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VHM — DOUBLE-DIGIT GROWTH IN 2021F

01/02/2021 - 10:51

DOUBLE-DIGIT GROWTH IN 2021F

VHM held its 4Q20 results call on Friday afternoon.

Key takeaways

Impressive growth in 4Q20 with revenue up +54% and PATMI up +79%. VHM delivered c. 11.6k retail units in 4Q20, with the three mega projects accounting for c.86% of the total. Additionally, earnings from two bulk sale transactions were recognized in the quarter (i.e., the sale to Samty Corporation at Vinhomes Smart City and 80% of the second bulk sale transaction with Mitsubishi Nomura at Vinhomes Grand Park).

Double-digit growth is in store for 2021F after the rapid growth in 2020, when revenue reached VND 71tn (up +37% YoY) and PATMI was VND 28tn (up +28% YoY). 2020 gross margin was lower than that of 2019 due to the higher proportion of bulk sales in 2019. However, management stated that gross margin of retail sales from the three mega projects is higher than that of previous projects, which is positive.

Three mega projects will remain the core contributors of 2021 earnings. VHM expects to deliver c.14k retail units, most of which (c 2.7k) will be low-rise units that should account for over 50% of delivery value. In addition, the company expects bulk sales to contribute c. 50% of 2021E profit. Management disclosed that three prospective bulk sales transactions are currently in negotiation process, but this number is very likely to increase in 2021.

Unbilled booking value and presold units fell. Unbilled bookings value was VND 62tn at 4Q20, down -31% YoY. Presold units were c. 28k (95% of which were attributable to the three mega projects), down -54% YoY. New presold units at Vinhomes Grand Park were c. 11.2k and Vinhomes Ocean Park and Vinhomes Smart City were c. 7.4k and c. 7.8k, respectively. Totally, these projects have completed 86%, 65%, and 55% of total units sold, respectively.

The north is still the key market in 2021-22. Management plans to start construction at Vinhomes Can Gio in 2023, and the company is currently implementing land reclamation and fulfilling the required administrative procedures. VHM has no plans to launch any other new projects in HCMC.

Three new projects will be launched in 2H21 upon completion of sales at the three mega projects. VHM plans to launch 500 units at Vinhomes Wonder Park in 3Q21, while 600 units of Vinhomes Dream City (460ha) and 200 units of Vinhomes Co Loa will be launched in 4Q21. Most of those are low-rise units and located near Hanoi’s CBD.

Earnings from industrial park development to be recognized from 2021. Management stated that this business will account for less than 5% of total revenue at first. But this contribution will grow starting from 2022, and it should reach around 10% of total revenue in the long term.

For the complete report, please access here: VHM–Double-digit growth in 2021 — 4Q20 earning results 

Analyst: Tam Nguyen, tam.nguyen@yuanta.com.vn

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