Real Estate
Phuc Hung Holdings’ Annual General Meeting: Entry into Social Housing
By Mai Huong • April 19, 2024 at 10:20 p.m.
At the 2024 Annual General Meeting of Shareholders (AGM) of Phuc Hung Holdings Construction JSC (PHC), the management announced that the company had won a bid for a social housing project in Dong Nai and was open to participating in the social housing fund in the future.
Winning Key National Projects in a Challenging Year
During the AGM, PHC’s management acknowledged the challenges faced by the construction and real estate industries in 2023. PHC’s revenue reached 1,727 billion VND, with after-tax profits of 10.1 billion VND.
In 2023, several major projects, such as the HH2 Gamuda project, remained stalled due to unresolved legal issues faced by the investor, delaying construction. Several large contracts, including the Package 5.10 contract for the construction and installation of equipment for the Long Thanh International Airport Passenger Terminal Phase 1 and the Imperial Oasis Quy Nhon package, were implemented and executed in late 2023, resulting in no revenue recognition. Additionally, real estate projects in Nghia Kim, Nghe An, and An Phu, Thai Binh, were not implemented, and the planned divestment in Phu Lam subsidiary was not realized. Bank loan interest expenses increased significantly in the first 9 months of the year (reaching 9.8% at one point), impacting the financial performance of several ongoing projects.
Despite facing fierce competition in the market, the company’s bidding and project acquisition efforts were successful. New contract values signed in 2023 amounted to 3,555 billion VND, representing 89% of the plan (4,000 billion VND) and 135% of 2022 (2,645 billion VND). Among these contracts were two national-level projects: Package 5.10 for the construction and installation of equipment for the Long Thanh International Airport Passenger Terminal Phase 1 and the Ho Chi Minh City Air Traffic Control Center.
The company will distribute a 5% cash dividend for 2023. In 2024, the company targets revenue of over 2,500 billion VND, profit of 45 billion VND, and new contract values of 3,000 billion VND.
Entry into Social Housing, Continued Pursuit of Old Apartment Renovation in Hanoi
Speaking to shareholders at the AGM, Chairman Cao Tung Lam announced that PHC would enter the social housing segment in 2024. PHC’s first project will be a social housing project in Nhon Trach district, Dong Nai province, comprising 14 nine-story buildings with a total floor area of 20.21 hectares. With the preferential policies offered to investors in social housing projects, Mr. Lam expressed confidence in facing limited competition and plans to utilize loan capital in the 2024-2026 period to develop the social housing fund. The company is optimistic about its success in social housing development, leveraging its experience in project investment, development, and construction management.
Mr. Cao Tung Lam, Chairman of Phuc Hung Holdings, speaking at the AGM.
Social housing will become a new segment in PHC’s real estate investment strategy, alongside its existing focus on industrial park development, urban areas, and real estate in towns and townships.
Additionally, PHC remains committed to pursuing the renovation of old apartments in Hanoi, despite facing three challenges: planning, population, and pricing. The company has been working on this for the past 6-7 years and is awaiting stronger support from regulatory authorities. Currently, Hanoi has approved a pilot program to renovate and rebuild 1-2 old apartment complexes during 2024-2025.
In the energy sector, the Nam Nua 2 Hydropower Project (in which PHC is an investor) is progressing according to plan and is expected to be completed and commence commercial operations in November 2024.
