On the morning of October 19 at Coteccons headquarters, Coteccons Construction Joint Stock Company (HOSE: CTD) held the 2024 Annual General Meeting of Shareholders.
“Thank you for taking the time to join us here at the AGM. Last month, we held a shareholders’ dialogue, which enjoyed the participation of nearly 1000 guests across more than 4 hours of discussion on various agenda, intending as an open and transparent disclosure of information with shareholders”, Mr. Bolat Duisenov – Chairman of the BOD commenced the General Meeting.
“We would like to present a challenging yet ambitious target for 2025 at today’s General Meeting of Shareholders (AGM)”, Mr. Duisenov announced.
“We wish to be recognized as an Industry Leader”
Mr. Bolat Duisenov – Chairman of Coteccons Board of Directors began the General Meeting with an impressive remark: “From my personal viewpoint, Coteccons, who has undergone 20 years of trials, and who has accumulated a wealth of experience, energy, confidence, and a sound vision, is at its peak today. As part of the team, I would like to affirm that we are ready to take the next big step: securing recognition as an Industry Leader.”
For Coteccons, taking on the mission of Industry Leader goes beyond market share, rather setting sight on a much larger and more meaningful concept. Coteccons wants to become one that sets trends, leads the pack, innovates, and brings global solutions into practice in Vietnam.
We must become an ambassador and the front line in urging the construction industry forward, building real values for future generations.
We will not relent in proposing difficult problems and questions for ourselves. Over the past 3-4 years, Coteccons has grown on average by 20-30% per annum. Now, a question for Coteccons’s board of executives to work on is the path towards sustaining this rate of growth in the next 4-5 years.
Our focus is on diversifying our business portfolio. This would enable the company to develop sustainably in the face of the current global backdrop and market fluctuations, and to ultimately obtain synergy from these different business segments.
How may Coteccons discover and bring new standards in technology, safety, and construction into practice, then? I believe it is through being a pioneer in applying higher standards in Vietnam’s construction industry.
We also believe that every organization and enterprise possess a compassionate heart. And with this in mind, as a construction company that values humanity, we always aim for the safety of our workers and employees.
We welcome challenges, and care deeply for the environment, which has made ESG standards among our focal points.
Coteccons aspire to become a leading construction company, not only in Vietnam but across the world as well.
We must endeavor to construct a working environment which nurtures and serves as a launch pad for talents, so that those who have come to Coteccons may share our goal of becoming market leaders.
“No increase in provisions and bad debt”
Mr. Tran Ngoc Hai – Deputy CEO, Chief Commercial Officer beamed with pride: “Following the call of Chairman Bolat, we accepted the great challenge of becoming a leader. On January 27, 2024, Coteccons was nominated for the Outstanding Emerging Unit award at the WeChoice Awards 2023, where we took pride in having surpassed many large B2C companies in the market. Thousands of Coteccons engineers are always deeply aware of their responsibility to society and the community.”
2024 is considered a year of outstanding development for Coteccons. This award serves as one of the motivations for the team to work tirelessly towards bringing results in 2024. Maybe numbers will help to illustrate our story more vividly.
Last year, Coteccons’ revenue reached more than VND 21,000 billion, with gross profit at 713 billion, a YoY increase of 97.2%. Profit after tax in 2024 reached more than VND 310 billion. A backlog of VND 20,000 billion was deferred to 2025.
“Given Coteccons’s 2,000 engineers and 500 managers, the revenue distributed towards engineers totaled to more than VND 13 billion/year at sites. This is a very impressive figure,” Mr. Hai expressed.
Also in 2023, Fortune Southeast Asia published its first list of the 500 largest companies in Southeast Asia, with Coteccons included, representing Vietnam’s construction industry. This is a practical demonstration of market leadership and ever-transparent business results.
Recently, Coteccons has recorded a yearly recovery in its post-pandemic revenue with compound growth in 2024 at 30%, while the average growth across the entire construction industry measured at 7-8%. This proves that Coteccons is on a different trajectory, with access to more opportunities compared to the rest of the market.
