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CKG Annual General Meeting 2024 was held in the afternoon of June 1st in Kien Giang. Photo: Tu Kinh
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5 Key Projects for 2024 and 2025
At the 2024 Annual General Meeting held on June 1st, General Director of CKG, Pham Thi Nhu Phuong, shared that the company expects a positive impact from the upcoming implementation of three laws related to the real estate market. These include allowing overseas Vietnamese to purchase properties in Vietnam and more flexible regulations on property valuation.
Regarding social housing projects, Ms. Phuong mentioned that there may not be a need for valuation anymore.
Additionally, Kien Giang province has recently announced its socio-economic development plan for the period of 2021-2030, with a vision towards 2050. The province has also finalized the master plan for Phu Quoc city. “With these necessary conditions in place, we can confidently predict that the market will recover quickly by the end of 2024 and the beginning of 2025,” said the General Director of CKG.
This year, CKG plans to introduce projects that have already completed the basic investment preparation procedures. In Rach Gia city, these include the Central Market for Agricultural and Aquatic Products and Commercial Center project, the Residential Area along Road No. 2 in Vinh Quang ward project, and the Northern Vinh Quang Residential Area project (phase 1 and 2).
In Phu Quoc, the company will continue sales for the high-end villa project Phu Quoc Riverside Villas (commercial name Rivera Villas) and the high-end Bung Goi villa project in Cuu Duong commune.
The Board of Directors and the Management Board agreed to turn the clean land funds into valuable land by completing all legal procedures and paying the required fees, such as land use purpose conversion fees and land use fees. This way, when the market recovers, they will be ready for sale and revenue recognition.
In 2023, CKG paid the land use fee for the Road No. 2 project, which covers an area of about 10 hectares. The Central Market for Agricultural and Aquatic Products and Northern Vinh Quang 3 projects are also in the process of valuation, and the land use fee is expected to be paid in the third quarter of this year.
For the two Phu Quoc projects, Bung Goi and Rivera Villa, the company has completed the land use purpose conversion and is ready for sale. Thus, the three projects in Rach Gia and the two projects in Phu Quoc are CKG’s key projects for 2024 and 2025, and they all meet the necessary conditions.
Adjusting “Room” to Welcome Foreign Shareholders
In the past, many foreign investment funds have shown interest in CKG, but due to restrictions on foreign ownership, no agreement has been reached, according to Ms. Phuong.
To reduce these restrictions, the meeting approved the adjustment and modification of certain business lines that limit foreign ownership. This will increase the foreign ownership limit from 0% to 49%, paving the way for foreign investors, especially funds from Japan and South Korea, who are interested in CKG shares.
The Chairman of CKG, Tran Tho Thang, stated that foreign shareholders can bring added value and more stability to the company’s operations. However, the Board of Directors will carefully calculate the amount of additional shares to be issued, and it may not necessarily reach the 49% limit as registered.
After two unsuccessful attempts last year, this year’s meeting approved the unapproved documents from the previous meeting, including the 2022 business results and the 2023 targets.
At this year’s meeting, CKG also accepted the resignation of four Board of Directors members (including two independent members) and one Supervisory Board member for the 2021-2026 term. The new members proposed by the group of shareholders holding more than 5% of the capital were all approved by the meeting.
Specifically, the new Board of Directors members are Mr. Dinh Thanh Tam (born in 1979), Mr. Dinh Thanh Thao (born in 1964), and Mr. Tran Van Vinh. The new Supervisory Board member is Mr. Vo Van Y (born in 1994). These individuals were nominated by the group of shareholders holding more than 5% of the capital and currently do not own any CKG shares or hold any positions in the company.
Mr. Nguyen Xuan Dung (born in 1980), a major shareholder who purchased and owned 9.6% of CKG capital last year, nominated himself to the Board of Directors and was also approved.
According to Mr. Thang, the personnel changes made at this meeting have prepared the company to achieve important upcoming goals.
Raising an Additional VND 500 Billion from Shares to Repay Bank and Bond Debts
The real estate sector is expected to contribute 95% of CKG’s revenue in 2024. However, the company forecasts that the market will remain sluggish in the coming months. Therefore, to clear inventory, recover capital, and reduce maintenance costs, the company will implement promotional programs and offer discounts, resulting in a expected decrease in profit margins for commercial housing units compared to the same period last year.
This year, CKG has set a revenue target based on the financial statements of the parent company. However, the difference between the consolidated and parent company figures last year was insignificant, with a difference of only VND 100 billion.
Accordingly, the company aims to achieve VND 1,200 billion in revenue, unchanged from 2023, and VND 142 billion in post-tax profit, a slight decrease of 4%. In the first quarter of 2024, CKG recorded revenue of VND 281 billion, an improvement of 12% over the same period last year. Net profit exceeded VND 29 billion, an increase of 23%.
CKG’s subsidiary, CIC Kien Giang Construction Joint Stock Company (in which CKG holds 51% of the capital), will continue to be the main revenue driver, with an expected revenue of VND 359 billion, a 14% increase compared to the previous year. The next contributors are CIC Thang Anh Building Materials Joint Stock Company (in which CKG holds 72.2% of the capital) and Kien Giang Urban Development Joint Stock Company (in which CKG holds 35.2% of the capital), with targets of VND 203 billion and VND 124 billion, respectively, which are almost unchanged from last year.
| CKG’s Business Performance from 2006 to Present |
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CKG will restructure two member companies, CIC Education Company Limited and CIC Kien Giang Trading Services Company Limited, while focusing on completing the dissolution procedures for Phu Quoc Infrastructure Development Joint Stock Company. For CIC Phu Quoc Construction Investment Joint Stock Company, CKG will concentrate on finalizing the legal procedures for land retrieval and adjusting the planning of the Bai Vong project, which covers an area of 34 hectares.
In the past, CKG was unable to issue over 13.4 million private placement shares to increase its charter capital for professional securities investors due to a lack of approval, resulting in a shortage of capital.
Instead, at this year’s meeting, the issuance of 19 million shares as dividends was approved, equivalent to a ratio of 20% of the existing shares (for every 10 shares held, shareholders will receive 2 new shares) from the after-tax profit source not yet distributed up to the end of 2023.
Additionally, CKG plans to raise additional capital from shareholders by issuing new shares equivalent to 50% of the currently circulating shares (excluding the shares issued as dividends). Accordingly, shareholders will receive one right for every share owned, and for every two rights, they will be able to purchase one new share. These newly issued shares will not be restricted from transfer. With an expected price of VND 10,500 per share (half of the market price), CKG is expected to raise approximately VND 500 billion from this issuance.
Mr. Thang stated that about VND 105 billion of the raised capital will be used to repay bank loans due from the fourth quarter of 2024 to the first quarter of 2025, accounting for 21% of the total amount. Additionally, VND 350 billion (70%) will be used to partially repay bonds due before December 31, 2024, and nearly VND 45 billion will be used to supplement other working capital needs, such as paying construction debts, purchasing raw materials, and paying employee salaries, from the fourth quarter of this year to the first quarter of next year.
According to the General Director, the majority of the funds raised in this issuance will only be used to supplement working capital and not for medium or long-term projects. Therefore, the sources of funds for the above payments will be redirected to invest in key projects, focusing on marketing to generate revenue and profits this year and next year without reducing indicators such as ROE and ROA.
