ACV Appoints New Chairman as 2024 Profit Forecast Plunges on Long Thanh Costs
This Aveluro analysis covers ACV on UPCOM in the Industrial Goods & Services sector. The classified event type is leadership change, with neutral sentiment and a deterministic market-impact score of 5.0/10. Source coverage came from VnExpress - Kinh doanh, classified as a primary/top-tier source.
Key Facts
Caveat: Not investment advice. · How Aveluro computed this: Aveluro combines extracted event facts, source credibility, ticker context, and market data. Scores are deterministic research signals, not recommendations.
Overview
ACV (Airports Corporation of Vietnam) appointed Mr. Nguyen Cao Cuong as the new Chairman of the Board of Directors at its annual general meeting on June 19, 2024, filling a vacancy left since March. The company also approved a 2024 business plan targeting revenue of VND 21,141 billion (+2% YoY) but pre-tax profit of only VND 7,011 billion, a sharp decline from VND 15,203 billion in 2023, due to the peak investment phase for the Long Thanh International Airport project.
Key Facts
- ACV appointed Nguyen Cao Cuong as Chairman of the Board of Directors on June 19, 2024, with near-unanimous shareholder approval.
- The chairman position had been vacant since March 2024 when Vu The Phiet was removed; Le Van Khien served as acting chairman.
- Nguyen Cao Cuong, born 1976, previously served as ACV’s Deputy General Director and is also Chairman of SAGS (Saigon Ground Services).
- ACV’s 2024 revenue target is VND 21,141 billion, up 2% from 2023.
- 2024 pre-tax profit target is VND 7,011 billion, down 54% from VND 15,203 billion in 2023 and the lowest since 2021.
- Total planned investment for 2024 is approximately VND 286,900 billion, with capital expenditure of VND 40,570 billion, both sharply higher year-on-year.
- ACV aims to begin trial operations of Long Thanh airport in September 2024 and commence commercial operations by December 2026.
What Happened
At its annual general meeting on June 19, 2024, ACV shareholders elected Nguyen Cao Cuong to the Board of Directors and subsequently appointed him as Chairman, filling a leadership gap that emerged in March when Vu The Phiet was removed from the role. Cuong, who holds a bachelor’s degree in finance and banking, has held various operational and management roles at ACV and its parent company, Vietnam Airlines, including serving as Deputy General Director of ACV since mid-2023. He concurrently chairs Saigon Ground Services JSC (SAGS).
The meeting also approved the company’s 2024 business plan, which projects a sharp decline in profitability. Management attributed the expected drop to ACV entering a peak investment cycle, with several large projects nearing completion, leading to higher depreciation, operating costs, and interest expenses. Additionally, interest income from bank deposits is expected to fall as accumulated cash is deployed into key national projects, notably the Long Thanh airport.
Market Context
ACV shares closed at VND 44,500 on June 18, 2024, down 0.22% with low volume of 377,600 shares, reflecting cautious sentiment. The stock trades on HOSE and has been under pressure as investors weigh the near-term earnings drag from the Long Thanh investment against the long-term growth potential. The 2024 profit guidance, the lowest in three years, reinforces the view that ACV is in a multi-year investment phase that will compress margins and delay dividend payments.
Strategic Significance
The appointment of Nguyen Cao Cuong signals continuity in ACV’s strategic direction, as he is an internal candidate with deep operational experience. The core strategic thesis for ACV hinges on the successful completion of Long Thanh International Airport, Vietnam’s largest infrastructure project, which will more than double the country’s international passenger capacity. However, the 2024 guidance confirms that the financial payoff will not materialize until at least 2027, when the first phase is fully operational. In the interim, shareholders face depressed earnings and no cash dividends, as management indicated that dividend payments will only be considered after Phase 1 completion, likely at the 2027 AGM.
What to Watch
- Progress of Long Thanh airport trial operations starting in September 2024 and the official opening timeline.
- ACV’s Q2 and Q3 2024 earnings reports to track whether profit trends align with the full-year guidance.
- Any updates on dividend policy or capital allocation plans, particularly at the 2025 AGM.
- Changes in foreign ownership limits or investor sentiment as the stock may become more attractive post-Long Thanh.
- Regulatory approvals and financing updates for Long Thanh Phase 1, including cost overruns or delays.