VINACONEX GENERAL MEETING OF SHAREHOLDERS 2021: INCREASE CAPITAL SCALE, TAKE THE GREAT OPPORTUNITIES IN THE MARKET

Increasing charter capital, issuing bonds, accumulating resources to take great opportunities to achieve revenue and profit targets in the next 5 years… these are the strategic plans and orientations that the Vietnam Construction and Import-Export Joint Stock Corporation (Vinaconex, HOSE: VCG) made at the 2021 AGM on the morning of April 27 and were approved unanimously by shareholders.

Shareholders agreed with the strategy to increase capital scale.

With positive changes in the internal business after 2 years of restructuring, such as profit doubling compared to the plan, strong cash flow, early advance payment of cash dividend (Vinaconex has made advanced payment of 2020 dividend since January 2021), shareholders expressed their trust and support for Vinaconex's future development strategy. Shareholders approved the plan to issue shares and bonds to increase financial capacity, supplement long-term and sustainable capital for production and business activities.

In addition to the plan to issue VND 2,000 billion of individual convertible bonds with the market conversion price not less than the book value two times, VCG will also issue VND 2,000 billion in non-convertible bonds, without warrants and with collateral; at the same time, offering for sale nearly 58.29 million shares, equivalent to 14.485% of the total outstanding shares as of December 31, 2020. It’s expected that the issuing shares and bonds plan would bring in VND 5,000 billion.

Notably, Vinaconex shareholders would receive 9% bonus shares from treasury shares.

In the general meeting, the business plan for 2021 was also approved, with consolidated revenue of VND 12,230 billion, a 41% increase year-on-year, and profit after tax of more than VND 1,000 billion.

Ambition to accumulate 5,000 hectares of land by 2025.

Mr. Nguyen Xuan Dong, General Director of Vinaconex, reported to shareholders at the meeting that Vinaconex's development strategy of focusing on the three core areas of construction, real estate, and financial investment to create a firm foothold has been proven to be effective and accurate through the outcomes that the Corporation achieved in 2020. Specifically:

In 2020, the value of construction contracts signed by Vinaconex reached over VND10,000 billion, of which some projects have a large value: Three of the biggest bidding packages of the Easten North-South Expressway (Phan Thiet - Dau Giay, Vinh Hao - Phan Thiet, Mai Son - National Highway 45 sectors) worth VND 8,000 billion, the Mikazuki Danang project; the Long Son Petrochemical Complex project; the Vinh Tuy Bridge Phase 2 project; the K Hospital project, etc. Brand, technical, and financial capabilities, as well as the quality of work completed by Vinaconex, serve as the foundation for firms to win bids on many significant projects. The brand name, technical and financial capabilities, as well as the quality of work completed by Vinaconex, serve as the foundation for the Corporation to win bids on many significant projects.

Regarding the real estate area, Vinaconex has focused on completing the in-progress key projects to have them ready on the market soon, for example, the Cat Ba - Amatina project; the Green Diamond Complex - 93 Lang Ha; the project of Expanded Hoa Binh Boulevard Urban Area in Mong Cai City; the KM3, KM4 Urban Areas in Hai Yen Ward, Mong Cai City, etc. The Corporation has diversified its product portfolio by developing resort real estate projects (Condotel Resort project along the coast of Tuy Hoa city, Phu Yen province; the Tam Ky Resort hotel project, Quang Nam province), industrial park projects in Hanoi city, Ha Nam province, etc. With major financial resources, Vinaconex is promoting land bank accumulation with the goal of owning 5,000 hectares of project land by 2025.

Financial investment is also highly effective, as VCG has currently invested in many businesses operating in sustainable business fields (energy, clean water, education, labor export, etc.). The dividend and profit income from the member units and affiliated companies, such as Nedi 2, Viwaco, Ly Thai To Education System, etc., is stable. Vinaconex has divested all capital in some companies that are underperforming or not making the expected profits, as well as effectively implemented the equity restructuring activities in 2020 that have resulted in high profits for the Corporation.

VCG recorded a consolidated profit after tax for the entire 2020 year, reaching VND 1,690 billion, up 2.15 times year-on-year. By the end of 2020, VCG's total assets were nearly VND 19,610 billion, up nearly VND 300 billion compared to the beginning of the year. In which, the cash and term deposit value reached VND 3,546 billion, accounting for 18% of total assets and an increase of 54% compared to the beginning of the year. In their remarks to shareholders, the Corporation's executives stated that Vinaconex is ready with the necessary human and financial resources to assure the success of infrastructure development projects, ensure the progress of infrastructure construction projects, and implement real estate projects right after the market situation improves.

According to the representative of Vinaconex, the Corporation has an ambition to be named among Vietnam’s top 10 leading enterprises in terms of real estate investment and business and industrial park infrastructure development, with a project land bank of more than 5,000 hectares and a profit target of VND 2,000 billion in the next five years. The construction and real estate sectors will make up 70% of the total revenue/profit. This objective is totally feasible, as VCG has amassed a land bank of over 2,000 hectares in several localities with thriving real estate markets, including Hanoi, Hai Phong, Quang Ninh, Da Nang, Quang Nam, Phu Yen, and others in the country. With available financial resources, the plan to increase charter capital by issuing bonds is estimated to bring in VND 5,000 billion, allowing Vinaconex to confidently promote construction and installation activities, undertake real estate projects of housing, resort urban areas, and industrial parks, as well as develop the Vinaconex brand name.

(vietstock.vn)