CTCP Xây Dựng Coteccons (HOSE: CTD) | Báo Cáo Lần Đầu, MUA - Kỳ vọng 2026 +23.6%

Market Leadership Rebuilt, Earnings Recovery In The Next Construction Growth Cycle

Company Information

Coteccons Construction JSC (CTD) was established in 2004 and listed in HOSE in 2010. The company rose significantly during the 2015–2019 real estate boom, becoming the top residential contractor with a reputation for execution quality and balance sheet strength.

CTD entered a challenging period during 2020–2022 following an internal shareholder conflict, resulting in a major change in ownership structure, and a sharp down cycle in the domestic real estate market. These factors led to notable declining revenue and profitability. Since 2023, CTD has been undergoing a restructuring phase under new leadership, focusing on rebuilding its backlog, improving margins, and diversifying into industrial and infrastructure construction. Currently, CTD has a wide range of portfolios including public investment, FDI-driven manufacturing projects, as well as private-sector projects including residential developments, commercial buildings, and industrial facilities.

Financial Performance

During 2019–2021, CTD's performance deteriorated significantly during this period, as a boardroom and senior-management restructuring (a leadership conflict between major shareholders and the founding team) coincided with the COVID-19 pandemic, undermining the Company's ability to win and execute new contracts. Revenue fell 38.7% YoY to VND 14,589bn in 2020 and dropped a further 37.6% YoY to VND 9,078bn in 2021. NPAT-MI fell 53.0% YoY to VND 334bn in 2020 and collapsing 92.8% YoY to just VND 24bn in 2021, reflecting both lost project momentum and a shrinking order book.

Following the stabilization of the board and key executive positions, together with the easing of social-distancing measures, revenue rebounded 60.1% YoY to VND 14,639bn. Profitability, however, remained depressed, with NPAT-MI falling to just VND 20.7bn, weighed by large provisions for bad debts owed by financially strained real estate developers. The 2022–2023 period proved especially difficult for the construction sector, particularly residential-focused contractors like CTD, as the property market froze amid sharply higher policy rates and a collapse in bond-market confidence following the Tan Hoang Minh and Saigon Commercial Bank (SCB) scandals.

In 2024–2025, CTD staged a strong rebound, with revenue rising 44.8% YoY to VND 21,045bn and a further 18.2% YoY to VND 24,884bn. The 2025 figure reached 87.1% of the Company's 2018 peak of VND 28,561bn, confirming the restoration of both its bidding competitiveness and execution capability. NPAT-MI likewise recovered, reaching VND 309bn (versus VND 20.7bn in 2022) and then VND 456bn (+47.4% YoY), supported by top-line growth, lower provisioning expenses, and gains from divestments and M&A during the group's ecosystem restructuring. That said, gross margin remained thin at 3.3–3.4%, reflecting intense competition in the residential segment, CTD's primary revenue driver, which forced the Company to price aggressively to sustain top-line growth.

In 9M2026, CTD reported revenue of VND 23,869bn (+43.4% YoY), completing 79.6% of management's full-year guidance, with gross margin expanding 0.7 ppts YoY to 4.1%, its highest level in four years. The improvement was driven by a more favorable project mix, with a greater contribution from FDI-led industrial projects, which typically carry superior margins and stronger payment terms. NPAT surged 151.9% YoY to VND 642bn, including a one-off gain of VND 188bn from the liquidation of the Emerald 68 contract. Stripping out this item, normalized NPAT is estimated at VND 492bn, still representing robust underlying growth of 101.1% YoY.

As of 9M2026, total assets reached VND 34,686bn (+16.8% YTD). Short-term receivables stood at VND 14,975bn (-5.6% YTD), or 43.2% of total assets, well below the 2019–2025 average of around 55% and the 2022 peak of 60%. While the decline is encouraging, the absolute balance remains substantial and continues to represent a key risk to the business, particularly if the current high-interest rate environment persists, dampening sales at the residential projects CTD is building and slowing the cash collection that developers rely on to pay their contractors.

On the liabilities side, total liabilities rose 21.5% YTD to VND 25,184bn, driven primarily by a 235.5% surge in interest-bearing debt to VND 7,035bn and a 56.8% increase in customer advances to VND 7,546bn. The rise in customer advances reflects strong contract acquisition momentum and upfront payments from newly secured projects. Leverage rose accordingly, with interest-bearing debt-to-equity climbing to 74.0% from 33.3% at the start of the year, as CTD's expanding project portfolio lifted its working-capital requirements.

Investment Rationales

1.       Public Investment as a Structural Catalyst

Vietnam’s ambitious 10.0% GDP growth target, underpinned by massive public infrastructure spending, creates a sustainable pipeline for the construction sector. In 2025 alone, there were 564 projects starting construction, with a total investment of USD 220 bn. CTD’s strategic entry into infrastructure projects marks a pivotal shift to capture national-scale contracts and reduce cyclical exposure to residential markets.

2.     Residential Recovery Amid Regulatory Tailwinds

The residential sector is entering a new expansionary phase, catalyzed by the 2024 Land Law, which is expected to streamline project approvals and clear legal bottlenecks. While high interest rates and credit tightening pose liquidity challenges for developers, CTD mitigates counterparty risk through its "Selective Partnering" strategy, focusing exclusively on Tier-1 developers with proven solvency and robust cash flows.

3.     Strategic FDI & High-Spec Industrial Dominance

Vietnam remains a primary beneficiary of the "China + 1" realignment, attracting high-tech and green manufacturing giants (e.g., LEGO, Pandora). CTD’s specialized expertise in high-spec industrial EPC positions the firm to capture this premium segment, characterized by higher entry barriers and superior payment terms compared to domestic projects.

4.     Record-High Backlog Supports Long-Term Growth Visibility

CTD’s backlog reached a record high of VND 65,500bn in Q3 2026, with infrastructure projects accounting for a significantly larger proportion of total backlog. We believe Vietnam’s upcoming public investment Supercycle will provide a strong foundation for continued contract wins, supporting backlog growth and improving long-term revenue visibility, with infrastructure gradually becoming a key growth pillar for CTD. CTD’s increasing participation in infrastructure projects reflects its improving execution capability, financial strength, and bankability versus peers. We expect the gradual accumulation of track record to position CTD for more technically complex and potentially higher-margin infrastructure packages over time. Meanwhile, FDI-led industrial projects remain an important upside factor for margins, while CTD’s established residential construction franchise continues to provide a stable base for revenue generation across cycles.

5.     High Repeat Sales & Trusted Partner Status

A sizable portion of revenue is anchored by a 94.0% repeat sales ratio, reflecting exceptional execution capabilities and deep-rooted brand loyalty. In the FDI and high-end residential sectors, this "loyalty alpha" acts as a high barrier to entry for domestic competitors. Furthermore, being a "Trusted Partner" grants CTD priority access to Phase 2 and Phase 3 expansions of major industrial complexes, ensuring a sustainable and high-quality revenue stream.

6.     "Go Global" Strategy

By expanding into regional markets, CTD is de-risking its portfolio from the cyclicality of the Vietnamese property market. However, this global ambition introduces a trio of implementation risks: (i) heightened working capital requirements for cross-border performance and (ii) operational friction related to local labor laws and regulatory compliance. We view this international pivot as a long-term catalyst.

Valuation and Recommendation

We value CTD using a blended methodology combining DCF, P/B multiple and P/E multiple with 25%/25%/50% weight and arrive at a target price for FY2026 of VND 87,500/share. Based on the closing price of VND 70,800/share as of 12 Jun 2026, this implies an upside potential of 23.6%. As such, we initiate a BUY rating on CTD.