After 15 years of establishment and development, from a company specialized in consulting and intermediary sectors with the initial capital of VND1billion, Hoang Quan today has become one of the strong corporations with 20 affiliated and subsidiary companies and charter capital of more than VND4,000 billion in which the charter capital of HQC is VND2,000 billion.
The easy-to-see achievement of HQC is the expansion of business sectors: from only specialized in real estate consulting and intermediary, today, HQC has become a large-scaled corporations in real estate investment. The real estate projects invested by HQC are throughout 10 provinces/cities nationwide. At the present, HQC is implementing 12 projects in different segments of social housing, office for lease, residences, urban area and industrial parks (Binh Minh Industrial Park and Ham Kiem I Industrial Park). Not only investing in real estate sector, from many years ago, when recognizing that the education is a investment sector that brings both humanity value and added value for real estate, HQC has started the investments into education. Now HQC has implemented 3 universities in which Mekong River Delta University has 100% invested capital of HQC and other universities of Phan Thiet University, Long An Industrial and Economic University, Hoang Quan Economic College, Phan Thiet Intermediate School, Binh Minh Vocational Training Intermediate School, Tay Nam A Intermediate School with the capital contribution from HQC.
In general, Real Estate is still the key investment sector of HQC. In recent years, the market has coped up with many difficulties, many real estate companies have to narrow their operation or even go into bankruptcy. So, How HQC overcomes such difficulties?
It is right that in recent years, especially from 2011 to 2013, real estate market had coped with many difficulties from such factors as policy, market, interest rate etc. , in this general difficulties, each enterprise will have its own strategy to overcome. For HQC, objectively, it is thanks to the supports in macro-policies (a series of policies, starting with Decree No. 02) which help to gradually remove the policy mechanism and real estate is no more considered as non-production sector. In addition, there are also the policies on stabilizing the inflation, interest rate, especially the VND30,000 billion package to help the buyers with the real demands to access the houses.
Subjectively, it is thanks to the combination of the capital advantage and the market, HQC has quickly pioneered in social housing sector, accessed the low-price capital to relieve the clean land (HQC Plaza is the first social housing and example in the South). HQC has also focused in some projects with good market, for example in Can Tho, from the urban area of 300 ha, HQC has focused on 30 ha (6 ha for University and 24 ha for urban area). At the same time, HQC also takes full advantage of the local resources, available resources such as designers, project managers, construction engineers, sales staffs etc. to reduce the cost of the project and speed up the project progress (2 times)
At the end of 2014, HQC reached the revenue of VND 350 billion and the profit of VND30 billion and these figures were not as expected as the plan. However, actually, the output value of HQC reached more than VND 1,000 billion, due to regulations on revenue recording, HQC was not qualified for recording for 2014.
Recently, HQC has been evaluated as the typical corporation in social housing development. However, it is also said that HQC moves to social housing sector to avoid difficulties because actually there is not much profit from social housing sector investment. What is your opinion about this?
It is right that the social housing project will not result in big profit the high quantity and stable profit can compensate for this. For example, a commercial housing projects will give a profit of VND100 billion per year, the social housing projects can give the profit of VND200 billion due to big quantity. The more important thing is that the investment into social housing projects has helped HQC to relieve the land funds to help the corporation to have sustainable growth and development.
In addition, the opinion about profit also depends on the development strategy of each corporation. In terms of commercial housing sector, HQC can not be as developed as other corporations, but in terms of social housing sector, HQC is convenient to be the largest corporation in the South regarding scale, quantity, quality, brand etc. Thanks to this achievement, many provinces/cities such as Dong Nai, Long An, Tien Giang etc. have been actively to hand over the clean land for HQC for building social housing projects.
In addition to real estate sector, how about other investment sectors of HQC such as industrial park, education etc.?
Regarding industrial park sector, in the recent 3 years, this sector also had many difficulties but there are positive signs from Quarter 4/2014 in the general background of economic recovery and foreign investment increase. For HQC, the Corporation has actively changed from annual leasing land into 50-year leasing land (according new land law). In particularly, in Binh Minh Industrial park, then changing from annual leasing land into 50-year leasing land, HQC can deduct the land use money of VND 86 billion (previously, the company had to pay for compensation). In parallel with the TPP negotiation route, it is expected that the demand for industrial parks will increase considerably. It is planned that in 2015, the occupation percentage at two industrial parks of HQC of Binh Minh and Ham Kiem I will reach 50%.
