFS by DXG, some subsidiaries of the Corporation also had transfer transactions. On June 26, 2023, Hoi An Invest JSC, a subsidiary of DXG, completed the transfer of 99.9% of shares in Saigon Riverview JSC for a transfer price of 650 billion VND, resulting in a profit of 315 billion VND. On December 28, 2023, Ha An JSC, another subsidiary of DXG, completed the transfer of the entire shares in FBV JSC for a transfer price of 92 billion VND, resulting in a profit of 167 million VND.
The profit from these transfers was recorded as financial operating revenue. In 2023, the financial operating revenue of DXG reached 409 billion VND, a decrease of 12% compared to 2022.