Our aim is to set on a 20-30% per annum growth for the next 4-5 years, which should push the team to higher levels of efficiency and innovation.
In 2025, we set a net revenue target of VND 25,000 billion and after-tax profit of VND 430 billion, an increase of 19% and 39%, respectively. New contracts totaled over VND 28,000 billion, at gross profit margin of 4%. An updated projection for Q1/2025 expects Coteccons to achieve a recorded revenue of VND 4,700 billion, with new contracts valued at VND 8,559 billion. These numbers will enable huge opportunities for Coteccons in 2025.
10 years ago, Coteccons was synonymous with urban high-rise buildings and resort centers in Hoi An, Ho Tram, etc. However, after the pandemic, we began to observe an inflow of FDI into Vietnam. Coteccons thus responded by shifting the focus onto the industrial sector and secured the lead with total revenue in 2024 accounting for 45%. FDI projects that Coteccons have implemented include LEGO, Suntory PepsiCo, etc.
The larger growth target has necessitated us to diversify our revenue basket accordingly. In 2025, we aim to maintain growth in core segments, as well as gain access to new categories.
In terms of infrastructure, Coteccons has actively built rapport with government agencies and departments to obtain more opportunities at learning about prospective projects. With more than VND 900,000 billion being allocated by the Government towards expressways, the metro, social housing, etc. it is evident that the market’s pie is immense. We hope that, along with our participation in public investment projects, there are opportunities for the Coteccons DNA to be carried over as well, especially in terms of construction quality, progress, operations, etc.
Regarding foreign construction projects, there are two approaches currently being adopted at Coteccons. The first approach being a continuation of a former domestic partnership when they expand internationally. A joint international expansion is deemed safe due to the established mutual understanding.
The second approach consists of an independent effort by Coteccons to search for potential markets; in which we have the option of partnering with a local, or a globally experienced company.
These expansions may require another 4-5 years, but a solid foundation is already being worked on, slowly but steadily.
Flourishing these business opportunities will enable our revenue to be more sustainable, reducing susceptibility to domestic market fluctuations.
Regarding financial health, Coteccons remains transparent, and strives to always provide prompt updates to shareholders on figures that has an effect on the company’s business operations. Given positive market signals, we believe that by 2025 Coteccons will be able to improve its debt recovery, risk management, and demonstrate clearer actions for its investors.
By 2025, Coteccons is confident that there will not be an increase in provisions and bad debts, and instead a recovery of VND 100 billion of debt from previous debt provisions.
Customer analytics solutions have returned lower risks and offered a deeper level of understanding of Coteccons to customers, to reduce the risk of bad debts.
Coteccons’s message on striving for core values with transparency and integrity is integrated into our foundation for policies, subcontractors, suppliers, etc. We hope to enjoy the like-minded efforts of subcontractors in ensuring us ensure the safety and quality of the projects.
Becoming a “human-hearted” enterprise, and the 5 actions towards making a difference
Ms. Nguyen Trinh Thuy Trang, Deputy CEO, Chief Operating Officer of Coteccons, shared the different priority strategies implemented in 2024 with the aim of becoming an “Industry Leader” in the construction industry. Specifically:
- Constant efforts to improve safety and security standards, and to trailblaze in the application of AI technology to optimize performance, ensuring safety and security at construction sites. With a tailor-made pioneering track record in AI and AR technology, Coteccons has managed to apply facial recognition, hazard warning, and asset management solutions through Machine Learning, facilitating extraordinary differences in the construction industry.
- In Construction technology, Ms. Trang also illustrated the Company’s advanced and outstanding construction techniques through unprecedented, complex, dangerous, and technically difficult work items from Coteccons’ young engineers in 3 examples: Lotus Tower project with stringent requirements set out for the construction of 5 complex basements, while avoiding affecting the metro line and staying within permitted displacements; Ecopark project with 3.5m thick transfer slabs and a 30-34m high atrium; or the LEGO MEP system, etc. Mr. Trang also shared the differences investments and upgrades in BIM have made towards the Company’s operations.
