Nam Kim Steel lends Phat Dat 400B VND for Lotte's Thủ Thiêm Eco Smart City

Overview

Nam Kim Steel (NKG) has revealed significant financial commitments to Phat Dat Real Estate Development (PDR) in its H1 2026 reviewed financial statements, including a 400 billion VND deposit for a potential investment partnership in the Thủ Thiêm Eco Smart City project. The project, led by South Korea’s Lotte Group, sees PDR holding a 35% stake. This marks an unusual cross-sector tie-up between a steel manufacturer and a property developer.

Key Facts

• As of June 30, 2026, NKG reported nearly 3,100 billion VND in short-term held-to-maturity investments, including loans to third parties.
• NKG lent 350 billion VND to Nguyễn Văn Đạt, Chairman of PDR, and 100 billion VND to HBM Real Estate Investment and Trading LLC, both guaranteed by PDR.
• NKG recorded a 400 billion VND investment in “Other Investments,” described as an unsecured capital contribution to PDR under a principles agreement dated April 2, 2026.
• The 400 billion VND will be refunded with 15% annual interest if NKG and PDR fail to sign an investment cooperation contract by December 30, 2026.
• PDR’s reviewed statements identify the 400 billion VND as a deposit under an investment cooperation contract with NKG for the Thủ Thiêm Eco Smart City project.
• Thủ Thiêm Eco Smart City is a multi-billion-dollar smart urban complex in functional zone 2A, Thủ Thiêm New Urban Area, Thủ Đức City, Hồ Chí Minh City.
• NKG’s H1 2026 net revenue was over 7,400 billion VND, down 6.2% year-on-year, but net profit nearly doubled to about 130 billion VND.

What Happened

Nam Kim Steel’s reviewed consolidated financial statements for the first half of 2026 disclose a series of transactions with Phat Dat and its chairman, Nguyễn Văn Đạt. Specifically, NKG provided loans totaling 450 billion VND: 350 billion VND directly to Mr. Đạt and 100 billion VND to HBM Real Estate Investment and Trading LLC, a newly established company with charter capital of 30 billion VND, where Mr. Lâm Anh Dũng holds 99.5%. Both loans are guaranteed by PDR.

Additionally, NKG recorded a 400 billion VND investment under “Other Investments,” which it describes as an unsecured capital contribution to PDR under a principles agreement dated April 2, 2026. PDR’s own financial statements clarify that this amount is a deposit for an investment cooperation contract with NKG, aimed at participating in the Thủ Thiêm Eco Smart City project. The project, developed by Lotte Group, includes PDR as a 35% capital contributor. NKG’s management assessed that the investment and guaranteed loans are recoverable, as they are not yet overdue and based on PDR’s financial capacity.

Market Context

NKG shares closed at 10,800 VND on September 3, 2026, on the HOSE. The steel sector has faced headwinds, with NKG’s revenue declining 6.2% in H1 2026, though profit doubled. PDR, also on HOSE, closed at 12,250 VND. This cross-sector financing comes amid a recovering Vietnamese real estate market, particularly in Hồ Chí Minh City, where large-scale projects like Thủ Thiêm Eco Smart City are attracting both domestic and foreign investment.

Strategic Significance

For NKG, this move represents a strategic diversification of its cash reserves into higher-yielding real estate ventures, potentially offering returns far above its core steel operations. The 15% interest rate on the deposit, if the deal falls through, underscores the attractive terms. For PDR, the financing from NKG bolsters its capital position for a major project with Lotte, enhancing its credibility and development pipeline. The partnership could pave the way for NKG to secure steel supply contracts for the project, creating a vertical integration opportunity. However, the lack of collateral on the 400 billion VND deposit exposes NKG to counterparty risk, though management’s assessment suggests confidence in PDR’s financial standing.

What to Watch

• Whether NKG and PDR sign a formal investment cooperation contract by December 30, 2026, or if the deposit is refunded with 15% interest.
• Updates on Thủ Thiêm Eco Smart City’s construction progress and any changes in Lotte’s investment plans.
• NKG’s Q3 2026 earnings report to see if the loans and deposit impact its liquidity or profitability.
• PDR’s ability to secure additional funding for its 35% stake in the project.
• Any regulatory approvals required for the cross-sector investment or the project itself.