Enterprises increase resources accumulation

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The large amount of deposits brought ACV a large financial income in the context of a sharp decline in aviation services. Source: Internet

Money collectors

Recognition from the financial statements of the second quarter of listed companies shows that the amount of cash, cash equivalents and short-term financial investments (including deposits, bonds, trading securities) of many enterprises has increased in the first six months of 2020.

Specifically, at the Airports Corporation of Vietnam (ACV), the amount of deposits, cash and cash equivalents as of June 30, 2020 reached VND33,825 billion, an increase of VND2,555 billion compared to earlier this year. At Hoa Phat Group Joint Stock Company (HPG), these items even increased to over VND5,000 billion, equivalent to an increase of 78%, to VND12,146 billion. Notably, HPG's held-to-maturity investments (term deposits) increased strongly by 3.4 times to VND 4,668 billion.

Another “billionaire” in cash, Vietnam Dairy Products Joint Stock Company (VNM), has also increased by VND3,928 billion in term deposits in the first six months of 2020, to VND16,363 billion. VNM's cash amount also remained at over VND2,000 billion. Similarly, Vietnam Gas Corporation also accumulated VND33,640 billion in deposits, cash and cash equivalents in the first six months of this year, an increase of VND4,249 billion compared to the beginning of the year. This target at Loc Troi Group Joint Stock Company also increased by 200% compared to the beginning of the year, to VND409 billion.

The large deposit has brought these businesses a significant source of income from bank interest. Specifically, ACV earned VND1,115 billion in revenue from finance activities in the first half of this year, up 27% compared to the same period last year. This revenue has helped ACV to offset the costs significantly in the context that the main business activities such as the provision of aviation services and non-aviation have decreased significantly. At HPG, revenue from financial activities in the first six months of 2020 also doubled over the same period last year, recording VND424 billion, thereby helping the company increase profit. Similarly, many other companies also recorded impressive revenue from financial activities such as VNM reached VND620 billion, up nearly 70%; GAS reached VND779 billion, up 14%; Loc Troi also earned VND22 billion, while in the same period last year this only brought in VND9 billion.

Estate accumulators

While many manufacturing companies actively accumulate cash to wait for disbursement and investment opportunities when the pandemic is over, real estate businesses take advantage of the time to expand land funds andprojects with the hope to buy cheaply. LDG Investment Joint Stock Company (LDG Group) recently received the transfer of Song Da Riverside apartment project from HiepPhuc Real Estate Company - a subsidiary of Quoc Cuong Gia Lai. Accordingly, LDG Group bought 99.9% of Hiep Phuc's shares for VND626 billion. After the deal, LDG Group changed its name to the LDG River apartment complex with an investment of over VND4,100 billion, on a 2.8-hectare scale in Thu Duc district, HCMC.

Similarly, Phat Dat Real Estate Development Joint Stock Company has also acquired the Wynham Tropicana Long Hai resort complex and Ben Thanh - Long Hai resort by acquiring 99% of capital in Ben Thanh Joint Stock Company - Long Hai. In particular, the Wynham Tropicana Long Hai project is planned on a total land area of 12.64 hectares and has been launched by Ben Thanh Long Hai Company since July 2019. It is expected to be handed over to customers in the fourth quarter of 2021. And the project Ben Thanh - Long Hai tourist area has a total investment of about VND450 billion, built on a land of 12.5 hectares, located in Phuoc Hai commune, Dat Do district, Ba Ria-Vung Tau province.

In the central region, Danh Khoi Group also acquired 100% of the capital from Sun Frontier Investment Company Limited to officially become the investor of the Sun Frontier project located in Da Nang City.After the acquisition of this project, Danh Khoi Group implemented a new project called The Royal - Boutique & Condo Da Nang (The Royal).

Finding new projects to carry out M&A to increase land fund is a strategy that many real estate companies with the financial potential to promote in the context of the pandemic have made many itdifficult to implement project declaration.At the Annual General Meeting of Shareholders in 2020, the leaders of An Gia Real Estate Development and Investment Joint Stock Company also stated that the COVID-19 pandemic is opening up a golden opportunity to buy back projects while half a year ago, it was difficult because of high prices and difficulties to negotiate. Accordingly, the company spent VND3,000-5,000 billion in 2020 for the land fund. Previously, in 2019, the company also spent VND2,800 billion to buy a land fund to develop four projects in Ho Chi Minh City, Ba Ria-Vung Tau and Binh Duong.

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Nam Long Investment Joint Stock Company is also concentrating resources to expand land fund towards medium and long-term strategies. Accordingly, the company plans to spend up to VND2,000 billion per year for this plan.