VHM - 2024 earnings, presales beat forecasts, driven by Q4 bulk sales

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