Hoang Quan Real Estate (HQC) aims to increase profits 7 times despite poor business in 2022
The sluggish real estate market in 2023 has made many businesses in this industry group not dare to "speak loudly" about their business goals for the year. However, Hoang Quan Real Estate (HQC) still boldly set a revenue target of 1,700 billion VND, with real estate revenue accounting for 650 billion VND and real estate investment cooperation revenue accounting for 1,050 billion VND.
Regarding the profit plan, the company expects after-tax profit to be 140 billion VND, 7.4 times higher than the actual profit in 2022.
Explaining the high revenue target and after-tax profit 7.4 times higher than in 2022, Hoang Quan Real Estate said: “2023 will be limited for many real estate speculative enterprises, but it will be an opportunity for enterprises that know how to exploit. In 2022, the Ministry of Construction completed its tasks and submitted to the Government the Project to invest in building at least 1 million social housing apartments for low-income people and industrial park workers in the period 2021 - 2030.
With poor business, only completing 11% of the 2022 plan, where does Hoang Quan Real Estate get the confidence to increase its profit plan by 7.4 times? (Photo TL)
In addition, the implementation of a preferential credit package of VND 120,000 billion with a lending interest rate 1.5 - 2% lower than the average lending interest rate of commercial banks, applicable to both investors and buyers of social housing and housing for low-income people, will contribute to removing bottlenecks in the real estate market as well as creating momentum for the Company's development.
Is this overconfidence because even with the above support policies, it cannot be ignored that Hoang Quan Real Estate had a poor business year in 2022, completing only 11% of the annual profit target.
Revenue plummets, profit mainly from financial activities, completely breaking the 2022 plan
Recorded at the end of 2022, Hoang Quan Real Estate's revenue only reached 35.2 billion VND in the 4th quarter, down 52% compared to the same period last year. Cost of goods sold also decreased sharply, gross profit reached 21.1 billion VND, slightly up compared to 20.3 billion VND in the same period.
In the final period of 2022, despite a sharp decline in revenue, Hoang Quan Real Estate's operating costs remained high. For example, sales expenses only decreased by 23.6% to VND 4.2 billion. Business management costs not only did not decrease but also increased from VND 10.6 billion to VND 11.7 billion, an increase rate of 10.4%. Profit after tax was only recorded at VND 2.1 billion in the fourth quarter, showing that the decline in profits has not shown any signs of stopping for Hoang Quan Real Estate.
Overall in 2022, Hoang Quan Real Estate's revenue reached VND 275.9 billion, a slight decrease compared to 2021. Profit after tax also reached VND 18.1 billion, 4.3 times higher than the same period.
However, one thing to note is that this profit mainly comes from financial business activities and the reduction of interest expenses during the period. Compared with the business target set for 2022, it can be seen that Hoang Quan Real Estate has only completed 25.4% of the revenue plan and 11% of the profit plan for 2022. This is enough to show how bad Hoang Quan Real Estate's business results in 2022 are compared to previous forecasts.
Assets plummeted by VND2,000 billion in the year, investment in joint ventures and associates decreased by nearly half.
In 2022, Hoang Quan Real Estate's total assets were recorded at VND 7,236.7 billion, down about VND 2,000 billion in just 1 year, equivalent to a decrease of 22.4%.
The balance sheet shows that the decrease mainly comes from the index of long-term financial investments, specifically investments in associated companies and joint ventures, decreasing from VND 4,378.1 billion to only VND 2,368 billion, equivalent to a decrease of 45.9% in just 1 year.
In addition, the decrease in assets also corresponds to HQC's divestment from Hoang Quan Binh Thuan Real Estate Trading and Service Consulting JSC with an investment value of VND 1,648.9 billion and the investment in Simon Joint Stock Company with VND 360 billion.
Regarding the capital structure of Hoang Quan Real Estate, payables also decreased from VND 4,986.2 billion to only VND 2,878.1 billion, equivalent to a decrease of about 42.3% compared to the beginning of the year. In particular, the payables to other organizations and individuals decreased from VND 1,542.4 billion to only VND 414.1 billion. Owner's equity did not fluctuate much, reaching VND 4,358.6 billion.
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