Coteccons sees robust opportunities as Vietnam’s urbanization, infrastructure development accelerate

Coteccons engineers will take on more projects and new opportunities over the next 10-20 years as urbanization in Vietnam accelerates, Bolat Duisenov, chairman of Vietnam's major builder Coteccons (HoSE: CTD), said on Saturday.

Vietnam is undergoing rapid urbanization, with the rate reaching 40% in 2024, compared with China’s 66% at a similar stage, the chairman elaborated at a dialogue with shareholders.

The rate is projected to rise to 50% by 2032, supporting expectations that Vietnam’s urbanization will keep accelerating over the next two decades, Duisenov said.

Urbanization in Vietnam entails not only the growth of cities but also the expansion of roads, railways, airports, schools and hospitals, he said, adding that to envision the country in 10-15 years, investors can look to China as a preview of Vietnam’s future urban landscape.

Vietnam has a young population and an expanding pool of skilled workers, along with a geographic advantage for developing logistics. With the government creating favorable conditions for businesses, the country is prioritizing the growth of high-tech industries.

About 60% of FDI inflows into Vietnam are being channeled into high-tech industries, Duisenov said.

“Construction companies with capacity, knowledge, certain experience, and right culture in industrial projects will continue to see strong demand and new opportunities in this space,” he noted.

Coteccons studied the presence of major construction firms worldwide, finding that leading players hail from countries such as China, South Korea and Egypt, with many similarities to Vietnamese firms.

The chairman expressed his belief that Vietnamese engineers “do not have less capability” than their peers abroad. Coteccons’s management system and that of the broader industry, are fully competitive globally.

Coteccons has experience in Laos, Cambodia, and Myanmar, and has recently successfully completed a project in South India, according to Duisenov. The company also has three projects in Taiwan, including a landmark building, a university, and a shopping center.

It has obtained full licensing in the U.S., carried out smaller jobs and expects to secure larger contracts in the market.

“Urbanization, industrialization and globalization” are the “key words” Coteccons is pursuing for sustainable growth in the coming years, Duisenov said.

Responding to a shareholder’s question about the company’s global construction expansion, Duisenov said Coteccons has a roadmap and preparations in place to further expand abroad, with overseas projects expected to soon add to its backlog.

He emphasized that legal procedures are crucial in executing projects overseas, citing Taiwan, where it took the company 15 months to get a license.

“While discussing with the local government, as Coteccons is the first Vietnamese builder to officially open a branch in Taiwan, a lot of lawyers didn’t know how to work with us,” he further explained.

On how the company manages material costs, Deputy CEO Vo Hoang Lam said raw materials account for a large share of Coteccons’s cost structure. Even so, revenue has continued to grow in recent years and is expected to keep rising, supported by a diverse customer base.

Given its diverse customer base, Coteccons can build a strong supply chain and offer more competitive material prices, Lam said. The company makes bulk purchases of raw materials for one or several years, based on a principle of long-term partnership with suppliers and subcontractors.

Coteccons is also setting up a technology unit to provide solutions that reduce market volatility’s impact on investors. Instead of renegotiating with clients every time material prices rise, the company seeks win-win arrangements, he added.

Asked whether growth in civil construction could create room for reversing provisions, Deputy CEO Nguyen Chi Thien said the company didn’t increase provisions at last year’s AGM but instead reversed some.

For the 2025-2026 fiscal year, Coteccons plans not to set aside new provisions and expects no additional bad debt even as it continues to expand construction activities.

Duisenov added that the construction sector is rebounding and Coteccons is off to a good start. The company now operates across multiple segments including residential construction, infrastructure, and global projects, aiming to pursue opportunities in all areas rather than focusing solely on civil works.

Bad debt has historically come from residential construction, he said. With the sector recovering, risks are easing, while diversification into industrial, infrastructure and overseas projects further reduces exposure.

Answering a question on whether Coteccons plans to divest from contractor Ricons, Duisenov said the company is a shareholder but has no representative in the board of directors and in the supervisory board.

Coteccons wants to exit the investment but will only do so when the timing and price are fair for the company, he added.

On plans to lift the foreign ownership cap, Duisenov said Coteccons has approved raising the limit from 49% to 100%. However, the process remains unclear and is moving slower than planned. The company has engaged a third party to gradually carry out the necessary procedures.

For a question on sales at The Emerald 68 project in Ho Chi Minh City, Deputy CEO Thien said about 80-90% of the units have been sold.

Since late 2023, Coteccons has for the first time ventured into property development with The Emerald 68, a mid-range apartment project, in partnership with developer Le Phong.

The project carries an investment of more than VND2 trillion ($75.81 million). Coteccons’s move has added momentum to the trend of construction firms expanding into real estate.

However, Duisenov stressed that "Coteccons has no ambition to set up a separate brand, a real estate brand, and compete with its clients."

The executive chairman noted that The Emerald 68 is now being discussed with optimism and encouraging numbers. Yet just one to two years ago, many shareholders had raised doubts about the feasibility of the business as the market was in crisis. This shows that real estate is cyclical and carries inherent risks, he stressed.

Coteccons posted consolidated net revenue of VND8.35 trillion ($316.5 million) in the fiscal Q4/2025 (from April 1 to June 30), up 26.6% from a year earlier. Profit after tax in the quarter reached VND196 billion ($7.43 million), a 2.8-fold increase year-on-year.

Full-year net revenue came to about VND24.87 trillion ($942.67 million), an 18.2% increase from the previous year. Full-year net profit stood at around VND454 billion ($17.21 million), up 46.6%.

On the Ho Chi Minh Stock Exchange (HoSE), CTD shares closed Friday at VND81,800 ($3.1) apiece.