Expected profit from property sector to be less than half of total in next five to ten years.
Shareholders at Vincom’s annual general meeting on April 23 posed questions about the group recently strengthening its investment in a number of different sectors, including retail, ports, and agriculture, rather than just focusing on its core business of real estate.
In response, Vingroup Chairman Pham Nhat Vuong confirmed that its investment has moved away from simply real estate. It targets to create “comprehensive ecological value” for its clients in different fields, including healthcare, education, resorts, farming and shopping, and establish competitive advantages compared to other businesses. “We will endeavor to do well in all sectors,” Mr. Vuong said. “We should identify other potential sectors to invest in rather than focusing on only one.”
Regarding agriculture, Vingroup targets to provide fresh products to the market and handsome business results will be demonstrated over the next 20 to 30 years. “We have only invested in several thousands hectares of land,” he said. “The investment, however, will demonstrate to farmers and other businesses that there is still profit to be made by growing fresh produce.”
In terms of Vingroup’s participation in the equitization of infrastructure projects, Mr. Vuong saw long-term potential in such projects. “If done well we will have opportunities for tremendous growth,” he told the meeting.
In real estate, he said it is right time for the group to implement projects as the market is showing positive signs of recovery. “We only build products in accordance with actual market demand,” he said.
Under the group’s plans, the expected proportion of profit from property will account for less than 50 per cent over the next five to ten years. “We have carefully considered each investment decision to ensure the greatest benefit for the group,” he emphasized.
In 2015 Vingroup targets reaching net revenue from production and business activities of VND30 trillion ($1.39 million), higher than last year’s revenue of VND27.7 trillion ($1.28 million), and after-tax profits of $3 trillion ($138.9 million), lower than last year’s $3.7 trillion ($174.8 million).
- Pham Nhat Vuong