Hanoi, 14 June 2023 

FiinRatings is pleased to announce that it has assigned a first-time Long-Term Issuer Credit Rating of ‘BBB’ to Coteccons Construction Joint Stock Company (“Coteccons” or “the Company”) with the Stable rating outlook. 

The stable outlook on Coteccons reflects our expectation that the Company will maintain the rating score for the next 12-24 months, thanks to its satisfactory competitive position in the construction industry in Vietnam. The Company's good reputation and its good track record of project execution will continue to support its ability to acquire new contracts. This is expected to give Coteccons more bargaining power so that the Company does not have to pursue a price competition strategy, therefore supporting its more stabilized profitability in the upcoming time. Additionally, the stable outlook also indicates our expectations that the Company's business performance along with relatively low debt leverage can generate certain capital buffer to withstand moderate volatility in an unfavorable environment. 

Upgrade Scenario: 

Factors that could, individually or collectively, lead to review for positive rating action or upgrade for Coteccons: 

• Consistent track record of positive discretionary cash flows and liquidity metrics that are better than FiinRatings’ base-case projection; 
• Coteccons have a more financial flexibility by obtaining progress payments from its clients and enhancing working-capital generations resources; 
• Profitability metrics significantly improve in comparison to our base-case projection and above industry average. 

Downgrade Scenario: 

Factors that could, individually or collectively, lead to review for negative rating action or downgrade: 

• Coteccons’ advance payments deteriorate, or the quality of receivables weakens, and other operating deterioration that impair working capital inflows; 
• Rising operating cost and/or project cost overrun that hinder the Company’s profitability;  
• Coteccons’ business expansion (for example, into more property development that destabilize working capital) is overly aggressive, as indicated by the debt coverage ratios declining;  
• Worsen and unfavorable macro trends that impact on the real estate and construction industry

Read the full rating announcement HERE

Notice: Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. FiinRatings’ opinions, analyses, and rating acknowledgment decisions are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security.

About FiinRatings

FiinRatings Joint Stock Company, a member of FiinGroup and a technical collaboration partner with S&P Global Ratings, is a local licensed Credit Rating Agency in Vietnam. FiinRatings provides credit ratings and related services to issuers, creditors and investors in Vietnam credit market. FiinRatings is also Vietnam first green bonds approved verifier, in accordance with the green bond international standard by the Climate Bonds Initiative. For more information, please visit https://www.fiinratings.vn.

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