XUAN TRUONG CONSTRUCTION PRIVATE ENTERPRISE

XUAN TRUONG CONSTRUCTION PRIVATE ENTERPRISE (Doanh nghiệp tư nhân Xây dựng Xuân Trường)is one of the largest privately held construction entities in Ninh Bình, known for high-profile spiritual tourism projects and massive infrastructure works. Legally, it operates as a one-owner private enterprise, under Business ID 2700113605, with registered capital exceeding USD 616 million, an unusually high figure for a private enterprise structure in Vietnam.

Yet beneath this impressive scale, the financial and operational signals reveal significant structural risks that any investor, partner, or lender should carefully examine.

1. Extreme Asset Expansion But Almost No Profit — A Fundamental Red Flag

The company’s total assets jumped from USD 194.8 million in 2021 to USD 308 million in 2023.

However, across the same period:

• Profit was only USD 15,933

• Profit declined for two consecutive years

• Net profit margin is effectively 0.016 percent

For a company of this size, such minimal profitability suggests one of several scenarios:

• Capital is tied up in long-term projects that have not yet generated returns

• Revenue recognition may be intentionally delayed

• Cash flow could be negative despite positive revenue

• Significant assets may be non-productive or overvalued

• Excessive reliance on advances, deposits, or internal capital movement

A risk manager would immediately question whether these assets can actually be liquidated or monetized, or whether they are tied to projects with uncertain completion timelines.

2. Working Capital Deep in Negative Territory — Liquidity Risk Is High

The report shows working capital at negative USD 19.68 million, a dramatic deterioration of nearly 58 percent year-on-year.

This is a critical sign of liquidity stress:

• The company may not have sufficient short-term resources to meet obligations

• Cash cycles in construction are long and volatile

• A squeeze in payables or delays in receivables could disrupt operations

• Projects dependent on state approvals or tourism flows may face unpredictable delays

For a company managing thousands of workers and multi-year megaprojects, negative working capital can signal cash-flow pressure beneath a large but immobile asset base.

3. A One-Owner Structure With USD 616 Million in Charter Capital — Governance Risk

The enterprise is owned entirely by one individual, the director:

Nguyen V. T.

In corporate governance terms, this creates several high-risk exposures:

• No board oversight

• No separation between ownership and management

• All strategic decisions depend on one person

• Lack of an accountability mechanism

• Potential succession issues in a company with 4,000 employees

• Charter capital declared is exceptionally high relative to financial performance

A private enterprise of this size operating without the checks and balances of a joint-stock structure is highly unusual and raises questions about internal control systems and transparency.

4. Revenue Growth Without Matching Profit — Operational Efficiency Concerns

Sales almost doubled in 2022 and continued to rise in 2023, reaching USD 96.39 million.

Yet profits continue to fall. This may indicate:

• Rising material costs have not passed to customers

• Inefficient cost management

• Revenue concentrated in low-margin contracts

• Contractual obligations that leave little room for profitability

• Aggressive bidding or political obligations in tourism-related megaprojects

If revenue is rising but profit is shrinking, the operational model may be under strain.

5. Conclusion: A High-Scale Company With Very High Risk Signals

On paper, XUAN TRUONG CONSTRUCTION PRIVATE ENTERPRISE looks enormous.

But from a risk management perspective, it presents multiple structural warning signs:

• Extremely low profit despite massive scale

• Negative working capital

• Sharp declines in profit

• Extraordinary asset growth without transparency

• A one-owner governance model for a company handling hundreds of millions of dollars

• Heavy exposure to significant tourism and infrastructure projects that depend on state approval, capital intensity, and long ROI cycles

For lenders, suppliers, or partners, this is a company that requires deep due diligence beyond surface financials.

The updated VNBIS Comprehensive Report, including FS2024, cash flow analysis, debt schedule, related-party transactions, and project-based financial segmentation, will be essential for understanding the real financial health of this giant.