Hodeco’s 2024 annual general meeting of shareholders was held on the morning of May 2 in Vung Tau city. Photo: Tu Kinh
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Highways and provincial roads to provide a “boost”
After the first attempt was unsuccessful, on the morning of May 2, Housing Development Corporation Ba Ria – Vung Tau (Hodeco, HOSE: HDC) successfully held its second annual general meeting of shareholders for 2024 with 36% attendance by shareholders, which was higher than the required 33%.
Speaking at the meeting, CEO Le Viet Lien stated that the real estate market in Ba Ria – Vung Tau province has begun to show signs of recovery, although it may take some years for the market to fully bounce back.
HDC is optimistic that the government’s efforts in 2024, including policies like interest rate reductions, will help to stabilize the economy, which in turn will boost investor confidence in the real estate market.
The company believes that public investment will be a key factor in driving market growth. In Ba Ria – Vung Tau, the Bien Hoa – Vung Tau Expressway, provincial road 994 connecting to Binh Thuan, and other roads planned within the province are currently under construction, which will create momentum for the real estate market.
Vung Tau city’s 1/2000 zoning plans have mostly been approved for all functional areas. HDC has already acquired land, which will enable it to capitalize on the upcoming growth of the real estate market in general and in Ba Ria – Vung Tau in particular.
However, the management is also concerned about complex and unpredictable factors that could potentially affect the company’s business performance this year, such as geopolitical instability, ongoing difficulties with government policies and regulations, and a lack of confidence among investors in the market. Access to capital will also be a challenge for real estate companies in 2024.
Another challenge that has persisted for 4.5 years is the fact that HDC has been requesting permission from the relevant authorities to deduct land use fees when acquiring land use rights to develop projects after obtaining permission to change the purpose of the land to public or transportation use.
According to Mr. Lien, due to differing views among law enforcement agencies, the company has not been able to make these deductions. In order to keep its projects running, HDC has had to pay the full amount, especially for the The Light City project. The amount that HDC has paid in this manner is approximately 200 billion VND. The residential area project number 2, located to the west of Road 3/2, has also encountered a similar issue.
“Even though agencies such as the Ministry of Finance have met with us and confirmed that we are entitled to these deductions, we have still encountered difficulties when attempting to obtain specific answers because there are inconsistencies in the laws”, the management explains. They anticipate that these deduction issues will be resolved this year.
The Light City remains a key project
This year, HDC will continue to prioritize land clearance, infrastructure development, and other tasks in its ongoing projects, including the complex issue of interspersed land allocation.
According to the CEO, although administrative procedures have been streamlined and improved, the overall process for projects remains complex and time-consuming, such as obtaining feedback from various departments and agencies.
The Hai Dang residential area (The Light City) remains a key project. In 2024, HDC plans to complete the second and third purpose changes for phase 1 of the project; apply for a third sales permit for the remaining townhouses and villas in phase 1 of the project; complete the adjustment of the progress of phase 1; complete the approval of the investment plan for phase 2; and acquire an additional 5 hectares. The company will also continue to handover houses to customers in blocks LK4, 5, 7, and 9.
Perspective of The Light City project. Source: HDC
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In the Ngoc Tuoc II Villa area, HDC will complete the adjustment of the 1/500 zoning plan and resolve the issue of land encroachment. This is a project that Mr. Lien describes as being quite unique and in high demand.
“For this project, the Vung Tau City People’s Committee recently issued a decision to enforce against an individual, involving an area of approximately 4,000m2. However, just as we were preparing to enforce the decision, we received a court order demanding that we halt the process”, said the CEO, highlighting the difficulties faced by the company despite the project being allocated land by the government and receiving strong support from government agencies.
The Antares Ocean Resort project has largely completed all legal procedures. The next steps will involve the procedures for separating and transferring a portion of the project, as well as applying for building permits and commencing construction of infrastructure and buildings, including condotels and other facilities. The management of HDC believes that this project has a very favorable location and will require an investment of nearly 10,000 billion VND.
Regarding the residential area project number 2, located to the west of Road 3/2, the company is currently resolving the adjustment of the 1/500 zoning plan due to changes in the city’s drainage line. HDC will finalize the settlement of land use fees for deductions and land swaps for infrastructure, and will also acquire an additional 1 hectare.
The Ecotown Phu My project is expected to complete the application for a building permit and start construction of social housing apartments (NOXH) CC1 and CC2; complete the land acquisition for the continuation and connection of Road 81; complete the application for the allocation and lease of interspersed land within the project; change the land use purpose after the provincial People’s Committee approves the adjustment of the 1/500 zoning plan; purchase the remaining land for the CC1 apartments; and handover houses to customers in blocks LK3, LK4, LK5, LK6, LK7, and LK9 (204 units).
A major project for HDC is the Phuoc Thang urban area. In March of this year, the provincial People’s Committee issued a document allowing the company to receive capital contributions and acquire land use rights for this project, and to date, 10 hectares have been acquired. This year, the CEO stated that the company will prepare a sum of money to continue acquiring more land.
In 2024, the Tran Phu Villa, Hodeco Seavillage, and Hodeco Phu My projects will continue their investment preparation activities. For these smaller projects, HDC intends to complete the necessary procedures and potentially transfer them to partners as appropriate, in order to focus its resources on larger projects.
At the meeting, Mr. Lien also discussed projects in Long Dien and Hodeco Co May. The project in Long Dien has signed contracts to acquire over 30 hectares, with a total planned scale of 50 hectares, while Hodeco Co May has acquired 18.6 hectares. HDC is currently in the process of applying for permission to receive capital contributions and acquire land use rights, and the application is being reviewed by the province.
2024 targets grow exponentially, plans to issue 1,000 billion VND in bonds
This year, the real estate company headquartered in Vung Tau city plans to invest 2.8 trillion VND, which is seven times more than the amount invested in 2023. Revenue and profit targets will also increase exponentially compared to last year.
Revenue is expected to reach 1.6 trillion VND, a 2.5x increase, and after-tax profit is expected to reach 424 billion VND, a 3x increase. Dividend rate is 15%, the same as in 2023.
| Revenue and net income of HDC over a 10 year period |
