The fact that investors “rushed” into the land plot segment recently, caused a large backlog of segments such as luxury apartments, tourist apartments, tourist villas.
Actual image of TTC Land’s Jamona City project
According to a report published on May 6, 2021 by the Ministry of Construction, the number of houses left unsold, without transactions by the end of 2020 is estimated at 9,000 units, concentrated in localities directly affected. from the C0VID-19 epidemic such as Da Nang, Khanh Hoa, Kien Giang, Binh Duong…
The fact that the financial statements of a number of listed real estate companies have recently shown that the amount of inventory has increased significantly.
By the end of the first quarter of 2021, Saigon Thuong Tin Real Estate Joint Stock Company (TTC Land) recorded an inventory value of VND 1,977 billion. Thus, TTC Land’s inventory is approximately half of its equity.
Another name that must also be mentioned is Dat Xanh Group Joint Stock Company (DXG) at the end of the first quarter of 2021, which is recording an inventory of more than VND 10,148.6 billion, only slightly down from 10,251 0.6 billion dong at the end of 2020 and account for nearly 52% of total short-term assets.
Similarly, in the case of Asia-Pacific Investment Joint Stock Company (API), as recorded in the financial statements, as of December 31, 2020, the inventory is currently at VND 1,708 billion compared to Current asset level is only 2,668 billion dong.
Inventory figures in audited consolidated financial statements
According to Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, when the amount of real estate inventory increases, it not only becomes a burden for businesses, but also the economy. The most worrying thing is that the market does not accept the enterprise’s inventory, because there are often problems with legal procedures or related to bad debt and credit safety, so it must be warned from any angle. Real estate inventories increased.
Besides, the inventory update of real estate enterprises is almost only shown in listed enterprises, if expanded to the whole market, it will certainly be much larger.
Sharing the same opinion, but Mr. Nguyen Anh Trung, Deputy General Director of Hai Phong Securities Company has a more positive view when he thinks that on the one hand, when the inventory is high, it shows the intrinsic strength of the business, because only the Only businesses with a strong financial foundation will have a large land bank, abundant products, and enough resources to maintain a large inventory until the right time to sell.
However, according to Mr. Trung, the large inventory will also increase the cost of capital, if prolonged stagnation can cause businesses to lose business opportunities as well as growth.
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