Classifying 2018 business plan of listed companies

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The steel industry is forecasted to face many difficulties in 2018.

Confidence

According to experts, the real estate market is forecasted to continue its sustainable development in 2018. Therefore, many real estate businesses enter 2018 with optimistic psychology and set a high growth target. Specifically, Hoa Binh Construction Corporation (HBC) has set a revenue target of VND 21,000 billion in 2018 and an after tax profit of VND 1,100 billion, up 31% and 33% respectively from 2017. From the beginning of 2017, Hoa Binh has won the bid and implemented many large-scale projects such as the Resident Complex PMR Evergreen projectwith contract value of more than VND 1,000 billion; the Times Garden Vinh Yen project valued at VND 2,066 billion; Ha Long Bay Sheraton Hotel project valued at VND1,650 billion; the Riviera Point project valued at VND1,084 billion; and the Aeon Mall Ha Dong project (Aeon mall Vietnam) valued at VND2,053 billion. Accordingly, the Corporation’s revenue in 2017 was estimated at VND16,500 billion, surpassing 5% of the year plan and the after-tax profit may exceed 15% -20% of the plan (VND 828 billion).

Thu Duc Housing Development Corporation (TDH) has set many big plans in 2018. Specifically, in 2018, TDH plans to focus on expanding land funds in major cities in the country, developing office and apartment projects in central districts of Ho Chi Minh City and enhancing cooperation with domestic and foreign partners to develop complex projects including apartments, offices and commercial centres. In addition, TDH will concentrate on developing medium-scale real estate with key projects in 2018 such as Tocontap-TDH apartment building with 225 apartments, S-Home Binh Chieu with 216 apartments, Centum Wealth Apartment Building with 518 apartments and Long Hoi City 142 platforms

In 2017, TDH's revenue was estimated at VND1,947 billion, surpassing 43% of the plan and up 70% from 2016. Its after-tax profit was estimated at VND142 billion, surpassing 9% of the plan and up 31% from 2016. This result is due to the TDH sales with many projects ranked top of the market. Specifically, the number of sold products increased sharply from the fourth quarter of 2016 when the new projects were open for sales, such as Binh Chieu, 4 hectare low-rise building (phase 2) with 145 platforms sold out after only one month of sales. TDH-Tocontap sold out all 40 platforms as soon as the sale was opened and the products in a series of projectssuch as, TDH-Truong Tho, TDH-Phuoc Binh and Long Hoi City have almost sold 100%.

Meanwhile, in the banking sector, VPBank targets in 2018 a after-tax profit of VND 4,015 billion, up over 68%, a net profit of VND8,528 billion, up 48%, higher than expected profit in 2017 (46%). Vincom Retail (VRE) also raised its net sales to more than VND8,000 billion and net profit to over VND3,300 billion, a significant increase compared to the target set for 2017. Also in the retail segment, Mobile World Co., Ltd targets in 2018 a revenue growth of VND 86,390 billion, up 36.5%; an after-tax profit of VND2,603 billion, 18% higher than the 2017 target. Similarly, Ocean Hospitality and Service Joint Stock Co (OCH) also plans a pre-tax profit of VND 89 billion in 2018, three times higher than the plan in 2017.

Caution

Contrary to the confidence of real estate, retail and banking companies, many companies plan to reduce profit compared to 2017. Son La Sugar Company (SLS) set the target of total revenue 2018 of VND 798 billion, up 46% over the previous year. However, its target of after-tax profit drops sharply by 46% to VND55.5 billion

The leadership of SLS said that in 2018, the implementation of international economic integration is one of the great difficulties for thesugar industry in general and Son La in particular. Accordingly, the development of sugarcane material is the key factorwhich decides the survival of the company. The company also promotes research and development of products with high quality in order to increase value and reduce production costs

Another sugar company is Kon Tum Sugar Company (KTS). It also plans to drop significantly when total revenue is expected VND 453.2 billion, net profit of VND 24.1 billion; down 54% and 43% respectively from the previous year. The leadership of the KTS also said that the 2017-2018 season is a very difficult period when the raw material area in Kon Tum is narrowed due to the urbanization process and the fierce competition of other crops as well as the small and fragmented production habit of local residents.

According tothe2018 roadmap, import duty of sugar from ASEAN countries will be cut to 0% instead of the current 30%. To this moment intime, the amount of imported sugar from the ASEAN countries such as Thailand will impose high pressure on Vietnam’s sugar industry. Sugar companies have to take measures to reduce production costs, reduce price and improve the quality of new products to survive after 2018.

Similarly, Sao Ta Food Company (FMC) plans in 2018 to reach an after-tax profit of VND 120 billion, down 4% compared to 2017. Post Insurance (PTI) also expects that its net profit in 2018 will be sharply down by 24%, to VND 110.8 billion.

The big steel company Hoa Sen Group also set a net profit target of only 1% in the financial year 2017-2018, reaching about VND 1,350 billion. According to HSG, factors such as fluctuations in steel price, the trend of increasing trade protective measures of world’s large markets to protect their domestic production and the enhancement of productionby companies in the industry will be unpredictable for the company’s business.

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In the fiscal year 2016-2017, HSG realized a net sales of VND26,149 billion, a year on year increase of 49% and a net profit of VND1,332 billion, down 19%. According to HSG, the decrease in after-tax profit was due to continuous fluctuation and unpredictability in price of raw material steel in the market continuously from the beginning of the year. This affected the purchase of the materials, financial costs and capital for production.