Billion-Dollar Contractor with Prime Hanoi Real Estate Up for Sale by SCIC Despite Poor Business Performance

According to the announcement, the auction of the entire lot of 38,529,750 shares (87.97% of the capital) will take place at HNX on October 24, 2025, with a starting price of 964.34 billion VND. This move comes as Viettronics, a trillion-VND contractor, continues to operate at a loss and faces challenges with several real estate projects.

Originally established as the Electronics Research Department under the Ministry of Machinery and Metallurgy in 1970, Viettronics has a long history of development before officially operating as a joint-stock company in 2007, with state capital managed by SCIC.

From its roots in electronics, VEC has expanded into various sectors, including energy, industrial and building electromechanics, medical electronics, and education. Notably, VEC is a familiar contractor in the electricity sector, having won 42 bids since 2017 with a total value exceeding 1,578 billion VND, primarily as a consortium partner in projects managed by the Project Management Units for Northern and Central Power Projects.

However, VEC’s current appeal to investors lies not in its core business but in its valuable land assets and real estate projects.

The allure of VEC for investors today centers on its prime land holdings in strategic locations. Viettronics and its subsidiaries currently manage and hold the rights to use several notable land plots, including 15 Tran Hung Dao (544.89 m²), 29F Hai Ba Trung (288 m²) in Hanoi, and 197 Nguyen Thi Minh Khai (425.52 m²) in Ho Chi Minh City.

Additionally, VEC owns a project at Lot 14-E5 in the Cau Giay New Urban Area (4,300 m²), where the company plans to collaborate with a member of the Thang Long Investment Group (TIG) to construct a mixed-use building. Meanwhile, the VTB Green Building project in Ho Chi Minh City (with an ongoing investment value of 9.33 billion VND) remains stalled due to unresolved legal issues.

This is not the first time SCIC has attempted to divest from Viettronics. In the past, SCIC has planned to sell its stake at least three times, all of which were unsuccessful, most recently in February 2023 due to a lack of investor registrations. The primary reasons are believed to be the high starting price relative to market value and the company’s lackluster financial performance.

The paradox of a “trillion-VND contractor with meager profits” is evident in VEC’s financial results. Despite securing large contracts, the parent company remains mired in losses. Specifically, the parent company’s after-tax profit has been consistently negative for years, recording losses of 6.27 billion VND in 2024 and 5.3 billion VND in 2023. This trend continued in the first half of 2025, with a loss of 3.04 billion VND. These figures starkly highlight the company’s poor business performance, even though the consolidated profit of the entire corporation remains positive.

Furthermore, VEC’s financial statements have received numerous exceptions from auditors, related to the failure to provision for approximately 63.6 billion VND in hard-to-recover receivables, 18.63 billion VND in obsolete inventory at the Viettronics Thu Duc subsidiary, and nearly 4.58 billion VND in idle fixed assets that have not been depreciated.

On the stock market, VEC shares have reacted positively to the divestment news. At the close of trading on September 26, 2025, VEC’s share price stood at 15,300 VND, up 7.75% from the reference price. However, this price remains significantly lower than the starting price for the upcoming auction, which is equivalent to approximately 25,028 VND per share.

With a more “attractive” starting price and the ongoing potential of its land assets, investors must carefully weigh the appeal of the real estate holdings against the risks posed by prolonged business losses and the critical issues raised by auditors.