The Ultimate Hotel Haven: Hoang Anh Gia Lai’s Final Venture with Muong Thanh Group

In a recent transaction, Hoang Anh Gia Lai Group (HAGL) sold one of their final remaining real estate assets, marking a notable event in the industry. Strategically located in the heart of the city, the Hoang Anh Gia Lai Hotel stands as the only 4-star hotel in Gia Lai, boasting 117 rooms across three categories: Suite, Deluxe, and Superior. Many rooms offer breathtaking views of the surrounding mountains and valleys.

In October 2023, HAGL attracted attention by announcing the sale of the Hoang Anh Gia Lai Hotel to a single entity, with the purpose of repaying debts to BIDV Bank. This transaction resulted in a recorded liquidation profit of VND 180 billion for HAGL in September 2023.

The buyer at the time was Hoàn Sinh Gia Lai Investment Company, a recently established company with a charter capital of VND 200 billion. Their primary business focuses on livestock farming, including buffalo and pig breeding, and they also have a presence in the sports club industry. The company’s headquarters are currently located on 3/2 Street, Ward 10, Ho Chi Minh City.

It is worth noting that this is not the first time the Mường Thanh Group has acquired real estate from HAGL. In 2019, they purchased the Hoang Anh Gia Lai Danang Hotel, renaming it Mường Thanh Luxury Song Han. This 23-story hotel, located in the heart of Danang, offers 206 fully equipped rooms and is a symbol of the city’s hospitality industry.

The above image depicts the Hoang Anh Gia Lai Danang Hotel, previously sold by HAGL to the Mường Thanh Group.

HAGL, on the other hand, has been utilizing investments from LPBank, LPBank Securities, ThaiGroup, and related parties to focus on developing sustainable and eco-friendly agricultural projects. Their recently published financial statements for the second quarter of 2024 show a 5% year-on-year increase in net revenue, totaling VND 1,518 billion. Net profit reached VND 281 billion, a 3.4-fold increase compared to the previous year. For the first six months of 2024, HAGL reported a 12% year-on-year decrease in revenue, amounting to VND 2,759 billion, while net profit increased by 32%, reaching VND 507 billion.

HAGL has successfully completed a private placement of shares, raising VND 1,300 billion and increasing its charter capital to VND 10,574 billion. With these funds, the company has repaid the principal and interest on a VND 300 billion bond issue from June 18, 2012, which matured on September 30, 2025, and restructured its subsidiary’s debts, reducing borrowing costs.

As a result, HAGL has narrowed its accumulated loss to VND 904 billion as of June 30, 2024.

For the full year 2024, HAGL aims to achieve a record-high revenue of VND 7,750 billion, representing a 20% increase from 2023. Their net profit target is set at VND 1,320 billion, a 26% decrease from the previous year. Thus, after the first six months, the company has achieved 36% of its revenue target and 38% of its net profit target.

If HAGL accomplishes these goals, 2024 will mark the third consecutive year of achieving a net profit of over VND 1,000 billion, contributing to the reduction of accumulated losses. The company’s chairman, Mr. Đoàn Nguyên Đức, has shared with shareholders on multiple occasions that eliminating the accumulated loss is a personal goal of his.

“Many large funds have told me that if HAGL can eliminate the accumulated loss, they will invest in us. We haven’t included this in our plan, but we are determined to make it happen by the end of this year through various means, as a net profit of VND 1,300 billion won’t be enough to erase the loss,” Mr. Đức stated.