- In terms of human resources, Coteccons applies its “teal” approach in conjunction with the OWN IT culture to promote the spirit of self-management and integrity in working towards progressive goals in each key personnel. This ideology has greatly contributed to leading the company to its current achievements. The second restructuring in 2025 will help Coteccons to seek out and develop talent. According to Ms. Trang, in addition to business performance indicators, the company will focus on developing the happiness index and personal development of its employees.
- Coteccons also emphasizes the importance of sustainable development within the ESG framework, accompanied by specific measurable actions on the environment, people, and governance.
- Last but not least, focus on strong branding, through B2B2C thinking, projects and corporate culture-based narratives.
Prepare for the big game
Would the Company be able to share the estimated gross profit margin in the 2025 fiscal year business plan so as to achieve an after-tax profit of VND 430 billion?
Mr. Tran Ngoc Hai – Deputy CEO, Chief Commercial Officer: “According to the business plan, company expects a gross profit of approximately VND 1,100 billion, with profit margin at 4.4% and profit after tax of VND 430 billion. This plan has been carefully considered by Coteccons.”
Coteccons’ long-term debt has decreased sharply by the end of 2023 – 2024. Does Coteccons have plans to issue bonds or borrow long-term debt to boost performance next year?
Mr. Bolat Duisenov – Chairman of Coteccons: “Our approach is a conservative one, but which boasts confidence in our financial health. It will enable us to develop sustainably in the long run when faced with market fluctuations.
Regarding long-term debt, we have, since 2021, shared our figures; our current credit rating is very good, with all our debts paid within their terms.
In the short run, we have no plans to issue additional bonds since our financial situation and the existing resources accumulated are sufficient for upcoming ambitions, as well as business goals for the next 5 years. As mentioned, Coteccons has recently upgraded its credit rating to BBB+. Our equity is currently stable. And with Coteccon’s current revenue, we believe that in the future bonds will serve as a supplementary financial resource for us to get ready for new opportunities or investment in new categories.”
What are the Company’s bidding plans for 2025?
Mr. Tran Ngoc Hai – Deputy CEO, Chief Commercial Officer: “We aim for a compound growth of 20-30% per annum, which poses a challenge. Therefore, Coteccons’ 2025 plan is to win bids of more than VND 28,000 billion, with a portion of won bids deferred to 2026 to ensure continued growth. Up to now, in the first quarter of 2025, Coteccons has met 30% of the 2025 bidding plan.”
Is the reappointment of Mr. Vo Hoang Lam before the AGM due to unfulfilled business targets? 
Mr. Vo Hoang Lam – Deputy CEO, General Director of CTD Business Unit 01: “I would like to reestablish that Coteccons’ business results in 2023 reached VND 21,000 billion, exceeding targets by more than 30%; all profit indicators were superior to the targets approved by the previous AGM.
Currently, all large key FDI projects are implemented by Coteccons. In Vietnam’s market, Coteccons stands firmly at the lead of the construction industry.
The recently announced personnel arrangements are related to Coteccons’ strategy for the 2025-2029 period. In this, we are to take the lead in our core segment, and grow in other categories, increasing our recognition in the international market, and aspiring to be recognized as an Industry Leader. This is a journey that requires the organization to be structured in the right direction.
The BEHS – Covestcon consortium has applied for the implementation of Thanh Phu urban area (Long An) for the second time; if the bid is successful, what is the planned developer’s capital contribution and Coteccons’s benefit ratio? For the new Land Law, are the land use expenditures higher than the initial estimates?
