What’s driving ambitious business plan of Vietnam's major developer Phat Dat?

Phat Dat Real Estate Development Corp (HoSE: PDR), a major developer in Ho Chi Minh City, aims for revenue of up to VND3.3 trillion ($126.8 million) this year, four times higher than in 2024.

Its post-tax profit is projected to reach VND728 billion ($27.97 million), 4.7 times last year’s figure.

The business plan will be presented at the company’s 2025 AGM on June 27.

Last year, Phat Dat also set ambitious goals of VND2.98 trillion ($114.5 million) in revenue and VND880 billion ($33.81 million) in post-tax profit.

However, actual performance fell far short, meeting just 28% of its revenue target and 17.6% of its profit goal, with only VND822 billion ($31.59 million) and VND155 billion ($5.95 million), respectively. This also marked Phat Dat’s lowest earnings in a decade.

The shortfall stemmed from unfavorable conditions in the company’s property investment and development activities, amid broader economic headwinds.

Revenue and profit during the first three quarters of 2024 largely came from late payment penalties and asset sales, including the divestment of a 49% stake in BIDICI Real Estate Investment JSC.

It wasn’t until the final quarter of the year that Phat Dat began recording revenue from project development, following the launch of phase one of its Quy Nhon Iconic project, officially known as the Bac Ha Thanh Residential Area in the south-central province of Binh Dinh.

In Q1/2025, Phat Dat recorded a sharp increase in revenue to VND438 billion ($16.83 million), up 2.7 times from the same period last year, driven by the sale of real estate at the Bac Ha Thanh project.

However, post-tax profit slipped 4% due to a VND34 billion ($1.3 million) drop in other income, mainly from late payment penalties.

The decision to set aggressive growth targets just as the second quarter nears its end reflects Phat Dat management’s strong expectations for the rest of the year.

Three key projects

Phat Dat said its core strategy this year is to accelerate sales and improve cash flow.

Key projects now entering the launch phase include the Quy Nhon Iconic complex, the mid-range Thuan An 1 & 2 apartment series in the southern province of Binh Duong, and La Pura - a high-rise mixed-use complex located along National Highway 13 in Binh Hoa ward, Thuan An town, Binh Duong province.

The Quy Nhon Iconic project has completed all legal procedures and is ready for sale.

Phat Dat noted that property prices in Quy Nhon town, Binh Dinh province, have surged around 30% in just Q1/ 2025. The project is expected to generate strong short-term cash flow, enabling the company to settle substantial debt obligations in 2026.

For La Pura, Phat Dat officially launched sales last Sunday. The company said thanks to competitive pricing and flexible payment terms, 95% of the units in its first phase were successfully sold.

At the Thuan An 1 project in Binh Duong, the provincial Department of Agriculture and Environment issued two land use right certificates on May 9. This marked a key legal milestone, paving the way for the project to meet conditions for launch in the near future.

The Thuan An 1 & 2 high-rise residential complex spans 4.46 hectares and includes Thuan An 1 and Thuan An 2 towers. It boasts a prime location in the development center of Thuan An town, offering convenient connections to Binh Duong boulevard, Phu Loi street, and My Phuoc-Tan Van road.

Thuan An 1 spans 1.8 hectares and includes Towers A1, A2, and A3. Tower A1 is 36 stories high with an attic and a three-story basement, offering nearly 2,604 apartments and shophouses. Towers A2 and A3 each will be 39 stories high, also featuring an attic and a three-story basement.

The Thuan An 2 project covers 2.65 hectares, reaching 39 stories with a maximum four-story basement, providing 3,270 apartments and 16 townhouses.

Phat Dat expects the projects to deliver a significant boost to revenue and profit starting later this year.

Cash dividend set for next year

At the 2024 AGM, shareholders approved a plan to issue shares for a 15% share dividend for 2023, but it was never carried out. As a result, the board is proposing to scrap the plan at this year’s meeting.

Meanwhile, despite missing its 2024 targets, the company still plans to pay an 8% dividend, equivalent to a total par value of VND725.8 billion ($27.88 million).

For 2025, Phat Dat’s management is proposing a dividend payout of up to 17%, including 5% in cash and 12% in shares. In recent years, the company has mainly paid share dividends, with the last cash dividend distributed in 2019.

In addition, the board is proposing to cancel the 2024 ESOP share issuance plan and replace it with a new issuance of 18 million ESOP shares for 2025, representing up to 1.9% of the total outstanding shares. The issuance price is set at VND10,000 ($0.38) per share.

The program aims to recognize the contributions of ESOP 2025 participants to the company’s business performance over the past three years and their long-term commitment going forward. The ESOP shares will be subject to a one-year lock-up period.

On the Ho Chi Minh Stock Exchange (HoSE), PDR shares are currently trading around VND17,500 (USD0.67) apiece, having recovered 17% from the April low, when the tax-related incident occurred.

PDR closed Tuesday at VND17,350 ($0.67) apiece.