Vingroup's VEF: A High-Conviction Play in Vietnam's Booming Exhibition and Real Estate Sectors

Vietnam's economic recovery and rapid urbanization are creating a fertile ground for high-growth opportunities, and Vingroup's Vietnam Exhibition Fair Center JSC (VEFAC) is emerging as a standout player. With a 2025 net profit surge of VND15.25 trillion ($581.73 million)—an 8,372% year-on-year jump—VEFAC is rewriting the narrative for Vietnam's real estate and infrastructure sectors. This explosive growth, coupled with a 435% cash dividend payout and a $180 million infrastructure project in Hanoi, positions VEF as a compelling investment for those seeking exposure to Southeast Asia's next growth story.

Profit Surge: A Real Estate Gold Rush

VEFAC's first-half 2025 performance is nothing short of extraordinary. Revenue exploded to VND44.57 trillion ($1.7 billion), an 86-fold increase compared to 2024, driven by the sale of high-value units in projects like Vinhomes Co Loa and 148 Giang Vo. This surge reflects Vietnam's urbanization boom, where Hanoi's apartment prices rose 22.3% YoY in Q3 2024, fueled by regulatory reforms and investor demand.

The company's asset base, while reduced due to inventory sales, now sits at VND36.24 trillion ($1.39 billion), with liabilities slashed to VND24.22 trillion ($926.4 million). This deleveraging, combined with a tripling of equity to VND12.02 trillion ($459.86 million), underscores VEFAC's financial discipline and ability to reinvest in high-margin projects.

Infrastructure Expansion: Building the Future

VEFAC's $180 million Giang Vo project in Hanoi is a cornerstone of its 2025 strategy. The 900,000-square-meter complex, featuring 304,000 square meters of exhibition space, is poised to become Southeast Asia's largest exhibition center. With 6.8 hectares of land converted for commercial use, the project aligns with Vietnam's 45% urbanization target by 2025, which is driving demand for modern infrastructure.

The company's partnership with Vingroup's Vincons subsidiary ensures execution expertise, while its $312.8 million National Exhibition Center in Dong Anh district further diversifies its footprint. These projects are not just capital expenditures—they're bets on Vietnam's long-term urbanization trajectory, where the government plans to build 1 million social housing units by 2030 and attract $25.4 billion in FDI for logistics and manufacturing in 2024 alone.

Dividend Proposal: A Shareholder-Friendly Approach

VEFAC's 435% cash dividend of VND43,500 ($1.60) per share—worth $277.3 million—is a bold move in a market where many real estate firms prioritize reinvestment over payouts. For Vingroup, which holds an 83.32% stake, this translates to a $231 million windfall, reinforcing its broader strategy of returning value to shareholders. The payout also signals confidence in VEFAC's ability to sustain cash flows, even as it funds massive infrastructure projects.

Economic and Urbanization Tailwinds

Vietnam's 2024 GDP growth of 7.09%—driven by a services sector contributing 49.46% to GDP—provides a robust backdrop. Urbanization is the engine: Hanoi's rental prices hit $178/m²/month in 2024, while Ho Chi Minh City's logistics sector is booming due to the “China+1” manufacturing shift. VEFAC's projects, particularly in Hanoi's Dong Anh district, are strategically located to capitalize on these trends.

The government's push for transparent land pricing and affordable housing also benefits VEFAC. With 597,152 social housing units in the pipeline, the company's mixed-use developments align with policy goals, reducing regulatory risks and ensuring long-term demand.

Risks and Considerations

Despite the optimism, challenges persist. VEFAC's reliance on Chinese-sourced equipment for renewable energy projects exposes it to U.S. tariffs (up to 813.92% on Vietnamese solar exports). Additionally, grid infrastructure lags behind renewable capacity, with only 2% of 86 GW of prospective solar/wind projects under construction.

However, VEFAC's $434.7 million capital raise in 2023—via a 5.12:1 share subscription—demonstrates strong investor confidence. The funds are allocated to projects with $1.49 billion in total capital, suggesting a disciplined approach to scaling.

Investment Thesis

VEFAC is a high-conviction play for three reasons:
1. Profitability: A 2025 net profit surge of $581.73 million (up 8,372%) and a 435% dividend yield a compelling risk-reward profile.
2. Infrastructure: $180 million in Hanoi projects align with Vietnam's urbanization goals, ensuring long-term cash flow.
3. Strategic Positioning: Vingroup's ecosystem provides execution expertise, while government policies reduce regulatory uncertainty.

For investors, the key is timing. With VEF's stock price showing 12-month volatility (see