KBC’s newly released third-quarter financial report showed revenue of VND950 billion, or 3.8 times higher, and post-tax profit of VND202 billion, much higher than the VND18.5 billion of the same period last year

This is an impressive business result, which shows a bright future of KBC, the industrial real estate developer. The business field is believed to prosper in the near future as Vietnam is accelerating public investment and trying to attract more foreign investors. 

KBC will get profit if Donald Trump wins the election to become the US President for the second time.

In early August, The Trump Organization, owned by the former US president Donald Trump, and KBC announced the development of a project on hotel, golf course and residential quarters, capitalized at $1.5 billion in Hung Yen.

KBC said its profit increased sharply in the third quarter 2024 thanks to increased revenue from Industrial Zone development. The profit also came from financial investments (VND116 billion, higher than the VND57.8 billion of the same period last year).

The sharp increase in revenue from financial investment is attributed to the large amount of cash KBC is holding.  As of the end of September, its cash and cash equivalent had reached VND7.652 trillion. Most of the money was in the form of short-term deposits (1-3 month) with interest rates of 1.6-4.5 percent per annum.

KBC also invests in securities. It holds 313,000 ITA shares, where Maya Dangelas (Dang Thi Hoang Yen), Tam’s older sister, is president. It also has investment in Hoa Sen Hotel Co Ltd

Betting on one huge project

Though the business results in the third quarter were very good and the prospects are bright when foreign investment relocates from China to Vietnam, there are still dark spots in Kinh Bac’s business.

KBC’s total revenue in the first nine months of 2024 reached VND1.994 trillion and post tax profit VND397 billion, a sharp fall compared with that of the same period last year. The company last year reported record high profit of VND2 trillion since it began listing shares on the bourse (2007) and revenue of VND5.645 trillion (six times higher than 2022).

KBC reported sharp bank loan interest increase from VND38.9 billion in the third quarter 2023 to VND82.5 billion in the third quarter 2024. By the end of September, KBC had reported huge loans, including VND2.145 trillion from PVcomBank with an interest rate of 13 percent per annum, secured by all the assets related to Trang Cat huge project.

KBC has also borrowed VND1 trillion from VIB at the interest rate of 10.5 percent, secured by KBC shares and the shares of its subsidiary. It also issued VND1 trillion worth of bonds with the interest rate of 10.5 percent.

As such, KBC is borrowing VND392 billion worth of short term capital and VND5.539 trillion in long term capital. Most of the loans are long term and they are small compared with the enterprise’s scale.

Analysts have also noted the sharp rise in KBC’s sale cost and business administration costs in the third quarter 2024.

With the business expansion, KBC’s total assets by the end of September had increased by 27 percent compared with the same period last year to VND42.3 trillion, and the stockholder equity had reached VND20.6 trillion.

The huge amount of cash, deposits and securities, worth VND9.5 trillion in total, up by VND7 trillion over the beginning of the year gives KBC a good foundation to implement huge projects as planned, including the project to be implemented together with Trump Organization.

VnExpress reported that Kinh Bac City and its subsidiaries operate over 5,000 hectares of industrial land and 900 hectares of urban residential land. It attracts about $5 billion of foreign investment each year.

According to Dang Thanh Tam, the Trump family sets high standards for the hotel industry and KBC is looking forward to this potential cooperation deal. 

The project will be a complex with a Vvip 54-hole golf course, high-end resorts and villa network serving special events and high-end conferences, together with a modern network of modern hotels, urban area and housing products. 

Manh Ha