Coteccons’ Backlog Value Expected to Reach VND 20 Trillion
At the dialogue with shareholders on September 18, Mr. Bolat Duisenov assessed that CTD are “dreamers”, but their dream is to positively impact the construction industry and strive to be recognized as Industry Leaders. They aim to upgrade the entire Vietnamese construction industry, not just focus on revenue and profit at all costs.
Chasing revenue and profit might inadvertently create negative impacts on the industry. As an Industry Leader, Coteccons doesn’t chase numbers but fulfills its missions and takes responsibility towards its customers, the industry, and society.
Moreover, to be an Industry Leader, Coteccons must be a pioneer, always initiating new trends, proposing new hypotheses and solutions, and seizing new opportunities. However, initiatives might not always succeed 100%, and as an Industry Leader, Coteccons has to accept this risk.
“Some people consider Coteccons as an eccentric, always going against the crowd. If Coteccons does something successfully, people will call it a strong company; otherwise, they will call us dreamers,” said Mr. Bolat.
When Coteccons succeeds, many companies will follow suit, which is good because their ultimate goal is to elevate the standards of Vietnam’s construction industry.
“For those who want to follow and emulate us, Coteccons also wants them to succeed, not just follow a temporary trend,” Mr. Bolat added.
Mr. Vo Hoang Lam, CEO of CTD, assessed that the real estate market would remain stagnant in 2024 due to various obstacles. However, the company’s financial results for the 2024 fiscal year (from July 1, 2023, to June 30, 2024) were positive due to diverse revenue sources. Over 50% of the production value came from the industrial sector related to FDI, and the remaining from the real estate group and repeat sales in the construction group.
Coteccons’ leadership also revealed that the company’s backlog value is expected to reach VND 30 trillion in the coming years, with approximately VND 20 trillion in 2025. In terms of revenue structure, the industrial sector accounts for 50%, civil construction 45%, and the remaining 5% is from the tourism and resort sector.
Coteccons’ leadership at the dialogue with shareholders.
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Focus on Public Investment and Infrastructure Sector
Coteccons’ CEO shared that the company has implemented infrastructure projects in large residential areas in Nhon Trach (Dong Nai) and Long An. Additionally, they are working on an inter-provincial road connecting Ho Chi Minh City and Long An and significant industrial infrastructure projects, such as the Lego factory.
Mr. Lam acknowledged that this sector is developing slowly. However, Coteccons is researching public investment projects, including headquarters, commercial offices; transportation projects such as inter-provincial expressways, metro projects, and the North-South railway; social housing projects, waste treatment plants, and many other projects related to heavy industrial infrastructure.
Therefore, compiling all the public investment and infrastructure projects will result in a considerable workload. Still, the company needs to ensure quality and proper implementation methods.
For this sector, Coteccons’ leadership will prioritize project selection, followed by partner selection and participation methods. In the future, the contribution of the public investment and infrastructure sector to the company’s revenue is expected to increase rapidly and occupy a large part of the business plan in the coming years.
Mr. Vo Hoang Lam – Coteccons’ CEO at the dialogue.
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What are the Plans for Overseas Expansion?
CTD’s leadership shared that Coteccons’ overseas expansion strategy has been implemented in recent years, and in the 2024 fiscal year, some investors wanted CTD to execute projects abroad. The company is also working on a VinFast project in India and bidding for several foreign projects with significant potential, and the results will be known soon.
However, the company will face challenges regarding cultural differences, language barriers, geography, and other conditions.
Expanding on this, Chairman Bolat mentioned that they have already undertaken some construction activities in several countries, but the revenue from overseas projects is still modest, and it will take about 1-3 years to integrate properly.
“Opening a branch overseas is just a legal procedure. Our clients are global corporations satisfied with our construction quality, and they are expanding their plans to other countries and inviting us to join them. We will follow our customers and put them at the center of our operations”, emphasized Mr. Bolat.
Due to the recent planning, in the 2024 fiscal year, 99% of the company’s revenue came from the domestic market. In the 2025 fiscal year (from July 1, 2024, to June 30, 2025), they are cautiously proceeding with activities abroad.
In the future, the company will open offices overseas, explore options, and make decisions regarding joint ventures with local companies or multinational corporations. They might also consider M&A with local companies.
Confident in Recovering Most of the Bad Debts
Regarding bad debts, Mr. Bolat affirmed that Coteccons is handling this matter seriously and with strict control. All bad debts have been provisioned, and the company has a risk analysis and management team that regularly updates bad debt information.
“Making provisions for bad debts is not the worst thing, nor is it overly negative. Provisioning does not mean we will forget about the debt or give up on collecting it. Instead, it is an essential aspect of the company’s risk and financial management. We have a team monitoring this issue to recover these debts, and we are confident that most of these provisioned amounts will be retrieved”, Mr. Bolat clarified.
In the future, Coteccons believes that with a large customer base, the risks and bad debts will decrease. Currently, 90% of the provisions come from projects before the COVID-19 pandemic, and 70% of the provisioned value comes from projects completed since 2017. Therefore, the assessment that Coteccons’ bad debts are increasing is inaccurate, and the chairman affirmed that 2025 would be the best year in the last five years.
In the Q4 2024 financial statements, CTD has made provisions for short-term uncollectible accounts receivable of more than VND 1,355 billion. According to Coteccons’ leadership, the company’s debt indicators are positive, and future projects look promising. They have received credit support offers from many large banks but have not utilized them yet. Additionally, they aim to maintain a cash balance of VND 3.8-4 trillion.
Coteccons is also leveraging technology to improve operational efficiency and has achieved a much higher bid-win rate than before, with a high rate of returning customers.
Regarding the revenue contribution of Coteccons’ employees, it stands at VND 14-15 billion/person/year, which is a commendable figure compared to the industry average, according to CTD’s leadership.
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