Particularly for education sector, HQC considers Education is the sector which not only brings the super-profit but also the sector with humanity value while creating the profits to other sectors, especially real estate sector. The reason is that for real estate, education is the high-ranking and the most helpful service. Recently, the revenue from tuition of the universities/colleges/schools has been used by HQC to invest into the physical facilities, therefore, the actual profit is not high.
The most benefit of HQC is that thanks to the universities formed on university urban areas (such as Mekong River Delta University Urban Area in Can Tho), it creates the added value to the real estate sector to promote the product selling and result in higher profit. As planned, in 2015, HQC will invest additionally VND150 billion for Mekong River Delta University to increase the total investment capital for the project to VND250 billion. In the next three years, it is expected that the education sector will bring the basic profit to the corporation.
Recently, many real estate companies with good financial capacity have taken the opportunity of the market to buy back many projects of other companies. How is this activity at HQC?
For many years ago, HQC has enhanced the M&A activities. Up to now, HQC is one of the companies with hundreds of hectors of clean land with sufficient legality in different provinces/cities which are available for implementation.
Can you give examples about such land funds?
The total clean land fund in different cities/provinces such as Nha Trang, Binh Thuan, Dong Nai, Tay Ninh, Vung Tau, Long An, Tien Giang, Vinh Long, Can Tho which is under the ownership of HQC is about 400 hectors. Particularly in HCMC, the projects invested by HQC are located in many different districts such as District 2, Hoc Mon, Binh Chanh, Binh Tan, District 7 etc. with the clean land fund of sufficient legality of approximate 20 hectors. HQC Plaza Project has 1,735 apartments in which 1,350 apartments were sold and more than 800 customers were disbursed or approved by the bank for disbursement. In 12/2014, HQ1, HQ2 blocks were roofed and it is planed that on 28/03/2015, HQ3, HQ4 blocks will be roofed to hand over the apartments to customers since Quarter 4 this year.
HQC Hoc Mon has nearly 600 apartments in which 170 apartments were sold. The project has constructed to the 5th floor and we will hand over the apartments to the customers in Quarter 4 this year. At Grandora Tower (Cheery 1), we also sold out all apartments and will handover the apartments to the customers in this September. Cheery 2 in District 12 will be completed by HQC to handover the apartments to customers this year. In addition, HQC Can Tho- Phase 1 also sold 276 houses and handed over more than 200 houses and the phase 2 of the project has been started. Especially, in the last year, HQC bought back 100% of HQC Royal Tower from Indochina Real Estate Company, the coarse part of the project is nearly completed and after buy back, HQC will continue the construction and it is planned to complete in Quarter IV this year.
As mentioned above, HQC now has all factors of “right place, right time, right man” to develop, therefore, in 2015, what are outstanding achievements planned for HQC?
2015 will the year that HQC will surely have the outstanding achievement in development. This confidence is firstly from the stable macro policy, strongly recovered market and advantages that HQC owns. In particularly, in 2015, HQC will set up the objective for the revenue of VND3,200 billion, profit of VND320 billion (10 times higher than 2014), dividend of 8%. It is planned that particularly Quarter 1/2015, the profit will reach at least VND30 billion.
This plan is totally feasible when a series of projects of the Corporation such as HQC Plaza, HQC Hoc Mon, HQC Royal Tower, Grandora Tower, Mekong River Delta University, Binh Minh Industrial Park, Ham Kiem Industrial Park are under the handover and strong investment attraction. In parallel, the revenues from 18 member companies will also help HQC to easily reach the plan.
In addition, HQC will also submit to the Board of Shareholders to increase the capital to two times to VND 4,000 billion in 2015. The capital increasing method is issuing the shares to offer to the existing shareholders and domestic and foreign partners. At the present, HQC is under negotiation with many strategic investors (foreign). The minimum amount that HQC can sell to strategic investors of around USD20 million.
This capital increasing plan is also within the investment and development route prepared carefully by Board of Directors of the Corporation in terms of operation, business strategy and opportunities to aim at the sustainable development for Hoang Quan Corporation.
Source: Real Estate Investment Newspapers