WHERE ARE REAL ESTATE COMPANIES GENERATING PROFITS AS HOME SALES SLOW?

Profit Recovery Remains Uneven

The second-quarter 2026 earnings season showed an improvement in profitability among listed real estate companies compared with the same period last year.

According to TCBS’s industry report, 15 monitored real estate companies recorded combined net profit of nearly VND 29.815 trillion in the second quarter, up 265% year on year. However, more than 90% of the total profit came from two companies, Vinhomes and KSF.

Excluding these two companies, the remaining 13 businesses posted approximately VND 3.465 trillion in pre-tax profit. Notably, only around VND 312 billion, or roughly 9%, came from core business operations.

These figures indicate that the overall increase in industry profits does not necessarily reflect a broad-based recovery in core real estate operations.

Property Sales Are Not Yet the Main Profit Driver for Many Companies

Property sales and project handovers are typically the main sources of revenue for real estate developers. However, differences in legal progress, construction schedules, and handover timelines have resulted in significant variations in performance across companies.

DIC Corp reported approximately VND 613 billion in second-quarter revenue, up 125% year on year. Despite the increase in revenue, the company recorded a loss of around VND 11 billion from its core business operations.

Hodeco also posted nearly 18% revenue growth to approximately VND 94 billion, but its core business still recorded a loss of around VND 10 billion. Meanwhile, DXG generated nearly VND 788 billion in revenue, up more than 7%, while profit from core operations stood at only around VND 7 billion, a substantial decline from the same period last year.

These results suggest that higher revenue does not necessarily mean that the efficiency of property development and sales operations has recovered at the same pace.

Some Developers Continue to Generate Strong Profits from Property Sales

In contrast, developers with projects entering the revenue-recognition and handover stages continue to have the ability to generate significant profits from their core operations.

Vinhomes is a notable example. In the first half of 2026, the company recorded more than VND 116.5 trillion in revenue, of which over VND 94.3 trillion came from real estate business activities.

This highlights the importance of project development, sales, and handover schedules in determining when developers can recognize revenue. Companies with projects that are well-positioned in the market and entering the handover stage may see a clearer improvement in their core business performance.

Investment Transfers and Divestments Become Significant Sources of Profit

When property sales have yet to recover strongly, transferring part of a project or divesting from investments can provide developers with additional profit and liquidity.

Khang Dien is one example. In the second quarter, the company’s net revenue fell 85% to nearly VND 161 billion, yet it still recorded nearly VND 750 billion in profit. The result was mainly supported by nearly VND 900 billion in financial revenue related to the transfer of its stake in the Binh Trung Moi project. Meanwhile, its core business recorded a loss of approximately VND 53 billion.

Phat Dat recorded less than VND 54 billion in net revenue but generated more than VND 474 billion in financial revenue from the disposal of an investment.

For Novaland, property sales revenue fell 22%, while financial revenue reached approximately VND 1.741 trillion. This income mainly came from lending activities, investment cooperation arrangements, divestments of subsidiaries, and the recovery of investments. Profit from core business operations was only around VND 23 billion.

These cases show that developers can generate profits even when property sales remain relatively weak by restructuring their asset portfolios and realizing the value of existing investments.

Cash and Financial Investments Also Contribute to Earnings

Investment transfers and project divestments are not the only sources of additional income. Cash holdings and financial assets accumulated by developers can also generate meaningful revenue when property sales remain subdued.

Nam Long, for example, held more than VND 3 trillion in bank deposits. As a result, its second-quarter financial revenue more than doubled to nearly VND 91 billion, mainly from interest income on deposits and lending activities.

In an environment where interest income remains a meaningful source of revenue, companies with substantial cash reserves can supplement their profits through financial activities. However, such income cannot necessarily replace the long-term earnings generated by property development and sales.

One-Off Income Can Significantly Boost Short-Term Profits

Another factor that should be considered when analyzing real estate financial statements is income arising from asset revaluation, bargain purchases, or adjustments to financial obligations.

An Gia recorded nearly VND 283 billion in second-quarter profit despite revenue falling by almost half. The result was supported by more than VND 165 billion in income from the revaluation of an investment following an increase in its ownership stake in Loc Phat, as well as approximately VND 143 billion in gains from a bargain purchase.

Hodeco also recorded nearly VND 118 billion in other income related to the reassessment of land-use fees for the Light City project.

Such income items can significantly increase reported profits during a particular period. However, because they may not recur regularly, investors and market participants need to separate these items from recurring earnings when assessing a company’s ability to generate sustainable profits.

Profitability Needs to Be Viewed Alongside Cash Flow and Core Operations

Differences in the sources of profit show why net profit alone may not provide a complete picture of a real estate company’s recovery.

A company may report strong profits from asset transfers or divestments, but this does not necessarily mean that property sales or cash generation from development projects have improved by the same degree.

Conversely, developers with projects that have completed the necessary legal procedures, are progressing according to schedule, have strong sales, and are entering the handover phase have a stronger basis for generating revenue from core operations. This is particularly important for maintaining earnings in subsequent periods.

According to TCBS, the industry’s recovery remains uneven. Companies with projects that have completed legal procedures, achieved solid sales, or entered the handover cycle are better positioned to improve core operating results. Meanwhile, developers with large inventories or projects that are not yet eligible for revenue recognition may continue to rely on asset transfers, divestments, and financial income to strengthen their resources.

SSI Research also noted that second-quarter profit growth was concentrated among several major developers, while performance varied across companies depending on project handover schedules and other income items. High financing costs continue to put pressure on demand and inventory levels, potentially affecting profit growth in the period ahead.

Sales Performance Remains a Key Indicator

In the short term, asset transfers, divestments, and financial income can help developers improve reported earnings and strengthen their financial resources. These activities may also form part of a company’s broader strategy for managing its asset portfolio and cash flow.

However, as one-off income gradually declines, sales performance, project handover progress, and cash flow generated from core operations will become increasingly important indicators of earnings quality.

For real estate companies, a sustainable recovery is reflected not only in higher profits, but also in their ability to bring projects to market, convert inventory into revenue, collect payments from customers, and maintain the efficiency of core operations.

The key question, therefore, is not simply how much profit a company generates, but where that profit comes from and how sustainable it is in the periods ahead.