Hung Thinh Land to go public
Hung Thinh Land to go public
Hung Thinh Land has just submitted a dossier to the State Securities Commission for its initial public offering (IPO). According to the plan, the real estate developer is expected to list on the Ho Chi Minh City Stock Exchange (HSX) in 2023.
In developed countries, the majority of businesses opt for the IPO route before starting operations or following a period of active operation in the market. However, for a long time in Vietnam, only companies with good financial capacity and business results are keen on going public.
In recent years, an IPO has become more appealing on the back of the strong growth of the stock market, prompting several businesses across different industries to promote this activity.
Selling shares and going public on the stock market allow businesses to raise funds more quickly than other capital mobilisation methods and if companies can post good business results, their shares will achieve high liquidity, thereby bringing a lot of added value in the long run.
According to the Securities Law, to file for IPO, businesses must have a minimum charter capital at the time of registration of around $427,000. In addition, business operations for two consecutive years immediately preceding the year of registration of the IPO must have been profitable and there must not be accumulated losses calculated up to the year of registration. Businesses must have an issue plan and a plan for utilisation of the proceeds earned from the IPO approved at the general meeting of shareholders.
Amidst the economic recovery, Hung Thinh Land, with a clear understanding of the market situation and confidence in its long-term strategy, has taken steps to implement the IPO roadmap and move toward listing on the stock exchange. The business has been careful to follow the proper roadmap in compliance with the regulations. The IPO is expected to facilitate Hung Thinh Land to develop new resources in the long term as well as increase transparency in its investment and business activities.
Before filing with the State Securities Commission, Hung Thinh Land recently completed an equity transaction worth $103 million with two major partners, Dragon Capital and VinaCapital. The deal paves the way for Hung Thinh Land to access the international capital market, laying the groundwork for long-term strategic orientations.
International consulting firms like McKinsey and well-known domestic and international partners are also helping the company set up and carry out its plan.
Healthy financial indicators
An analyst from securities firm SSI cited the company’s financial statement to show the strong potential and growth momentum of Hung Thinh Land as of December. Specifically, its revenue from sales and services reached $209 million, surging threefold on-year.
40 per cent of its 2021 revenue came mainly from the handover of more than 1,000 homes to customers amidst the multiple challenges facing the real estate market due to the pandemic. Hung Thinh Land made a staggering $72.6 million in after-tax profit in 2021, a four-fold rise on-year.
The firm kept its gross profit margin stable at 54 per cent, while its net profit margin stood at over 34 per cent. As a result, Hung Thinh Land is among the leading property companies in the market with high profit margins.
As of late 2021, the firm’s total assets amounted to $2.2 billion, a 2.5-fold on-year increase. The growth of its total assets is in line with Hung Thinh Group’s overall restructuring plan. Accordingly, Hung Thinh Group is transferring land sites for real estate development to Hung Thinh Land.
Inventory and construction in progress totalled roughly $709 million in value, much higher than in late 2020. The land fund owned by Hung Thinh Land comprises such projects as Lavita Thuan An in Binh Duong Province, Grand Center, Ghenh Rang, and MerryLand Quy Nhon in Binh Dinh province, and Truong Tho in Ho Chi Minh City.
In addition, short- and long-term accounts receivable reached $717.8 million, up 16 per cent on-year. The amount mainly came from deposits for investment cooperation, share purchases, capital contributions, or project transfers.
As of late 2021, the developer’s total equity amounted to over $653 million, a 2.3-fold increase. Meanwhile, its chartered capital jumped by 74 per cent on-year to $401.6 million.
In 2021, the real estate market was hit hard by the pandemic, so Hung Thinh Land has formulated solutions to transform its business methods and adopt flexible customer care policies to fulfil the mission of creating a safe place for the community and new value.
Hung Thinh Land has launched a variety of real estate products at reasonable prices with nearly 5,100 products with a total value of nearly $684 million.
In the first six months of the year, Hung Thinh Land is among the few companies with positive business performance, having rolled out over 2,000 homes worth more than $427 million. This year, the developer looks to book just over $448 million in revenue and $145.3 million in after-tax profit.
With good business results recorded amidst the post-pandemic economic recovery, the IPO of Hung Thinh Land is expected to be one of the most desirable deals in the real estate industry.
