According to the General Statistics Office (GSO), the construction industry grew by 8.7% in 2017 over the year before, contributing 0.54 percentage points to the GDP growth, ranking third among industries with greatest contributions to the GDP growth.
Many contractors reported a two-fold increase in revenue and profit in 2017. Cotecons, for example, saw revenue increasing by 45% (VND27.153 trillion) and post-tax profit up by 56% (VND1.653 trillion).
As for Hoa Binh Corporation, the figures were 49% and 51.5%, respectively.
Analysts predicted that the construction market would grow more slowly in 2018 because of new regulations which tighten credit flow into the real estate sector. However, large construction firms have won bids for big projects.
The total value of the contracts Hoa Binh has signed are VND20.48 trillion, mostly projects on multi-story buildings, hotels and resorts. In the first four months of the year, it received contracts valued at over VND6 trillion.
Ten years ago, Hoa Binh built the tallest building in Vietnam and is now implementing a ‘super project’ in accordance with the US standards. It is also the EPC contractor for the Saigon Centre (second phase) project.
At the 2018 shareholders’ meeting last April, the plan on issuing 30 million shares to raise VND1.4 trillion worth of funds was approved. The amount of money will be used to supplement working capital and buy more equipment for its core business field.
Meanwhile, the business targets that Cotecons, one of the two largest contractors at this moment, has set for this year seem to be more modest than last year.
This is attributed to fewer contracts signed in the first five months of the year in comparison with the same period last year which included many small projects.
On the threshold of Cotecons 2018 annual shareholders’ meeting held on June 2, the continued decrease of its share prices was a hot topic of discussion among investors.
To maintain its competitiveness, Nguyen Ba Duong, chair of Cotecons, said it would join forces with subsidiaries, associated companies, partners and satellite companies.
As for small and medium contractors, they have more competitive edge than large contractors in low- and mid-end housing projects.
In the housing market, analysts said that the supply in the high-end market segment is plentiful. Many developers in the high-end market segment have begun to slow down and are seeking opportunities in lower-end segments.