Vinhomes’ Remarkable Bond Placement: A Financial Milestone
By Minh Hue
Thu, December 19, 2024 | 9:28 pm GMT+7
In a notable development within Vietnam’s real estate sector, Vinhomes, a leading housing developer, successfully raised VND 4 trillion (approximately $157 million) in a private placement of bonds on December 19, 2024, as reported by the Hanoi Stock Exchange (HNX). This impressive fundraising effort underscores the company’s robust financial strategy amidst a competitive market landscape.
Details of the Bond Offering
The bonds issued are non-convertible, with a maturity period of 36 months and an attractive annual coupon rate of 12%. Notably, these bonds are secured by assets, providing a layer of security that appeals to potential investors. This strategic move contributes to Vinhomes’ broader financial strategy, which has already seen significant capital mobilization this year.
Since the start of 2024, Vinhomes has completed nine private placements, raising a total of VND 20.5 trillion (around $805.1 million). These efforts represent a substantial 32.2% of the total value of bonds issued by real estate firms in Vietnam during the first eleven months of the year, demonstrating Vinhomes’ dominant position in the market.
Financial Position and Performance
According to Vinhomes’ Q3 financial statement, the company’s bond balance stands at an impressive VND 27.5 trillion (about $1.08 billion), which accounts for over 5.2% of its total capital. The maturity periods for these bonds range from October 2024 to August 2026, with fixed coupon rates varying between 8.8% to 12% per year. VietinBank Securities is serving as the consultant for all of Vinhomes’ bond issues, ensuring a professional and strategic approach to their financing needs.
In a stunning move, Vinhomes executed a record share buyback on November 21, repurchasing nearly 247 million shares over a span of 22 trading sessions. The total transaction value was around VND 10.5 trillion ($412.37 million), marking the largest share buyback in the history of Vietnam’s stock market. This buyback accounted for 66.75% of the total registered volume, reflecting the company’s commitment to enhancing shareholder value.
Recent Earnings Insights
Vinhomes reported a net revenue of VND 33.3 trillion ($1.3 billion) in Q3, representing a slight year-on-year increase of 1.8%. However, due to rising costs and expenses, the company’s after-tax profit declined by 16% to VND 8.98 trillion ($352.7 million). For the first nine months of 2024, Vinhomes recorded a net revenue of VND 69.9 trillion ($2.75 billion), down 26% year-on-year, with pre-tax and after-tax profits reflecting significant declines of 41.3% and 36.4%, respectively.
Despite these challenges, Vinhomes has pointed to strong performances from various projects, such as Vinhomes Ocean Park 2-3 in Hung Yen and the Vinhomes Royal Island project in Hai Phong, as pivotal contributors to their financial results during this period.
Future Outlook and Company Goals
Vinhomes has set ambitious targets for 2024, aiming for revenues of VND 120 trillion ($4.71 billion) and after-tax profits of VND 35 trillion ($1.37 billion). As of now, the company has successfully achieved nearly 58.3% of its revenue target and 58.9% of its profit target after the first nine months.
At the end of the trading day on December 19, VHM shares closed at VND 40,200 ($1.58) per share, reflective of the company’s market reputation and investor confidence in its future potential.
In this vibrant and rapidly evolving landscape of Vietnam’s real estate market, Vinhomes continues to position itself as a leader through innovative financial strategies and impactful project developments. Each financial maneuver and project launch adds to the narrative of a company that is navigating challenges with resilience and foresight.