What prospects for HDC?

For the full year of 2024, HDC recorded revenue of VND 546.44 billion, down 17.89% year-on-year, and cumulative profit of VND 64.88 billion, down 50.71% compared to the same period last year.

Favorable conditions for capital mobilization

At the end of the year, HDC’s total assets increased by 3.8% compared to the beginning of the year, equivalent to an increase of VND 177.3 billion, reaching VND 4,876.2 billion. The company’s assets mainly consist of long-term work-in-progress assets amounting to VND 1,364.7 billion (28% of total assets); inventories of VND 1,360.6 billion (27.9% of total assets); short-term receivables of VND 927.6 billion (19%); and long-term financial investments of VND 823.99 billion (16.9%).

According to HDC’s notes, the main portion of short-term work-in-progress within the inventory includes VND 910.3 billion in The Light City mixed-use residential project; VND 94.3 billion in the Tran Phu Villa project in Ward 5, Vung Tau City; and VND 72.5 billion in the West 3/2 residential area project. This is a noteworthy point, as large amounts of work-in-progress inventory can tie up capital and lead to negative cash flow if the market is unfavorable and the company lacks the resources to push these projects to completion and bring products to market. On the flip side, this could be seen as "reserved value"—assets that, once refined and completed, could generate significant cash flow if the market has purchasing power and the company has the means to execute.

HDC’s funding structure in 2024 included total short- and long-term loans of VND 1,598 billion (32.8% of total assets, down 6.3% from the end of 2023). Of this, short-term loans accounted for VND 1,176 billion, and long-term loans VND 422 billion. The company fully repaid its remaining bonds (VND 97.6 billion) in 2024. This clean slate creates more favorable conditions for HDC to raise funds for upcoming projects in 2025.

The bond issuer's regular report, which HDC published on March 28, said that the company's total liabilities, including bank loans and other payables, were VND 2,541 billion. Even if it paid off all of its bond obligations by the end of 2024, bank loan debt may still be a major obstacle in the future.

Challenges ahead

Despite falling short of its 2024 financial targets, HDC is projected to have brighter prospects in 2025. This stems from the very causes of its current underperformance—namely, the potential market recovery and anticipated increase in demand for real estate.

HDC mainly operates in Ba Ria - Vung Tau, a region that is expected to gain further traction if economic space continues to expand, thus increasing potential opportunities.

Vietcap predicts that by the end of 2025, the Ba Ria-Vung Tau (BRVT) real estate market would start to rebound, helped by increased confidence among homebuyers and advancements in infrastructure. The Bien Hoa - Vung Tau Expressway (BHVT) is a major contributing element. Nearing completion, the first 19.5 kilometer segment of BRVT is anticipated to open to traffic in June 2025. The government plans to finish the project by the end of 2025, and the final 34 kilometers in Dong Nai province are now being built and cleared for sites.

Vietcap believes HDC is well-positioned to capture the market rebound in BRVT, thanks to its strategically located land bank that will benefit from the BHVT expressway. As such, they forecast HDC’s average annual sales in 2025–2026 to be VND 1.1 trillion (compared to VND 850 billion/year from 2021–2024), driven by existing project sales (The Light City Phase 1, Ngoc Tuoc 2, and West 3/2 Residential Area) and new launches like the Ecotown Phu My social housing project and a smaller-scale project in East 3/2.

One notable point is that HDC’s cash balance at the end of 2024 was just VND 10 billion. Vietcap projects that debt financing will remain a key funding source for project development from 2025 to 2027, particularly for large-scale projects like Phuoc Thang and The Light City Phase 2. HDC is also exploring alternative fundraising methods, such as strategic partnerships and project transfers.

On March 24, 2025, HDC’s Board of Directors issued several decisions, including calling a general shareholders meeting (scheduled for April 21) and forming a Legal Affairs Committee. One key function of this committee is to handle legal matters for M&A projects—likely a preparatory step for raising capital in the coming year. Previously, in terms of M&A activity, HDC had a deal to transfer the remaining shares of an 11-hectare plot in the Dai Duong project (with estimated revenue of VND 506 billion and pre-tax profit of VND 327 billion), which has not yet been recorded in 2024 and is considered "reserved value" that could be booked in the 2025 financial year.

Vietcap forecasts HDC’s post-tax profit attributable to shareholders in 2025 to surge 167% year-on-year to VND 173 billion, mainly driven by divestment profit from the Thong Nhat project transferred to HUB—a 40%-owned associate of HDC (contributing around 48%)—and continued handovers from The Light City Phase 1 and Ngoc Tuoc 2. However, they also caution that project sales are slower than expected, and challenges remain in raising capital for large-scale developments.

Additionally, ABS noted that HDC’s debt ratio remains relatively high. There’s also potential risk from tax penalties (around VND 40 billion noted in the financial statements without detailed explanation), which could affect its financial performance, along with legal delays affecting HDC’s real estate projects.

Given all this, Vietcap gives an "Outperform" rating for HDC stock, with a target price of VND 30,400/share. The current market price, following an upward trend since February 25, stands at VND 28,100/share.