Vietnamese real estate major DIC Corp’s standby fund surpasses $113 mln

DIC Corp, among Vietnam’s top real estate developers, is sitting on a sizable standby fund, with short-term customer prepayments exceeding VND3 trillion ($113.7 million) as of Q2/2025, up VND582 billion ($22.1 million) since the start of the year.

Key contributors include the Nam Vinh Yen New Urban Area in the former Vinh Phuc province (now Phu Tho province) with customer prepayments of VND1.31 trillion ($49.64 million) and the A2-1 apartment tower at Chi Linh Center in the former Ba Ria-Vung Tau province (now Ho Chi Minh City) with VND1.29 trillion.

Chi Linh Center covers 99.73 hectares in Rach Dua and Tam Thang wards, HCMC with total investment of over VND1.11 trillion ($42 million). Its A2-1 apartment block is fully constructed, inspected, and ready for use.

The Nam Vinh Yen New Urban Area is located in Vinh Phuc ward, Phu Tho province, with post-tax investment of VND3.79 trillion ($143.63 million) and an area of 190.6 hectares. The project has received its seventh detailed planning adjustment, extended to Q4/2030, with 98% land clearance completed.

Construction is underway on three subzones, including two new social housing blocks launched in March. Other blocks are in the approval phase.

In real estate, short-term customer advances are essentially pre-sale deposits. While not yet recorded as revenue, they indicate strong sales performance and represent future revenue once construction and handover are complete. However, growing advances without corresponding revenue recognition can raise concerns about delivery capacity and execution.

Six-month earnings far below target

According to DIC’s H1/2025 reviewed consolidated financials, revenue dropped 33% year-on-year to VND425 billion, mainly due to a sharp decline in construction activity, down from VND465.6 billion ($17.64 million) to just VND65 billion ($2.46 million).

However, real estate transfers surged, with revenue increasing from VND42 billion to VND205 billion ($7.77 million) and gross profit flipping from a VND23 billion loss to over VND100 billion ($3.79 million) in profit.

Gross profit margin improved significantly from 17.1% to 34.6%, pushing gross profit up to VND147 billion. Pre-tax profit rose 78% year-on-year to VND38.2 billion, while net profit reached VND28 billion ($5.57 million), seven times higher than the same period last year.

Despite the improvement, the company has achieved only 5.3% of its ambitious full-year profit target of VND718 billion ($27.2 million). Management faces mounting pressure to accelerate results in H2, especially after chairman Nguyen Hung Cuong expressed confidence at the 2025 AGM in a potential Q2 breakthrough.

Outlook: market recovery, key projects to drive growth

DIC expects a real estate market rebound in the coming quarters, citing improved legal frameworks and administrative reforms. The company is positioning itself to benefit through revenue recognition from the Lam Ha Center Point project in the former Ha Nam province (now Ninh Binh province).

Lam Ha Center Point fulfilled land-related financial obligations by March 28 and received approval to transfer the entire project by June 27. DIC expects to book over VND1.11 trillion ($42 million) in revenue and an estimated VND300 billion ($11.4 million) in profit once procedures are completed.

In H1, DIC launched 599 land lots for sale in the “The Energy” subdivision of DIC Victory City in Hau Giang province, including 579 townhouse plots and 20 villas, priced at VND12 million ($455) per square meter on average. Expected revenue is around VND714 billion ($27 million) with pre-tax profit of VND136 billion ($5.15 million).

In Nam Vinh Yen, the company has received official confirmation that 346 lots (Phase 1) now meet technical infrastructure conditions for resale. It has also opened its DIC Star Vinh Phuc Hotel, a component project within the Nam Vinh Yen development.

DIC Corp is listed on the Ho Chi Minh Stock Exchange (HoSE) as DIG, which hit its ceiling price of VND24,900 ($0.94) per share on Wednesday.