KDH stock price turns around under net selling pressure from foreign investors

Khang Dien House Investment and Trading Joint Stock Company (code KDH) is preparing to enter the phase of opening sales of many important projects, but foreign investors are still continuously net selling shares of this enterprise.

Khang Dien House Investment and Trading Joint Stock Company (code KDH) is preparing to enter the phase of opening sales of many important projects, but foreign investors are still continuously net selling shares of this enterprise.

Foreign investors continue to net sell after private offering of 110 million shares

Contrary to expectations that the stock would have the same growth momentum as the market after the company's capital increase, KDH shares of Khang Dien House Investment and Trading Joint Stock Company suddenly fell again after the accumulation period. From December 30, 2024 to February 25, 2025, the price of this stock decreased by 7.7%, from VND 36,150 to VND 33,350/share. With the continuous decrease, KDH has traded below the long-term support line MA200, signaling that the downtrend may continue in the near future.

Previously, on August 1, 2024, Khang Dien House completed the private offering of more than 110 million shares at VND 27,250/share, raising more than VND 3,000 billion. Of which, the Company plans to use VND 300 billion to repay loans under Credit Contract No. 0116/2021/HDTD-OCB-DN, disbursed in 2024 and 2025; and VND 2,700 billion to contribute additional capital to Khang Phuc House Investment and Business One Member Co., Ltd. so that this unit can pay off bank debts.

However, since the capital increase, foreign investors have continuously shown a tendency to net sell KDH shares. Therefore, the room for foreign investors on August 1, 2024 increased from 85.6 million shares to 132.8 million shares (February 25, 2025) and the net selling trend is still strong in early 2025.

In addition, Vietnam Ventures Limited Fund, a unit related to VinaCapital group, has registered to divest all of more than 7.4 million KDH shares (in December 2024, this fund sold more than 1.5 million KDH shares), to reduce ownership from 0.73% to 0% of charter capital, the transaction is expected to take place from February 25 to March 26.

In fact, besides the story of accumulating land funds, Nha Khang Dien is showing cash flow problems when maintaining a capital deficit model lasting from 2021 to 2024. In particular, in 2024 alone, the Company recorded a negative operating cash flow of VND 4,251.78 billion - a record negative value since its listing in 2010.

To have counterpart funds to accumulate land funds, from January 1, 2021 to December 31, 2024, Khang Dien House increased its debt by 284.7% compared to the beginning of the period, equivalent to an increase of VND 5,253 billion to VND 7,098.1 billion, equal to 36.5% of total equity (at the beginning of the period, the outstanding debt was only VND 1,845.1 billion and equal to 22.6% of total equity).

The increase in debt during the land fund accumulation period of Khang Dien House also raises many issues for investors to pay attention to, especially the leverage ratio that has increased over the past 4 years and the implementation of sales and absorption rates of products in the coming time.

In particular, VPBank Securities Company noted that the debt-to-equity ratio of Khang Dien House has increased over the past 5 years due to the investor developing the land fund. At the same time, the project implementation is slower than expected, causing the investment costs of the projects to increase due to the capitalization of loan interest and the cost of site clearance. These are notable risks when investing in KDH shares.

New projects are about to open for sale

Returning to the period of capital deficit that has lasted from 2021 to present, Khang Dien House has continuously increased and accumulated inventories. At the end of 2024, the total inventory value had reached VND 22,179.6 billion, equal to 72.1% of total assets. In which, inventories related to projects such as Khang Phuc - Tan Tao Residential Area with an inventory of VND 6,858.6 billion, Binh Trung - Binh Trung Dong worth VND 4,421.9 billion, Doan Nguyen - Binh Trung Dong worth VND 3,662.3 billion, Khang Phuc - Binh Hung 11 A Residential Area worth VND 1,816.4 billion, Khang Phuc - Phong Phu 2 Settlement Area worth VND 1,810.5 billion, Binh Trung Moi - Binh Trung Dong worth VND 1,374.2 billion, Khang Phuc - An Duong Vuong worth VND 684.9 billion, etc.

According to Agribank Securities Company, Khang Dien House owns a land fund of about 600 hectares in key locations in the eastern part of Ho Chi Minh City. In particular, the short-term prospects come from two projects in cooperation with Keppel, Emeria and Clarita, with a total scale of 11.8 hectares, providing about 200 townhouses and villas, expected to open for sale in 2025 and contribute VND9,000 billion in revenue to Khang Dien House in the period of 2025-2026.

In addition, VCBS Securities Company forecasts that Nha Khang Dien is also implementing The Solina Project (Binh Chanh, Ho Chi Minh City) with a scale of 16.4 hectares, providing about 218 townhouses, villas and 2,000 apartments, expected to be implemented in the period of 2025-2026 and may be launched in 2025.

It can be seen that the accumulation of inventory in recent years has led to Khang Dien House maintaining a long-term cash flow deficit model and having to increase debt to compensate. However, with the preparation for the opening of projects, Khang Dien House is expected to enter a period of cash flow returning.

However, the biggest risk now is the absorption rate of the products that Nha Khang Dien provides, because in the second half of 2024 and early 2025, the real estate market in Ho Chi Minh City shows signs of returning, a series of investors have launched products to the market, but with a modest absorption rate. Therefore, the opening for sale and absorption rate will be an issue that Nha Khang Dien needs to pay attention to in the coming time.

Source: https://baodautu.vn/gia-co-phieu-kdh-quay-dau-truoc-ap-luc-ban-rong-cua-khoi-ngoai-d250390.html