Mr. Bolat Duisenov – Chairman of Coteccons: “This is a strategic partner of Coteccons. Recently, we have taken on the role of general contractor for some of their projects. This is the first time we have expanded the scope of cooperation in our partnership. In addition to being the general contractor, we also assume the role of developer. Both sides are serious about this project. At Coteccons we adopt a customer-centric approach and strive to always provide the best support. Both sides expect to deliver a project that we will all be very proud of.”
In 2024, the FDI segment will account for 25% of Coteccons’ total revenue, while the industrial segment will take up about 50%. What is the company’s plan to catch the wave of FDI influx into Vietnam? To be able to increase FDI contribution and welcome big developers?
Mr. Bolat Duisenov – Chairman of Coteccons: “About 3 years ago, Coteccons began to shift its focus onto the industrial construction segment. Before which point, Coteccons was mainly known for civil and commercial projects. Currently, Coteccons is the leading contractor in construction of factories in large industrial parks across Vietnam.
Our new strategic directions, especially in 2025, are akin to sowing seeds; to first lay the foundation in areas such as infrastructure development, international markets, etc. Essentially a replication of our shift towards the industrial segment three years ago.
Hopefully in approximately 2-3 years, at the General Meeting of Shareholders, we will have achieved more impressive numbers to share with our shareholders.
We always place emphasis on the strategy of diversifying revenue, product categories, and segments that Coteccons offers. We will be equipped with a variety of different business units, which serve as the foundation for the company to secure a stable financial footing for sustainable development.
Regarding the goal of attracting big names in FDI, I believe one swallow does not make a summer; it instead should be a targeted and coordinated effort by the Government to attract investments towards industrial parks. I believe Vietnam will furnish suitable policies in this regard. Foreign investments will only come once we have developed an attractive and prospective business environment, equipped with a skilled workforce that is accessible at industrial parks along with other utilities. Then, construction companies such as Coteccons, along with logistics firms with warehouse capacity will play our part in FDI attraction as well.
When it comes to construction, we always stand ready to respond with our capacity portfolio. If given the chance to present ourselves, Coteccons will certainly be able to clear up any doubts foreign investors might hold. Coteccons has faced extraordinarily demanding projects and tough challenges, which have all been well surmounted.”
The company unexpectedly added a dividend proposal. Does this first dividend since 2020 imply any particular message?
Mr. Bolat Duisenov – Chairman of Coteccons: “We would like to express our sincere thanks to shareholders for trusting the company. During the period 2020 – 2023, as part of the construction industry, the company was not immune to the heavy impacts and fluctuations from the economy. This is the stage where we, together with shareholders, plan and develop long-term strategies for the company. We must fully acknowledge the importance of investment and the optimal timing for the company’s shared vision. For the above reasons, we have concluded that this is the right time to pay dividends.”
Were there any new projects that incurred bad debt in 2023? And will bad debt pressure continue to be high in the coming years? Please explain why for fiscal year 2024, the company initially planned to allocate VND 180 billion for contingencies, however, by the end of the year, this figure increased to VND 305 billion?
Mr. Tran Ngoc Hai – Deputy CEO, Chief Commercial Officer: “In 2024, we have prepared additional provisions for securities, but for previous bad debts. We, with our responsibility and role, have continued to make provisions in 2024. However, we have a debt collection committee that regularly works with customers and investors on projects they are facing difficulties with. The two parties have a plan to pay. Recognize signs that the market is improving. These projects have a legal basis; therefore, these projects will be re-implemented in time.”
Our targets for 2025 are to maintain the provision value and collect VND 100 billion. This is the amount we have planned for from the project. Hopefully, the numbers will be reported to shareholders at the next meeting.”
Mr. Vo Hoang Lam – Deputy CEO, General Director of CTD Business Unit 01: “In 2021, 2022 and 2023, Coteccons was financially prudent, which allowed us to confidently establish provisions to brighten the company’s financial picture. Later, most of our customers are from the FDI sector, and the possibility of debt and bad debt was significantly reduced. Due to the provisions made earlier in the previous year, we are seeing positive signs this year that we can collect both the debt and the large provisions. I believe that in 2025 everything will go in the positive direction, not the other way around.”
