Social housing developer Hoang Quan Corp. (HQC) has seen its stock surge 26% within one week as the government announced plans to prioritize credit for affordable housing projects.
HQC on Tuesday closed its second session at its ceiling price, having risen in five of the last six sessions to VND3,240 (14 U.S. cents) per share.
The surge came as the government is set to propose to the National Assembly a credit package of VND110 trillion to fund social housing and home for worker projects.
Another credit package of VND120 trillion from four state-owned banks, with interest rates 1.5%-2% points lower than market averages, has also been approved by the State Bank of Vietnam (SBV).
HQC is considered a leading social housing developer in southern Vietnam with projects established in Ho Chi Minh City, the Mekong Delta and even the central highlands.
The company has been almost dominating the affordable segment for nearly a decade while most other developers pursue high-end projects which bring in larger profits.
But in the last five years, HQC has been struggling to grow as the VND30 trillion credit package earmarked for social housing projects ran out.
Truong Anh Tuan, chairman of the company, has been telling shareholders that the company has to accept losses to ensure its projects are finished on time.
Another difficulty the company faces is that social housing projects are limited to a profit of 10% to ensure their prices remain within the reach of low-income people.
In 2015 and 2016, the company posted a revenue of over VND1 trillion each year, but the figure quickly fell to VND600 billion in 2019 and to VND276 billion last year when profit was merely VND18 billion.
HQC shares have plunged nearly 70% from a peak of nearly VND11,000 at the end of 2021.
But despite the challenges, Tuan said that the company will stay committed to social housing development over the long run.
Between 2022 and 2027, the company plans to launch 50,000 social housing units across the country.
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