A Letter to CC47 shareholders, about vision & strategy 2021 – 2025
Quy Nhon, September 27, 2021
Dear Shareholders,
On the occasion of the 46th anniversary of the establishment of Construction Joint Stock Company 47, I would like to express my sincere gratitude to all shareholders on behalf of the Board of Directors, Leaders, and the entire staff of the company. Best wishes and good luck!
Established on September 8, 1975, formerly known as Irrigation Construction Company 7 under the Ministry of Irrigation, now the Ministry of Agriculture and Rural Development. On February 3, 1996, Irrigation Construction Company 7 was merged into Construction Corporation 4 and changed its name to Construction Company 47. On July 1, 2005, the company officially changed its operating mechanism from a State-owned enterprise to a Joint-stock company according to the business registration certificate No. 4100258747 issued by the Department of Planning and Investment of Binh Dinh province. On March 30, 2011, the Company officially traded for the first time at the Ho Chi Minh City Stock Exchange with the code CC47.
CC47 has gradually mastered the construction technology of irrigation, hydropower, civil and industrial works throughout the country over the course of 46 years of establishment and development. CC47 was also the first to implement new technologies such as roller compacted concrete (RCC), tunneling technology using TBM Tunneling Robot (more than 15km has been implemented), and so on, with many key projects worth trillion dong, which were highly valued by investors and agencies. In the last 15 years, the company has completed more than 30 irrigation and hydropower projects across the country worth more than 20,000 billion VND. Some typical capabilities of CC47 include: capacity to excavate soil and rock 4 million m3/year, capacity of concrete 1.5 million m3/year, capacity to supply sand and gravel 1.3 million m3/year, …
Furthermore, the Company also expands its lines of business into other industries such as restaurants, hotels, travel, and tourism: 100% ownership of Seagull hotel of 4-star standard (169 rooms – 5,183 m2 land area), 3-star standard Hai Au Bien Cuong Hotel (80 rooms – land area of 1,095 m2) in the coastal city of Quy Nhon, Dinh Binh guesthouse and restaurant service area (area of 12,500 m2) in Vinh Thanh district, Binh Dinh province, Dinh Binh eco-tourism area (area 111,500 m2) in Vinh Thanh district, Binh Dinh province; Overhaul of construction motorcycles, production of mechanical engineering products, production of fresh concrete and precast concrete components (100 percent ownership of Phuoc An Enterprise with a land area of 48,743 m2 in the industrial complex in Phuoc An – Tuy Phuoc district); training and labor export (100 percent ownership of the training center with an area of 8,775 m2 in Quy Nhon); testing the mechanical strength of structural concrete, exploiting and transporting construction materials… These sectors all significantly contribute to the company’s annual revenue. In terms of fixed assets, primarily vehicles, machinery, and construction equipment, data from the financial statement dated June 30, 2021 show that the company’s historical cost of tangible fixed assets reached 1,230 billion VND, with accumulated depreciation amounting to 795 billion VND.
Dear Shareholders,
I have been with CC47 since 2017 through the process of participating in investment and learning about the company. On June 28, 2020, I officially joined the Board of Directors as Vice Chairman, and on August 14, 2020, I was recently elected as Chairman of the Board of Directors for the 2020-2025 term in 2021. This is both an honor and a huge responsibility for me. I received my bachelor’s degree in mechanical and automotive engineering from Ho Chi Minh City University of Technology, my master’s degree in business administration and marketing from Solvay School in Belgium, and my bachelor’s degree in quality management from the University of Economics in Ho Chi Minh City. I have held senior management positions in European and American corporations, and I am the founder and Chairman of Vu Phong Energy Group, which has been a pioneer in Vietnam’s renewable energy industry since 2009. The members of the Board of Directors for the term 2020-2025 of CC47 company are individuals with extensive experience in business operation management and financial management. The cohesion and consensus among the Board of Directors, Executive Board and employees after more than 1 year in the new term has created positive changes in the model of governance and management more effectively, creating the premise for the implementation of CC47’s 2021-2025 strategy.
