VEF Q1/2026 Net Profit Plunges 99% After Record Project Transfer in Prior Year

Overview

VEFAC (VEF), the company that posted the largest quarterly profit on the Ho Chi Minh Stock Exchange in Q1/2025, reported a 99.1% drop in net profit for Q1/2026 to nearly 140 billion VND. The collapse is attributed to the absence of a massive one-time project transfer revenue recorded in the same period last year. The results highlight the volatility of VEF’s earnings, which are heavily dependent on large asset sales.

Key Facts

• VEF’s Q1/2026 net profit fell 99.1% year-on-year to nearly 140 billion VND, compared to a record 14,873 billion VND in Q1/2025.
• Net revenue in Q1/2026 was 121.6 billion VND, down 99.7% from 44,560 billion VND in Q1/2025.
• The prior-year revenue spike came from the transfer of a portion of a project valued at over 44,560 billion VND.
• Administrative expenses surged fivefold to 28 billion VND, including over 12 billion VND in sponsorship and charitable contributions.
• Total assets as of March 31, 2026, reached 30,514 billion VND, up 30% from the start of the year.
• Cash and equivalents dropped sharply from 579 billion VND to 61.6 billion VND, while long-term held-to-maturity investments (loans to partners at 12% interest) rose from 500 billion VND to 7,490 billion VND.
• Construction in progress stood at 4,531 billion VND, with over 3,676 billion VND at the 148 Giang Vo complex project.
• Total liabilities increased by nearly 7,000 billion VND to 23,698 billion VND, mainly due to a rise in short-term customer advances from 411 billion VND to 6,191 billion VND.

What Happened

VEFAC (VEF) released its Q1/2026 financial statements, revealing a dramatic decline in profitability. Net profit for the quarter was approximately 140 billion VND, a 99.1% drop from the record 14,873 billion VND in Q1/2025. The company’s net revenue also plunged 99.7% to 121.6 billion VND. The primary cause was the absence of the large project transfer revenue that had boosted the prior-year figures. In Q1/2025, VEF recognized over 44,560 billion VND in revenue from transferring a portion of a project.

Administrative expenses increased fivefold to 28 billion VND, partly due to over 12 billion VND in sponsorship and charitable costs. On the balance sheet, total assets grew 30% to 30,514 billion VND, driven by a surge in long-term investments (loans to partners) and construction in progress. Cash and equivalents fell sharply, while short-term customer advances jumped to 6,191 billion VND from 411 billion VND at the start of the year.

Market Context

VEF is listed on the Ho Chi Minh Stock Exchange (HOSE) and operates in the real estate sector. The stock has experienced significant volatility due to the lumpy nature of its earnings, which are heavily influenced by large project transfers. The Q1/2025 record profit had drawn attention to VEF as the most profitable company on the exchange for that quarter, but the subsequent decline underscores the non-recurring nature of that income. The broader real estate market in Vietnam has faced headwinds from regulatory tightening and credit constraints, though VEF’s specific project pipeline remains a key driver.

Strategic Significance

The Q1/2026 results confirm that VEF’s earnings are highly dependent on one-off asset sales, making its profitability unpredictable. The company’s strategy appears to involve developing large projects and then transferring portions to generate revenue. The increase in long-term loans to partners at 12% interest suggests a shift toward lending activities, which could provide more stable income but also carries credit risk. The rise in customer advances indicates ongoing project sales, but the sharp drop in cash raises liquidity concerns. Long-term investors should focus on the progress of VEF’s core projects, particularly the 148 Giang Vo complex, and the sustainability of its lending operations.

What to Watch

• Progress of the 148 Giang Vo complex project and any further project transfers.
• Collection of the 7,490 billion VND in partner loans and the associated interest income.
• Changes in short-term customer advances, which may signal future revenue recognition.
• VEF’s ability to manage liquidity given the sharp decline in cash and equivalents.
• Any new project transfer announcements that could drive a repeat of the Q1/2025 revenue spike.