KDH seeks new launchpad

Notable real estate businesses reporting financial income in the first half of 2024 include VHM, PDR, NVL, and NLG. In this group, KDH also earned extraordinary income while still selling projects.

Revenue boost

By the end of Q2 2024, KDH has continued to supply low-rise apartments from The Classia project. Additionally, KDH sold a plot of land from its inventory that no longer fit with its development goal. This deal provided unusual revenue, bringing the company's gross profit margin to 77.6% (up 25.4 percentage points from the previous quarter). As a result, KDH reported sales and net profit of VND 644.5 billion and VND 278.5 billion, respectively, increasing 9.4% year on year.

Earlier, KDH's Q1 net revenue dropped 21% year-on-year to VND 334 billion. Revenue from real estate sales still accounted for the largest share, exceeding VND 318 billion, down 21%. The shift in Q2 shows that while the company continued to transfer real estate, the value of KDH’s prepayment from buyers also increased by VND 237 billion. This demonstrates the company’s strong sales progress.

In the first half of 2024, KDH recorded total revenue of VND 978.5 billion, with net profit after tax of VND 344 billion, down 2.9% and 24.7% year-on-year, respectively, achieving 25% of its revenue target and 44% of its profit target for the year.

Can the plan be achieved?

In terms of profit forecasts, KDH has come close to meeting expectations; nonetheless, revenue remains lower than anticipated. Clearly, project transfers and the liquidation of some land plots were successful ways for the corporation to declare net profits. However, throughout the remaining months of the year, KDH's net income from sales and services must still be recognized through product sales and handovers.

One of the few remaining apartment complexes in downtown Ho Chi Minh City, KDH's The Privia, launched sales in the fourth quarter of 2023 and January 2024. Due to its good location and fair price, this project is expected to easily reach 100% sales, potentially generating over VND 2,000 billion in revenue and considerably adding to KDH's earnings this quarter.

At the same time, the firm has expedited its capital expansion through the issue of shares and an ESOP, bolstering its resources to carry out three high-end low-rise projects: Emeria, Clarita, and Solina.

MBS forecasts that KDH's total signed sales value for 2024, 2025, and 2026 will reach VND 1,999 billion; VND 8,570 billion; and VND 7,042 billion, respectively, thanks to strong absorption amid weak supply in the Ho Chi Minh City market. As a result, KDH is expected to achieve net profits of VND 943.1 billion (up 31.5%), VND 1,058 billion (up 12.1%), and VND 1,340 billion (up 26.7%) over the next three years.

Experts have identified KDH's risks which include the Emeria and Clarita projects falling short of expectations, legal concerns influencing the valuation of the Tan Tao project, and an unexpected deterioration of the real estate market overall.