VHM - 2024 earnings, presales beat forecasts, driven by Q4 bulk sales - Earnings Flash & Analyst Meeting Note
  • 2025-01-25T00:00:00
  • Company Research
  • VHM recorded strong growth in Q4 2024, with underlying property revenue (including business cooperation contracts (BCC) and bulk sales transactions recognized as financial income) of  VND44.5tn (USD1.7bn; +5.7x YoY) and NPAT-MI of VND11.5tn (USD452mn; +47% QoQ and +6.2x YoY), mainly driven by the recognition of retail and bulk sales at Royal Island and Ocean Park 3.  
  • For full-year 2024, VHM’s underlying property revenue was VND113tn (USD4.4bn; +1% YoY) and NPAT-MI was VND31.5tn (USD1.2bn; -6% YoY), both exceeding our forecasts by 15%, which we mainly attribute to Q4 2024 better-than-expected bulk sales recognition. Nevertheless, we foresee insignificant changes to our current 2025F NPAT-MI forecast (VND31.3tn/USD1.2bn), pending a fuller review.
  • Bulk sales at Ocean Park 3 contributed significantly to VHM’s Q4 2024 contracted sales value of VND14.3tn (USD562mn; -62% QoQ and -53% YoY). In 2024, VHM’s contracted sales value was VND103.9tn (USD4.1bn; +19% YoY), with the Royal Island contributing 55% and Ocean Park 3 contributing 19%. The YoY growth in 2024 was driven by higher retail presales largely attributed to the launch of the Royal Island project in March. As the 2024 result beat our forecast by 9%, we foresee upside potential to our current 2025F contracted sales forecast, pending a fuller review. 
  • 2025G contracted sales guidance: Per management, presales will be driven by expected new project launches, including Wonder Park (Hanoi), a project in Long An, and Duong Kinh (Hai Phong), along with continued presales at existing projects.
  • As of end-2024, VHM’s unbilled bookings amounted to VND94.2tn (USD3.7bn; -5.5% YoY) with bulk sales accounting for 54%. 
  • Progress of international bond issue plan (up to USD500mn; maximum 5 years; non-convertible and unsecured bonds): VHM has completed the necessary regulatory procedures and is currently in discussions with potential investors.

Figure 1: VHM’s 2024 results 

VND bn 

2023 

2024 

YoY 

2024F 

2024 as  
 % of 2024F 

Vietcap’s comments on 2024 results 

Net revenue 

103,557

102,045

-1%

95,640

107%

 

  • Residential sales 

89,669

73,203

-18%

68,614

107%

* VHM’s 2024 underlying property revenue (including BCC and bulk sales transactions recognized as financial income) amounted to VND113tn (USD4.4bn; +1% YoY), mainly from the Royal Island, Ocean Park 2 & 3 projects.

  • Leasing and other services 

13,888

28,842

108%

27,027

107%

* Mainly construction and leasing services. 

 

 

 

 

 

 

 

Gross profit 

35,707

32,425

-9%

32,597

99%

 

  • Residential sales 

33,793

28,838

-15%

29,551

98%

 

  • Leasing and other services 

1,914

3,587

87%

3,046

118%

 

 

 

 

 

 

 

 

SG&A expenses 

-7,756

-8,784

13%

-7,567

116%

 

EBIT 

27,951

23,641

-15%

25,030

94%

 

Financial income 

19,954

26,343

32%

17,903

147%

 

  • BCC income (*) 

1,226

19,209

1467%

11,811

163%

* Includes Royal Island’s 1) bulk sales recognitions in Q2 2024 and Q4 2024, and 2) retail handovers starting from Q3 2024. 

  • Other financial income 

18,729

7,134

-62%

6,092

117%

 * Recorded one bulk sales transaction at Ocean Park 3 in Q4 2024.

Financial expense 

-3,870

-8,629

123%

-7,688

112%

 

Other gain/loss 

-735

-497

N.M.

-200

N.M.

 

PBT 

43,310

40,860

-6%

35,045

117%

 

PAT 

33,533

35,052

5%

28,036

125%

 

NPAT-MI 

33,371

31,527

-6%

27,504

115%

* The 2024 earnings exceeded our forecast, mainly due to higher-than-expected Q4 2024 recognition of bulk sales.

 

 

 

 

 

 

 

Gross margin % 

34.5%

31.8%

 

34.1%

 

 

  • Residential sales 

37.7%

39.4%

 

43.1%

 

 

  • Leasing and other services 

13.8%

12.4%

 

11.3%

 

 

SG&A as % sales 

7.5%

8.6%

 

7.9%

 

 

EBIT margin % 

27.0%

23.2%

 

26.2%

 

 

Effective tax rate % 

22.6%

14.2%

 

20.0%

 

 

NPAT-MI margin % 

32.2%

30.9%

 

28.8%

 

 

Source: VHM, Vietcap forecasts (last updated on November 26, 2024). Note: (*) Vingroup signed a business cooperation contract (BCC) with VHM to fully transfer the economic interest of real estate developments that are not injected into VHM due to the complexity of paperwork. Thus, VHM records all gains via financial income. 

Figure 2: VHM’s quarterly contracted sales results (VND tn)

 

Source: VHM, Vietcap compilation

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