Company Quarterly Earnings Update – KBC VN – 2018 Q4

Summary of the 2018 results of Kinh Bac City (KBC VN) 

2018 results: highlights
  • KBC’s net revenue nearly doubled to VND 2,506bn in 2018 thanks to strong sales of the industrial park (IP) development business. The IP development business achieved record high revenue of VND 2,035bn, up by 184.0% yoy. During the year, KBC sold a total 110.4 hectares, up by 164.2% yoy.
  • KBC’s gross margin improved to 58.5% in 2018, up from 51.6% in 2017, thanks to the gross margin improvement of the IP business. The company’s operating profit jumped by 145.4% yoy, but net profit only rose by 27.9% yoy to VND 747bn: KBC had a one-off financial gain of VND 322bn from selling assets in 2017, which did not repeat in 2018.
  • Cash and cash equivalents accounted for 1.3% of total assets. Financial leverage was low with a D/E ratio of 0.46x and a D/A ratio of 0.21x. The book value of all operating projects was VND 8,593bn, accounting for 51% of total assets.


  • Vietnam is one of the most obvious destinations to replace China as the world’s work bench. KBC’s IP development business is likely to benefit from the expected continued solid FDI inflows into Vietnam in coming years.
  • Prospects for KBC’s residential development business are also bright. KBC’s residential land is located in Bac Ninh and in Hai Phong, the two fastest growing cities in the North of Vietnam: Housing demand in these areas is expected to grow solidly in order to meet the needs of the rapidly rising labor force.
  • Though KBC’s remaining land bank is huge, the company needs one or two years to develop new IPs, while its existing IPs are shortly running out of available sellable area. The Phuc Ninh Urban Zone (UZ) should be the main driver of the company’s growth as we expect net profit to increase by 22.6% yoy in 2019 and by 21.8% yoy in 2020.



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