The Kinh Bac City Development Corporation (HoSE: KBC), led by Chairman Dang Thanh Tam, has reported a substantial profit driven by its industrial zone business and interest income from bank deposits, despite holding significant debt. The industrial real estate giant is poised for a potentially lucrative project in collaboration with former U.S. President Donald Trump’s family.

KBC recently disclosed its Q3 2024 financial results, showcasing revenues of VND 950 billion, marking a 3.8-fold increase, and a post-tax profit of nearly VND 202 billion - a significant rise from VND 18.5 billion in Q3 2023.

These results are impressive, placing KBC among a few sectors like public investment, steel, and industrial real estate that are seen with positive outlooks. If Donald Trump wins the U.S. presidential election, KBC could gain considerable advantage.

In early August, Trump’s company, The Trump Organization, and KBC announced plans for a hotel, golf course, and residential complex in Hung Yen, with a projected investment of USD 1.5 billion.

The strong growth in KBC’s Q3 2024 profits was attributed to increased revenue recognition from its industrial park operations and substantial financial income of over VND 116 billion, compared to VND 57.8 billion in the same quarter of 2023.

Chairman Dang Thanh Tam has bolstered KBC’s financial position, with cash and cash equivalents surpassing VND 7.65 trillion as of late September. This figure primarily represents short-term deposits with interest rates ranging from 1.6% to 4.5% per annum. Additionally, KBC holds VND 1.86 trillion in marketable securities, mainly through investments in Hoa Sen Hotel LLC, and controls nearly 313,000 shares of ITA, chaired by Maya Dangelas (Dang Thi Hoang Yen), Tam’s sister.

Despite positive quarterly results and favorable conditions tied to potential shifts in global investment from China to Vietnam, KBC has notable financial challenges. In the first nine months of 2024, it posted revenues exceeding VND 1.99 trillion and net profits of over VND 397 billion, a sharp decline compared to the record VND 2 trillion in net profit and VND 5.65 trillion in revenue of 2023.

KBC’s loan interest expenses surged to nearly VND 82.5 billion in Q3 2024, up from VND 38.9 billion a year prior. By September’s end, it reported significant debts, including VND 2.14 trillion borrowed from PVcomBank at 13% interest, secured by assets related to the Trang Cat megaproject.

Other borrowings included VND 1 trillion from VIB at 10.5% interest, backed by KBC and subsidiary shares, as well as a VND 1 trillion bond issuance at the same rate, similarly secured.

KBC’s total debt comprised nearly VND 392 billion in short-term loans and approximately VND 5.54 trillion in long-term loans, with a manageable ratio given the company’s scale.

The company also recorded increased sales and administrative expenses in Q3, aligning with its business expansion. By the end of September, KBC’s total assets had risen nearly 27% year-on-year, exceeding VND 42.3 trillion, with owner’s equity reaching over VND 20.6 trillion.

KBC’s robust cash reserves, now over VND 9.5 trillion (up nearly VND 7 trillion since early 2024), underpin its ability to embark on ambitious projects, including the collaboration with The Trump Organization. According to Chairman Dang Thanh Tam, the Trump family is known for setting high standards in the hospitality industry, and KBC anticipates significant potential from this partnership.

The proposed development features a luxurious 54-hole golf course, an integrated resort complex, modern villas for high-profile events and summits, as well as hotels and residential facilities.

Manh Ha