On May 26, HDC held its AGM in its second attempt following its unsuccessful April 21 AGM that was cancelled due to insufficient voting rights from attending shareholders to achieve a quorum.

Shareholders approved the following main proposals:

* 2025G guidance: Shareholders approved 2025G revenue of VND1.46tn (USD56mn; +2.6x YoY) and NPAT of VND424bn (USD16mn; +6.3x YoY). The guidance is mainly driven by a recognition from the Dai Duong project stake transfer, divestment gain from the Thong Nhat transfer to HDC’s 40%-owned affiliate HUB, and property handovers.

HDC’s NPAT results in 2022/23/24 were equivalent to 98%/27%/16% of their respective guidance set at the beginning of each year.  The 2025G revenue and NPAT guidance are 127% and 145% higher than our respective forecasts. We attribute the higher 2025G earnings guidance compared to our forecast (2025F NPAT-MI forecast of VND173bn/USD7mn; +167% YoY) primarily to higher new presales recognition and divestment gain.

* FY2024 dividend plan: Shareholders approved a stock dividend plan of 12% (equivalent to 21.4 million shares). The implementation time is proposed to coincide with the company’s issuance of convertible bonds to existing shareholders, subject to approval from the relevant authorities.

* FY2025 dividend plan: Shareholders approved a stock dividend plan of 15%. The proposed implementation time is not yet disclosed.

* Domestic bond issue plans: Shareholders approved plans for a convertible bond offering to existing shareholders and a private offering amounting to a total of up to VND1.0tn (USD38mn).

1) Convertible bond offering to existing shareholders:

- Total value of bonds offered (at face value): up to VND500bn (USD19mn).

- Type of bonds: convertible bonds into common shares, unsecured, without warrants.

- Issue ratio: 35,671:1,000 (i.e., shareholders who own 35,671 shares can buy up to 1,000 bonds with a face value of VND100,000/bond; rights are transferable once.

- Proceeds: to repay due or prepay bank loans.

- Bond maturity: 2 years.

- Coupon rate: 10% p.a.; paid every six months.

- Bond conversion: Mandatory conversion into shares at a conversion ratio of 1:10 (each bond converts into 10 shares) in two tranches: 1) First tranche: 40% of issued bonds converted after 1 year, and 2) Second tranche: remaining bonds converted at maturity. Full conversion of the bonds would result in up to ~50 million shares, equating to 28% of the current O/S.

- Issue time: in 2025G, subject to approval from relevant authorities.

2) Private offering: up to VND500bn (USD19mn) in the period of 2025-2026G (before the 2026 AGM). During the AGM, management stated that the bond proceeds are planned to be used for the development of the Phuoc Thang project (54 ha, Vung Tau). 

HDC expects to collect most of the cash payment from the Dai Duong project stake transfer by Q2 2025G. Per management, the total transaction value of the Dai Duong project (total 19.6-ha land area, Ward 11, Vung Tau) is nearly VND2tn (USD77mn), with ~VND700bn received in 2022, VND175bn (USD7mn) collected in April–May 2025, an additional VND845bn (USD33mn) expected in June 2025G — bringing end-Q2 2025G proceeds to ~VND1.7tn (USD38mn) — and the remaining VND268bn (USD10mn) anticipated over the following 11 months. Per HDC, the divestment proceeds will be used for developing The Light City and the Phuoc Thang and Long Dien projects, while the remaining VND1.6tn (USD62mn; as of end-Q1 2025) revenue from this transfer is expected to be recognized in 2025G and 2026G. This profit recognition guidance is ahead of our current projections, but in line with the BOD’s respective resolutions dated April 18, 2025 and May 6, 2025, outlining the plan to fully divest the Dai Duong project (see details in our HDC news).

The proposed merger between Ba Ria–Vung Tau and HCMC, along with the recent entry of large developers are set to stimulate the real estate market in Ba Ria-Vung Tau. Management believes that the proposed merger will benefit Ba Ria-Vung Tau and the real estate market through expectations of a streamlined administrative system, infrastructure improvement, reduced intra-regional competition, and more efficient capital allocation. In contrast, the merger may cause temporary administrative delays during the transitional period. However, management is expediting key legal procedures ahead of the merger to ensure a smoother transition. Additionally, management has noted that the recent entry of SunGroup will increase real estate activities in the region and should create positive spillover effects for HDC’s projects. We forecast HDC’s presales to recover from 2025F with average 2025-26F forecast presales at VND1.1tn p.a. (USD42mn; vs VND850bn/ USD33mn p.a. in 2021-24), driven by launched projects (The Light City P1, Ngoc Tuoc 2, and West 3/2) and expected launches from new social housing project Ecotown Phu My and small-scale project East 3/2.

Management also provided guidance for key projects in 2025G:

- The Light City Phase 1: to obtain sales permits for the new phase, continue construction, and proceed with handovers.

- Ngoc Tuoc 2: to continue ongoing construction.

- West 3/2: to finalize the revised 1/500 detailed planning, settle land use rights fees, secure additional land transfers, and continue ongoing construction.

- Ecotown Phu My (social housing): to continue construction of Block 1 and seek the construction permit to commence Block 2.

- Dai Duong: to complete the project transfer to qualified partners for development. Depending on the transfer process, HDC may consider constructing infrastructure and buildings.

- Other projects: to continue legal procedures.

HDC is evaluating opportunities in industrial cluster development by leveraging the capabilities of its affiliate Thua Thien Hue Construction (HOSE: HUB; HDC owns 40% at end-Q1 2025). HDC is working with HUB—who has prior experience in industrial park development through the Phu Bai IP in Hue—and is currently conducting studies for potential projects in Ba Ria–Vung Tau and Tay Ninh. According to management, HDC will take a gradual approach, aligning its investment plans with its financial capabilities.

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