Profit increased sharply, holding 9,500 billion VND

Kinh Bac Urban Development Corporation (HoSE: KBC), chaired by Mr. Dang Thanh Tam, has just announced its financial report for the third quarter of 2024 with revenue reaching VND 950 billion, 3.8 times higher; profit after tax reaching nearly VND 202 billion, a sharp increase compared to VND 18.5 billion in the same period last year.

This is an impressive business result. KBC's future is considered bright, among the few industries with positive prospects such as public investment, steel and industrial real estate. KBC will benefit if Mr. Donald Trump is elected President of the United States in the upcoming election on November 5.

In early August, The Trump Organization - the corporation of US presidential candidate Donald Trump - and KBC announced the development of a hotel, golf course and residential project, with a total investment of about 1.5 billion USD in Hung Yen .

According to the explanation, KBC's profit in the third quarter of 2024 increased sharply thanks to increased revenue recognition from industrial park business activities. In fact, the result also came from large financial revenue, reaching more than 116 billion VND compared to more than 57.8 billion VND in the same period last year.

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Mr. Dang Thanh Tam - Chairman of the Board of Directors of Kinh Bac Urban Development Corporation. Photo: Hoang Ha

The reason for the sharp increase in financial revenue is that KBC is holding a large amount of cash. By the end of September, cash and cash equivalents were more than VND7,652 billion, mostly short-term deposits with terms of 1-3 months, with interest rates of 1.6%-4.5%/year.

In addition, more than VND1,862 billion is trading securities, mainly short-term investments in Hoa Sen Hotel Company Limited. KBC also holds nearly 313 thousand ITA shares, chaired by Ms. Maya Dangelas (Dang Thi Hoang Yen) - Mr. Tam's sister.

Put all assets into a big project, borrow at 13% interest rate

Despite recording very positive business results in the third quarter and the prospect of a breakthrough when investment flows shift from China to Vietnam if Mr. Trump wins the election, Mr. Dang Thanh Tam's KBC also has some not-so-bright points.

In the first 9 months, KBC recorded revenue of more than VND 1,994 billion and after-tax profit of more than VND 397 billion, a sharp decrease compared to the same period in 2023. Last year, KBC recorded a record net profit since its listing in 2007, with VND 2,000 billion and revenue of VND 5,645 billion (6 times higher than in 2022).

In the third quarter of 2024, KBC reported a sharp increase in interest rates from VND38.9 billion in the same period to nearly VND82.5 billion. By the end of September, KBC recorded large loans, such as nearly VND2,145 billion from PVcomBank with an interest rate of 13%/year, secured by all assets related to the Trang Cat mega-project.

KBC also borrowed 1,000 billion VND from VIB with an interest rate of 10.5%, secured by KBC shares and subsidiary shares. In addition, there is 1,000 billion VND in bonds with an interest rate of 10.5%, secured by subsidiary shares.

In total, KBC borrowed nearly VND392 billion in short-term loans and nearly VND5,539 billion in long-term loans. However, most of them were long-term and quite low compared to the size of the business.

In the third quarter, KBC also recorded a sharp increase in sales costs and business management costs.

Along with expanding business operations, KBC's total assets by the end of September increased by nearly 27% over the same period, to more than VND42.3 trillion. Owner's equity reached more than VND20.6 trillion.

With a large amount of cash, deposits and trading securities, up to more than 9,500 billion VND, an increase of nearly 7,000 billion compared to the beginning of the year, it is the basis for KBC to carry out upcoming major projects, including the project with Trump Organization.

According to Mr. Dang Thanh Tam, Mr. Trump's family has always been a pioneer in setting the highest standards for the hotel industry and KBC looks forward to this potential cooperation. The complex is expected to include a 54-hole Vvip golf course system, a synchronous high-end resort and a villa system, serving special events and high-level conferences. Along with that is a system of hotels, urban complexes, and modern housing.

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