Vietnam's leading construction contractor Hoa Binh targets US market amid low domestic profit

Hoa Binh Construction Group, one of Vietnam's top contractors, is negotiating a joint venture agreement with American partners to pave the way for implementing major projects in the U.S.

At the firm's 2025 AGM on April 25, in response to shareholders' questions about foreign market expansion, deputy CEO in charge of international markets Nguyen Kinh Luan said that in recent years, Hoa Binh has focused on developing markets such as Australia, the U.S., Southeast Asia (Cambodia), and several countries in East Africa.

In 2024, Hoa Binh, registered on the Unlisted Public Companies Market (UPCoM) as HBC, continued providing project management and construction material supply services to the U.S. market. The company is now in talks with partners in California for a potential joint venture agreement in 2025.

“Our potential partners in the U.S. are involved in very large projects. We hope that in 2025, once the joint venture is finalized, we will begin executing contracts together. Hoa Binh plans to send general construction contractor experts from Vietnam to work with U.S. partners in delivering large-scale projects,” said Luan.

He noted that the corporation is making similar moves in Australia. In Kenya (Africa), the company won four social housing projects for police forces in 2023, with a total value of $70 million for around 3,500 units.

“We are negotiating with the State Department of Housing and Urban Development of Kenya for upcoming contracts,” he added.

In Cambodia, Luan shared that Hoa Binh worked effectively last year with the government and several investors and contractors on infrastructure and civil projects.

In 2025, we plan to sign new agreements and implement stronger development strategies in the Cambodian market and the broader Southeast Asian region, he emphasized.

Chairman Le Viet Hai added that while the domestic market holds great potential, profitability remains low due to intense competition and narrow profit margins.

"Nevertheless, Hoa Binh is committed to maintaining a strong presence in Vietnam to train and sustain its workforce for international markets, with the ultimate goal of expanding globally."

According to Hai, overseas projects under consideration by Hoa Binh offer gross profit margins of 10-20% and potentially more through joint ventures with local partners. Over the years, the company has built strong networks with many potential international partners, and the timing is now ideal for international expansion.

This is why the company plans a private placement of up to 347 million shares for an estimated VND3.47 trillion ($133.4 million), as a large capital base is needed to support global growth, he said.

“Despite challenges, Hoa Binh is continuing preparations for international market development. Global construction markets have consistently grown in recent years, with a market size of over $15 trillion, while the Vietnamese market was only $36 billion last year,” he said.

In 2024, Hoa Binh reported revenue of VND6.42 trillion ($246.7 million), falling short of its target and down 15% compared to 2023. However, net profit reached VND959 billion ($36.8 million), a new high for the company.

Notably, equity grew from VND93 billion to nearly VND1.75 trillion ($67.3 million), an 18-fold increase from the beginning of the year.

Since November 2024, Hoa Binh has seen a resurgence, securing 14 contracts valued at over VND8.5 trillion ($326.7 million).

For 2025, Hoa Binh targets VND9 trillion ($345.9 million) in revenue and VND360 billion ($13.8 million) in after-tax profit.

HBC shares closed Tuesday at VND6,300 ($0.24) each.