The Bamboo Capital JSC (HSX: BCG) announced at an Investors’ Conference held recently in Ho Chi Minh City that it will continue to move towards real estate and renewable energy projects in the future.
The company expects to post $35.6 million in net profit in 2023, with large cash flows and around $13.5 million in net profit for this year.
Shifting investments into real estate and renewable energy
BCG also proposed delivering the company’s fundamental change in strategies in accordance with market fluctuations. According to the its Board of Directors, it will maintain its activities in four main sectors in the upcoming years: Agriculture and Manufacturing, Construction and Trading, Infrastructure and Real Estate, and Renewable Energy.
Since 2018, BCG has made significant changes in its investment strategy by narrowing inefficient business operations, retaining only successful restructured businesses. At the same time, it has shifted investments into highly-profitable segments such as real estate and renewable energy.
According to its plan, BCG will reduce investments in the trading and infrastructure segments. In 2018, capital inflow into the real estate segment projects increased rapidly due to it investing in the Da Nang, Malibu Hoi An, and Thao Dien projects. In 2019, capital inflow into renewable energy increased sharply due to various investments in solar farm projects in the Mekong Delta’s Long An province.
In the short term, BCG’s current cash flow is being used for projects in agriculture, manufacturing, and trading, in order to create a stable cash flow, while continuing to focus on investing in medium and long-term projects.
In the medium term, the company will concentrate on developing real estate projects such as Pegas Nha Trang, the Bao Loc Urban Area, the Loc Phat Residential Area, the Hiep Binh Chanh Urban Area, and the Hoa Ninh Residential Area.
Pegas Nha Trang is one of its largest real estate projects, with total investment of $33.7 million, and will feature a 38-story hotel and apartment building in the coastal city of Nha Trang.
The project is a type of condotel. Since there is concern among investors about the legality of such projects, a representative lawyer from BCG said it is being built on land licensed for 50 years that can be extended for 50 years more.
In the long term, the renewable energy segment will contribute effectively to the company’s growth, with stable income and high profit margins. Projects deployed include floating solar power plants in Quang Nam and Dak Lak provinces, a wind power plant in Soc Trang province, and three solar power plants - Sunflower, Redsun, and Ben Tre.
It is also researching developing a liquefied natural gas (LNG) plant that is the largest in its energy portfolio, with total investment of over $3 billion. Rooftop solar power projects will be its main investment in 2020. The company’s plan this year is to reach a total capacity of 50MW.
Mr. Nguyen Ho Nam, Chairman of BCG, told the conference that it will cooperate with international corporations to take advantage of their science and technology, brand, and cash flow. It also receives support from foreign shareholders contributing capital to implement solar power projects, such as Hanwha Energy and Japan Asia Investment.
“BCG is also working with other partners and will raise additional loans from local banks,” he said. “Through these strategies, BCG expects revenue to reach $291.7 million in 2023, with an ROE of 77 per cent.”