CÔNG TY CỔ PHẦN ĐẦU TƯ NAM LONG (HOSE: NLG)
Số 6 Nguyễn Khắc Viện, P. Tân Phú, Quận 7, TP.HCM
Điện thoại: (84.28) 54 16 17 18
Fax: (84.28) 54 17 18 19
Explaining why the revenue growth plan is low but projected growth in profit is still high, Nam Long representative said that from 2019, the return from investment in joint venture will increase year by year, contributing to the profit growth.
Highlight of this year’s meeting is the plan to pay 10% dividend in cash, 10% in shares and issue bonus shares at 10% in the financial year of 2019. 2019 is also the year which Nam Long start speeding up towards the goal of becoming the best township developer in Vietnam in understanding and responding to customer needs, by 2020.
Despite a tough market, actual profit in 2018 surpassed the objective by 24%.
In 2018, Nam Long continued to grow steadily despite a very challenging market. Product sales increased by 25% to VND 5,156 billion in 2018. Specifically, total product sold was 3,272 products, including 162 Valora townhouses/villas, 1,776 Flora apartments, and 1,112 EHome/EhomeS apartments and 222 land plots.
Revenue increased by 11% from VND 3,161 billion in 2017 to VND 3,480 billion in 2018. Parent company net profit increased by 43% to VND 763 billion. Profit after tax exceeded planning at 124%. Dividends paid out was equivalent to 12.78% of charter capital on April 20, 2019, combined of 4.89% cash dividend and 7.89% share dividend.
Nam Long Executive Board admitted that 2018 was a successful year for Nam Long kick off township development projects. Specifically, in April 2018, Nam Long signed a cooperation agreement with Hankyu Hanshin and Nishitetsu Group to develop 8.5-hectare township, Akari City, in Binh Tan District.
In June 2018, the 355-hectare Waterpoint project site in Long An was officially initiated. Ground leveling and infrastructure construction has been executed. Particularly, phase 1 with site area of 165-hectare (Southgate) was co-invested by Nishitetsu, TBS Group and Tan Hiep Invest, aiming to begin sales in Q2,2019.
Plan to increase net profit by more than 25%
Nam Long confirmed that 2019 would be accelerating year of the group. Nam Long planned to increase revenue by only 0.15% to VND 3,485 billion; however, the after-tax profit of parent company would be VND 956 billion, up 25.3% compared to 2018. Dividend payout would be a contribution of 10% cash, 10% shares and bonus shares issued at 10% for this financial year.
Responding to shareholders' question about growth plan low on revenue but high in profit, Nam Long said that the consolidated revenue does not include revenue from joint venture with Japanese partners due to the specific nature of investment strategy of joint ventures. However, this joint venture contributes to Nam Long’s net profit through profit sharing.
Shared profit from the joint venture in 2019 is projected to reach more than VND 306 billion (VND 14 billion recorded in 2018), resulting in an increment of 25% in after-tax profit of the parent company.
This year, Nam Long will focus to develop major townships with international standards, modern infrastructure and complete amenity system to increase returned value for customers and shareholders.
Nam Long has reportedly completed the acquisition of 3 clean land plots, including the Waterfront township (170 hectares in Long Hung, Dong Nai), Nam Long Dai Phuoc (45 hectares in Nhon Trach, Dong Nai) and Nam Long Hai Phong (21 ha in Thuy Nguyen, Hai Phong) to prepare for development in upcoming period.
Nam Long currently owns clean land fund of 650 hectares at prime location, ready-to-use which guarantees for development plan in the next 10 years.
Speaking at the Annual Meeting, Nam Long representative said that the company has 65 hectares of land for commercial real estate in the total land fund of 650 hectares. From this year, Nam Long will focus on developing commercial real estate as core products of the group (besides housing products) and expect revenue and profit of such product to be 30% of Nam Long's total revenue and profit after 10 years of development.
65 hectares of commercial land including land for schools (from kindergarten to university); healthcare (from medical centers to hospitals); multipurpose use, retail and commercial centers.
Waterpoint project (Long An): NLG is carrying out legal procedures, has obtained a permit for infrastructure construction, and has completed the leveling of 165 hectares of phase 1 (South Gate) and is in progress. Construction of model houses, utility areas, and commercial areas to ensure the plan of opening and selling of the Executive Board. For Waterpoint, Nam Long will have new products this year. Some land lots in Waterpoint project will be co-operated by Nam Long with secondary investors, strategic investors as well as construction units capable of developing products.
As planned, the sale of South Gate's products will be recorded in 2019, the 35ha Waterpoint transfer in the South Gate joint venture is planned to record revenue and profit by 2020.
Akari Project (Binh Tan District, Ho Chi Minh City): Nam Long is in the process of implementing legal procedures to transfer 5,000 m2 of the third phase of the project, developing 2020 - 2021 from agricultural land. to residential land. Despite the common difficulties of the market, we will also make efforts to ensure the plan has been set.
In 2018, Nam Long introduced Akari (phase 1) to the market when the number of customers ordering products was many times higher than the number of products offered, so Nam Long Executive Board decided to suspend sales to bring Akari phase 2 to market to meet the needs of customers who have ordered products. NLG has cooperated with Vietcombank, introduced customers a housing saving program, to transfer customers' deposits to deposit at Vietcombank, wait for the opening date of selling Akari back.
Akari's 3 blocks have about 900 products, currently there are about 1,100 customers sending money at Vietcombank ready to transfer that money into a deposit when Nam Long proceeds to sell at the end of the second quarter, early in the third quarter.
Waterfront (Dong Nai): Within this year, Nam Long will start the design and leveling process. This project is expected to return revenue from 2021.
Adjustments in the business plan for the 3 years from 2018 to 2020
The update on the business for 3 years from 2018 to 2020 was submitted to the shareholders. Specifically, total products sold (contract signed) is adjusted to 15,273, up 22% compared to 12,524 products in the plan of 2018 – 2020.
Total net profit in 3 years was increasingly adjusted from VND 2,526 billion to VND 2,846 billion, different by VND 320 billion, up 13% of the approved plan 2018-2020.
Answering to shareholder’s question about Nam Long's sales strategy as the real estate market in Ho Chi Minh City slowing down, Nam Long said that in the past 2 years, the real estate market in Ho Chi Minh City. Ho Chi Minh City was very challenging, and the product supply was scarce. But at every Nam Long's opening sales, at least 90% of the products were sold. In each sales opening, Nam Long listed about 500 to 600 products.
Nam Long now has a great competitive advantage which is the partnership with two Japanese companies. Nam Long’s brand and product quality has been improved significantly within the past 2 years. In addition, through the cooperation with Japanese partners, a stronger financial capacity allowed Nam Long to offer more competitive payment plans than competitors, reducing financial stress for Nam Long’s customers.
Indeed, with other local projects, investors require up to 70% of the total price during construction process. But Nam Long only required deposit of 50% throughout development period. At 50%, customers can utilize loan solutions and must pay only 20% to 30% within the first 12 to 15 months. They can also get a bank loan to pay off the remaining cost.
Nam Long reportedly set objectives which developed products increase by 4 times in the period of 2019-2021, number of deliveries increase by 3 times between 2015-2018, equivalent to 26,000 EHome, Flora and Valora products developed and 16,000 products delivered.