What is the opinion of the Board of Directors on the strategy of “standing on the shoulders of giants” when starting FDI projects in Vietnam as well as other projects abroad with your partners?
Mr. Vo Hoang Lam – Deputy CEO, General Director of CTD Business Unit 01: “It is the pride when a Vietnamese enterprise participates in large projects of international customers, with high technical requirements, world standards, etc. That story arises a question, why don’t we accompany the customer and step into the foreign market? Of course, speaking of ambition and challenge, Coteccons takes pride in participating in projects and gaining recognition. We appreciate the customers who have offered Coteccons the opportunity to expand into overseas markets.
It is also expected that FDI customers investing in Vietnam will consider Coteccons first, based on the projects we have done. And most importantly, we must maintain our professionalism so that any customer investing in Vietnam will select Coteccons as their first business.”
Mr. Bolat Duisenov – Chairman of Coteccons: “Our international customers are also global customers. In addition to projects in Vietnam, they also implement projects in other countries such as India, the US, etc. So, we hope to follow in their footsteps.
As LEGO is opening a factory in Virginia (USA), we have also had conversations with this customer. I believe the timing is also right for us to open an office in the US. This office is where we liaise with customers like LEGO. However, regarding this issue, we need to invest more time in research before revealing more details.”
How much is the remaining backlog value of Foxconn, Pepsico, etc. Projects?
Mr. Tran Ngoc Hai – Deputy CEO, Chief Commercial Officer: “I cannot disclose the contract value in detail due to our commitment to confidentiality with customers. These are FDI customers that have had the opportunity to win bids and successfully implemented them in the past. The current FDI customer backlog that can be carried over to 2025 is 40%.”
Please update the progress of the launch of THE EMERALD 68 real estate project with Le Phong. When is the expected delivery and profit?
Mr. Bolat Duisenov – Chairman of Coteccons: “We are first and foremost a construction company, and we do not plan to become a real estate developer. Our principle is always to emphasize our customers and support them. At the point where we consider ourselves as being able to take on a role other than a construction contractor with our clients, we will consider doing so.”
“With this project, we are honored to work with a reputable real estate developer in Binh Duong. In terms of progress, we have completed the procedures and construction permits. In terms of the construction contract, we are on schedule. This project has a nice overview, with three basements and is nearing completion. The quality is assured as it belongs to Coteccons. It is in an ideal location, from Coteccons building (in Ho Chi Minh City) it take 20 minutes, right at the gateway to Binh Duong.
Regarding the opening sale, we may not have the license to open for commercial sale until next year. We are very confident about the success of this project.”
Coteccons shares have been trading at P/B below 1.0 for a long time. Does the company have any plans to further strengthen investors’ confidence in the business situation?
Mr. Bolat Duisenov – Chairman of Coteccons: “I have only one answer, this is now the time to buy stocks. Looking at the market, we see not only the real estate and construction industry but also the construction materials industry, which is gloomy with many challenges and difficulties.
Coteccons continues to target compound annual growth (CAGR) of 20-30% per year and if there are not too many variables, we can achieve the target in the next 4-5 years.
The business results, quality and capacity of the company depend entirely on the management board and the Board of Directors. The stock price is in the hands of shareholders and the shareholders’ trust in Coteccons.”
Kusto has committed to investing 200 million USD in the next 4 years. What is the investment process, through buying shares or investing with Coteccons in projects?
Mr. Bolat Duisenov – Chairman of Coteccons: “Kusto is a major shareholder of the company. This is a joint investment. This cooperation is not just a single project, as we wish to build a model where both sides cooperate and seize opportunities together.
The portfolio is as close to the construction industry as it is to manufacturing or high-tech. We have had many discussions with Kusto, and Kusto leaders all agree that this is the right time to invest in Vietnam with many advantages. I believe the cooperation will bring values and benefits to both sides.”
