Update
On the morning of April 20th, Nam Long Investment Corporation (HOSE: NLG) held its 2024 Annual General Meeting of Shareholders to approve a target revenue of double the previous year and a pre-sales turnover of approximately VND 9,554 billion.
 The 2024 Annual General Meeting of Shareholders of NLG was held on the morning of April 20, 2024, with 61.78% of the total number of voting shares participating. Photo: Thuong Ngoc
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Three challenges for 2024
Chairman of NLG, Nguyen Xuan Quang, assessed that NLG will face a number of challenges in 2024. The first is a crisis of confidence, which will lead to a decrease in liquidity and an increase in inventory. Second is the financial challenge as debts remain and bond lots, although extended, will still linger in 2024-2025. Third is the legal challenge of the project, as it is currently still slow, and some laws are still overlapping.
However, according to Mr. Quang, the real estate market also has many opportunities. First, Vietnam is a developing country, and the Vietnamese economy is growing very rapidly, so there is still a great demand for real estate. Second, the lending interest rate has decreased and is still lower than before COVID-19, making it very attractive. Third, with the revision of the Land Law, the Housing Law, and the Real Estate Business Law, the situation of overlapping regulations will be improved.
NLG has determined that the market in 2024 will be a product market, and the company will only sell what the market needs, although the company will still face common difficulties such as inventory and overdue debts.
The company’s management believes that NLG has the advantage of not only relying on revenue and profit from the housing development segment, but also the land development and commercial real estate segment. These segments will drive NLG in the years to come.
In terms of finance, the company will prioritize maintaining a stable financial situation, prioritizing money in segments that match the market, and avoiding putting money in segments that are not selling well. In addition, the company aims to manage loans reasonably and efficiently, and diversify capital sources.
In terms of project legality, the company is building a high-capacity team to unlock the legal issues of key projects (Izumi, Paragon, VCD phase 2).
On the other hand, in order to realize its 2030 vision, NLG will prioritize completing 3 key strategies: investment and investment management strategy; overall financial strategy (including capital mobilization strategy); group M&A strategy, growth model/formula.
Mr. Quang assessed that the business results in 2023 were not as expected, although the company made a lot of effort. NLG‘s highlights in 2023 were realizing the Dragon Growth Transformation growth strategy; building business models and budgetary standards according to international and Vietnamese standards to allocate capital to the Group’s core companies; maintaining a solid financial structure, steadfastly building financial indicators, especially current payment and quick payment ratios.
Regarding projects, last year NLG invested over 300 billion VND to pay for land use for a 43-hectare project in Can Tho.
In 2023, NLG launched the “Bring a Home Back to Easy Ownership” sales campaign with two criteria. Firstly, to make NLG products the most affordable; secondly, to provide NLG residents with the most affordable amenities. This campaign has been supported by society and customers, thus boosting sales in the latter part of the year.
The company also applied the integrated urban area model by approving NLG‘s service standards, which must be available in projects such as schools, hospitals, convenience stores, sports facilities, etc.
Dividend payment for 2023 in cash at a rate of 5%
NLG plans to pay dividends for 2023 in cash in the second quarter of 2024. The total amount of money used for this purpose is more than VND 192 billion. With nearly 385 million shares outstanding, it is estimated that each NLG shareholder will receive VND 500, equivalent to a rate of 5%.
For 2024, the company plans to pay dividends in cash at a rate of 5%. However, if net income is higher than 30% compared to the plan, this rate will increase gradually and up to a maximum of 10% of par value. Depending on the business situation, the 2024 dividend may be provisionally paid 50% in December 2024 and the remainder in 2025. The specific rate will be decided at the 2025 Annual General Meeting of Shareholders.
In addition to shareholders, NLG also proposes to issue 446,276 shares under the long-term incentive policy for senior leaders and managers (abbreviated as the ESG program). Shares will be restricted from transfer for one year after issuance.
In addition, the company also plans to purchase liability insurance for members of the Board of Directors in 2024 with a premium of USD 20,900, a coverage limit of USD 10 million, and a term from July 31, 2024 to July 30, 2025.
2024 revenue target doubled from previous year
In 2024, NLG sets revenue and net profit targets of VND 6,657 billion and VND 506 billion, respectively, double the revenue but only 5% increase in profit.
NLG said that its 2024 revenue will mainly come from: recognizing revenue from the handover of key projects (Akari, Can Tho, Ehome S Can Tho, EhomeS MR1, Izumi, Southgate); providing project management and sales services for joint venture companies; selling commercial properties in projects. The company estimates that the pre-sales revenue for 2024 will reach approximately VND 9,554 billion.
The Board of Directors of NLG assessed that the real estate market in 2024 will face both challenges and opportunities. The challenges of the market include the mismatch between supply and demand for different real estate segments; crisis of confidence; high inventory; potential financial risks and debt crises; delayed project legality.
However, the market still has many opportunities for businesses as the demand for real estate is still high (affordable segment and social housing); lending interest rates have decreased; many new laws have been issued (Land Law, Housing Law, Real Estate Business Law); The Government is interested in removing obstacles and promoting a sustainable real estate market.
In this context, NLG has outlined a number of operating strategies for 2024 based on various orientations.
First, in terms of market and products, the company will focus on developing affordable housing products that meet market demand; promoting sales policies; focusing on handling inventory, overdue debts, and contract cancellations by customers; promoting pre-sales; generating revenue and profit in segments other than residential real estate, such as sale of capital, project sub-division, commercial real estate, etc.
In terms of finance, NLG aims to balance its capital structure, maintain a healthy financial structure; balance cash flow, focus on project development funding; ensure loan safety; and diversify capital sources.
Regarding project legality, the company will focus on unlocking the legal issues of key projects such as Izumi, Paragon, and VCD phase 2.
“Positive signs show that the market is coming back”
DISCUSSION
What was the Company’s pre-sale value at the end of 2023?
NLG Representative: The total pre-sale value at the end of 2023 was nearly