The two years 2020 and 2021 are challenging years for the construction and tourism industries due to the Covid-19 pandemic, but thanks to the proactive response, CC47 still achieved positive results. In 2020, the company achieved sales of 1,233 billion VND and more than 21.7 billion VND in profit after tax. In the first 6 months of 2021, total revenue reached VND 572 billion and profit after tax was VND 17.1 billion, reaching 52% of the revenue plan and 55% of the year’s profit plan. It is clear that, as a result of the use of technology in improving management and supervision capacity, deploying ERP systems for businesses, optimizing production and business efficiency, cutting costs, particularly interest expenses and loans, the company’s profit in the first six months of 2021 increased by 29.45 percent over the same period in 2020. According to the General Director’s quick report, it is expected that the company will continue to achieve high profits in the third quarter of 2021 compared to the same period last year, and the company’s employees are determined to exceed the profit target of 2021 approved by the General Meeting of Shareholders.
In 2021, in addition to having completed and will complete the handover of works on large projects such as the Bac Ai Pumped-Storage Hydropower Project (Ninh Thuan), the Expanded Da Nhim Hydropower Project (Lam Dong), the Tan My Irrigation Project (Ninh Thuan), and the Dong Mit Irrigation project (Binh Dinh), CC47 has also begun and will complete the construction of the Hoa Binh Hydropower Plant Extension (Hoa Binh), repair and improve the safety of WB8 dam in Lam Dong province (Lam Dong), and continue to build the Phu Phong Rolling weir project (Binh Dinh) in October 2021. The total value of new construction works in 2021 will reach more than 1,500 billion VND, the total value of the bidding packages to be participated in at the end of 2021 and in 2022 is more than 5,000 billion VND, which will ensure the company income next year.
In terms of vision and strategy for the period 2021-2025, particularly in the post-pandemic recovery period, CC47 with the advantage of current capacity in the construction of large – scale projects and the policy of government funding, will be able to participate in a variety of projects across the country, including:
– Projects in the irrigation, transportation, and infrastructure sectors under the medium-term bond capital 2021-2025.
– Projects financed with ODA loans.
– Major irrigation projects financed by the state budget, particularly in the Central and Central Highlands provinces.
– Large hydropower projects in Vietnam and neighboring countries that are being built or expanded.
With the above investment capital sources in the period of 2021 – 2025, especially large projects, with a total investment capital of more than 200 trillion, CC47’s job opportunities will be very feasible. Besides the traditional segments, the company will promote participation in new segments to gradually increase the proportion of revenue such as:
– Highway projects; anti-flood, anti-salinity projects; river and sea embankment
– A metro project utilizing TBM tunneling robot technology, as well as airport and port infrastructure.
– Projects involving renewable energy sources such as wind power, solar power, and other power plants.
– Civil building and factory projects, as well as industrial park infrastructure.
The company is expected to set an average revenue and profit growth target of 25% per year beginning in 2022, aiming for sales of over 3,000 billion dong by 2025 and eventually reaching a market capitalization of trillion dong and becoming a listed enterprise on the Ho Chi Minh Stock Exchange with a medium capitalization (MidCap) and high liquidity. CC47 will strengthen and improve its investor relations (IR) activities, provide transparent and timely information, and strive to maintain a high dividend payout ratio and bonus shares averaging more than 15% per year. The company’s Board of Directors and Board of Management have a fairly detailed plan for the period 2022-2025, and the Company hopes to organize a meeting soon, both in person and online, to share more details about the vision and strategy for the new period, as well as discuss in detail questions and acknowledge shareholder comments.
On behalf of the CC47 Board of Directors, we have always prioritized CC47’s long-term development and financial stability in order to provide long-term benefits to shareholders and employees while contributing to the company’s growth. Sustainable development that adds value to the community is an important component of the overall picture of a modern, dynamic, and powerful Vietnam in the future. We also look forward to gaining the trust of our shareholders, as well as the support and long-term companionship of CC47 in the integration journey, as well as to welcoming new opportunities and developing strongly on a new journey.
At the end of the letter, I would like to wish you and your family always happy, healthy and successful.
Best regards!
Chairman of the Board
M.A Phong, Pham Nam
C47