1. Novaland officially listed on 12.28.2016 with ticker "NVL", very "HOT" from the first moment with the listing price of VND 50,000/ share. The first trading session achieved a 20% increase in share price to VND 60,000/ share and stablelized until the end of 12.31.2016. The listing is considered very successful. In your view, what is the reason for this success? And does this price reflect the true value of Novaland shares yet?

Actually Novaland Group had been prepared and ready for listing since 2008, but due to the stock market falling into recession, the listing was temporarily postponed.

The success of today has been due to directed effort and thorough preparation. Our principle is that all activities must be based on truthfulness and integrity to ensure sustainable development. Novaland staff are committed to not chasing the immediate short-term benefits.

Starting with Sunrise City, a large scale project with investment of USD 500 million at the time of the global financial crisis; fortunately, we made the right decision: Continued to develop, build and deliverour commitments to our customers. In return, we had to bear high interest rates, and faced the risk of no buyers. By overcoming difficulties and turning them into opportunities, we had built a reputation and in turn have more capital to continue to cooperate and develop more projects.

Novaland comes from manufacturing beginnings and have always had very rigid and realistic plans. In our history of operation, we have always completed plans. In 2009, we received an AAA credit rating from the State Bank.

In fact, the value of Novaland shares could have reached 65,000 VND/share after the first trading session and we could have sold all the shares offered at VND 56,000/share because there were enough investor subscriptions. However, since GIC (belong to Ministry of Finance, Singapore) subscribed for VND 50,000/share (by buying in bulk and contributing to the development of the Company hence putting forward a discount on the market price) and we agreed to sell for VND 50,000/share to have a long-term reputable shareholder. This decision is in line with our sustainable development strategy when investors all share in the profits, Novaland is not pressured by share price and NVL share price will trend upwards.

 

Chairman of Novaland Group – Mr. Bui Thanh Nhon opened the first trading day by striking the “Gong”

Novaland overcame the crisis of 2009-2015 with the help of good risk management practices. Immediately prior to tight cash flow, we issued bonds of 1,900 billion in cash to fund development of Sunrise City project. Listing on the stock exchange is one of the aspects of risk management. Consolidating strong cash flow, restructuring suitable products, rearranging the investment segment, consolidating staff, applying advanced technology, improving governance, transparency ... and many other defensive measures.  

I think debt financing for project development is very normal work and is common practice for real estate development corporations all over the world. The law also regulates counterpart funds from 15% - 20% and the ratio of loans must be proportionate with own capital. For Novaland, by issuing bonds with Credit Suisse, the percentage of loans cannot exceed 60% of total assets and accompanied by many other constraints. This is also the standard in risk management for us. For each project we set up a separate subsidiary with counterpart funds in accordance with the law and separate loans, as a separate "ship compartment". The cash flow of the project is in the form of bank loans under strict management until project finalization. I also very much enjoy having the banks as a relay partner in managing the loans! Thus the loan size is not important, if there are more projects there would be more loans. What is important is to separate the projects, ensuring feasibility, effectiveness and liquidity.

Our ancestors often said: "Do not put all our eggs in one basket".  A conglomerate is not necessarily bad if properly invested, because the cash flow from many "baskets" will help us a lot when crisis strikes. It is important when investing we must have a clear strategy and consistently pursue the goals. The plan must be specific with very realistic figures on financial statements and must be within control.

For Novaland, each area of investment is a separate compartment. Each compartment must be separate, if one compartment is damaged it will not affect the others, and will not sink the ship. Within our Group, we maintain absolute independence with both financial and human resources. Our approach is to set goals then balance resources and undertake strategic planning guiding each step towards our goals. When putting money into a new business field, we see it as starting a business. We would seek separate investment sources and if losses occur, the remaining companies are not affected. Without separate financial resource, too risky, or banks do not approve loans indicating a bad project, we would not proceed.

6. The market in 2017 is projected to be extremely competitive, with many very strong domestic and international competitors.  How has Novaland prepared to deal with the challenges of this integration phase? What are Novaland’s plans after listing? And Novaland position in the next 10 years?

I have been playing Golf since 1997 and I enjoy this sport because it is not really about “antagonistic”! Everyone has to win over oneself. With Novaland, competitors are just information when implementing plans. Strength within the company is of true importance. Must prepare financial resources, improve cash flow, enhance professional management team, build systems, processes, and risk management ... That is the true core.

Novaland listed to obtain development funds. Novaland’s development strategy includes 3 very clear phases. Phase 1 (2007-2015), focusing on the development of 5,000 housing products to supply the market. Phase 2 (2016-2025), in addition to the core business of housing products, Novaland develop commercial and hospitality projects for cash flow stability. Phase 3 (after 2025), Novaland will expand geographical coverage and focus on developing smart townships with more convenience, connections and modern infrastructure.

Novaland is currently negotiationing cooperation with partners to develop hospitality projects in Danang. This project is designed by famous designer Moshe Safdie - who designed Marina Bay Sands of Singapore. When completed, this project will be the highlight of Danang city as it qualifies in size, international appeal and standards, and will certainly contribute to increasing the value of Danang city and attract significant numbers of international tourists. This will be a featured project in Phase 2 of the development strategy of Novaland.

With home advantage and thorough preparation, Novaland is ready for integration phase and will grow with the development of the Country. Step by step, Novaland will be a highly regarded world-class real estate group, with strong and sustainable growth, contributing to a happy and prosperous society.