Vietnam's Coteccons forecasts 50% profit surge on record $2.5bn backlog

Vietnamese construction major Coteccons (CTD) is forecasting robust growth for the fiscal year ending in June, with revenues expected to climb 30% to surpass VNĐ30 trillion (US$1.13 billion), exceeding its initial target. The company also projects a 50% surge in net profit to VNĐ680 billion ($25.9 million), Chairman Bolat Duisenov announced at a Shareholders’ Day event on June 15.

Duisenov highlighted the firm's sound financial standing, noting that operating cash flow remains positive and profit margins are anticipated to widen to approximately 4% from 3.4%. This performance builds on an average annual revenue growth rate of around 25% since the COVID-19 pandemic, a result attributed to improved risk management, stringent financial controls, and a steady enhancement of its competitive position.

Looking ahead, Duisenov outlined a growth strategy based on three core pillars: urbanisation, industrialisation, and international expansion. As Vietnam’s urban development continues, Coteccons aims to capture rising demand for infrastructure projects like airports, hospitals, and schools by leveraging significant investments in its construction capabilities. The second pillar, industrial construction, capitalises on Vietnam's emergence as a global manufacturing hub, driving demand for factories, logistics facilities, data centres, and high-tech infrastructure. The company intends to expand its footprint in these areas and is expected to announce new projects in the coming months.

The third pillar, dubbed “Going Global,” focuses on overseas markets. While international projects currently represent a minor share of revenue, management expects income from global operations to increase three- to four-fold in the 2026-27 fiscal year compared to the current period, Duisenov revealed. Bolstered by a record project backlog exceeding VNĐ65 trillion (approximately US$2.5 billion), the company has strong visibility for future growth. Duisenov noted that while construction demand is projected to outpace supply through 2027, Coteccons is shifting its strategy from rapid expansion towards higher-quality, more sustainable growth.

Deputy CEO Trần Ngọc Hải elaborated that the company is increasingly targeting projects that not only generate revenue but also build its technical expertise and competitive standing. He pointed to landmark developments such as the Lego factory, Sun Group’s nearly VNĐ13 trillion Opera House, and Gia Bình Airport as examples of complex undertakings that enhance the firm's capabilities. Addressing recent weakness in the company’s share price, Hải referenced a VinaCapital report indicating that over 70% of listed stocks are trading at price-to-earnings ratios below 10, a valuation typically seen during market downturns that may not reflect current growth prospects. He affirmed that Coteccons remains focused on its business fundamentals rather than short-term market fluctuations.

The company will continue to prioritise operational excellence, prudent financial management, client relationships, and the successful execution of its substantial VNĐ65 trillion backlog, he added.