BUSINESS NEWS 13/5

Seafood, textile stocks soar thanks to good business performance

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Positive business results together with the expectation of benefiting from free trade agreements helped seafood and textile stocks shoot up in the past year. 

Concerning the fisheries industry, pangasius processing companies saw prosperous business results over the past year. Shares of Cửu Long Fish Joint Stock Company (ACL) were traded at around VNĐ10,000 (US$0.43) per share in April, 2018. Closing the trading session of April 10 this year, ACL reached VNĐ39,550 per share, up nearly four times after a year.

In 2018, ACL collected post-tax profit of VNĐ230 billion, about 11 times higher than 2017. The company also exceeded 320 per cent of the 2018 profit plan.

Vĩnh Hoàn Corporation’s shares (VHC) started to climb in the second quarter of 2018 when its quarterly profit doubled compared to the same period of the previous year.

In the following quarters of 2018, VHC also achieved impressive profit results. Therefore, the price of VHC shares soared from VNĐ50,000 per share in early 2018 to VNĐ110,000 per share on November 23, 2018. On Friday, VHC shares were priced at VNĐ89,800 per share. VHC is currently leading the market in export value of pangasius, reaching $378 million in 2018, up 26 per cent year-on-year. In 2018, VHC reported post-tax profit of VNĐ1.4 trillion, up strongly by 138.5 per cent year-on-year.

Similarly, in the past year, shares of another pangasius processor, Nam Việt Corporation (ANV), also rose from VNĐ15,000 per share in August, 2017 to VNĐ30,000 per share at present, equivalent to an increase of nearly 100 per cent. In 2018, ANV reported after-tax profit of over VNĐ600 billion, up 4.2 times compared to 2017.

The company with the most impressive business performance was Camimex Group JSC (CMX), a shrimp producer. CMX shares shot up from around VNĐ5,000 per share in mid-August 2018 to around VNĐ24,500 currently. In 2018, CMX reported after-tax profit of VNĐ78 billion, an increase of 192 per cent compared to 2017. In 2019, CMX also set an after-tax profit target of VNĐ199 billion, a 155 per cent increase compared to 2018.

Shrimp stocks also received a boost from news that the US has exempted anti-dumping tariffs for shrimp exporters of Việt Nam, announced on April 10. Right after the information was released, the seafood stocks rocketed up.

In the context of the escalating US-China trade war, signed free trade agreements have brought about expectations of more orders, the textile industry will benefit greatly. Business results of many companies in the industry recorded growth in 2018, leading to the upswing of textile stocks.

Shares of TNG Investment and Trading JSC (TNG) climbed from VNĐ10,000 per share in early 2018 to reach VNĐ23,100 per share currently, equivalent to a hike of more than 100 per cent. At the end of 2018, TNG achieved post-tax profit of VNĐ180 billion, up by 60 per cent year-on-year.

Another textile and garment stock seeing gains was Thành Công Textile Garment Investment Trading Joint Stock Company.

In the second half of 2018, TCM shares had an impressive increase from the bottom of VNĐ15,950 per share to VNĐ23,000 per share. In October 2018, TCM reached its peak over the last two years of VNĐ30,000 per share. At the end of 2018, TCM achieved profit of VNĐ260.4 billion, 1.3 times higher than the same period in 2017.

On Friday, TCM was traded at VNĐ31,550 per share, surpassing the old peak in 2018.

Shares of Saigon Garmex Manufacturing Trade Joint Stock Company (GMC) also increased sharply from VNĐ25,000 at the beginning of 2018 to VNĐ50,000 per share in early this year. GMC collected profit of VNĐ135 billion in 2018, doubling that of 2017. 

VN stocks expected to decline, hopes rest on banks

Vietnamese shares may continue declining this week, dragged down by the impact of recent US-China trade talks and a lack of corporate news, analysts said.

The benchmark VN-Index on the Ho Chi Minh Stock Exchange ended last week at 952.55 points, for a total weekly loss of 2.22 per cent.

The HNX-Index on the Ha Noi Stock Exchange fell 0.94 per cent last week to end at 105.86 points.

The VN-Index and HNX-Index have lost a total 2.76 per cent and 1.49 per cent so far in May, respectively.

The Vietnamese stock market experienced strong pressure from international markets last week as investors displayed their concern about the escalation of the US-China trade tensions.

The US on Friday raised tariffs on US$200 billion worth of Chinese goods to 25 per cent from 10 per cent.

Despite positive progress made by the world’s two largest economies in last week's talks, US President Donald Trump said he would impose higher tariffs on all Chinese goods if the two sides could not reach a deal within one month.

That threat may rattle global financial markets over the next month, and Vietnamese shares are no exception.

The Vietnamese stock market needs some time to calm down, especially as local firms are not supplying corporate news and international markets are highly risky, said Tran Duc Anh, head of macro-economics and market strategy at KB Vietnam Securities.

“Friday’s gain was more like a technical rebound that followed the market’s previous shocking declines,” he told tinnhanhchungkhoan.vn.

“The market will need to fall and settle at a lower level so that potential risks are fully priced in before making a recovery,” Anh said.

Speaking about the trade war between China and the US, Anh said there are two main impacts on the Vietnamese economy and equity market.

The first is the pressure on Viet Nam’s exchange rate, he said. The US dollar will get stronger while the Chinese yuan weakens, so the central bank will bear double pressure in controlling the Vietnamese dong against the two currencies.

“Every time the Vietnamese dong weakens against the dollar, foreign investors net-sell their local assets and pressurise the equity market,” Anh said.

Foreign investors net-sold a total of VND522 billion ($22.3 million) worth of Vietnamese shares last week (May 6-10). They net-bought a total of VND171 billion ($7.3 million) between April 22 and May 3.

The trade war will also re-direct global trade, having an unpredictable impact on the Vietnamese economy and equity market in the long run, Anh said.

“It may deter global economic growth, pull down Viet Nam’s export and hurt the operation of the Vietnamese firms that are in the value chain set up by Chinese and US companies,” he added.

According to securities firms, the trade tensions have dampened investors’ confidence in the market and brought down trading liquidity to a very low level.

Trading volume through order-matching transactions reached an average of 148 million shares in each session.

Investors are waiting for more positive information of the stock market before buying in stocks again, Sai Gon-Ha Noi Securities JSC (SHS) said in its weekly report.

“In my view, the cautious stance would still be the main attitude toward the stock market in the coming week,” Anh from KB Vietnam Securities said.

Friday's modest gain does not mean all bad news has been overcome and the market will simply bounce back, said Hoang Thach Lan, head of the individual investor department at Viet Dragon Securities.

“My technical indicators remain negative and the market will likely continue its downturn,” Lan said.

Hopes rest on banks

Bank and petroleum stocks are expected to cushion the stock market in the short term, analysts said.

“The banking sector is one of a few industries that showed earnings growth in their Q1 financial reports,” Anh said. “Shares of large-cap banks should be eyed now for the good quality of assets and performance in the next quarters.”

Energy stocks have been boosted by the rise of oil prices since the beginning of the year. However, they should not be a target for the short term as oil prices are likely to fall soon, Anh added.

Analyst Vu Minh Duc of Viet Capital Securities Corp’s research and analysis department said energy stocks are now slightly overvalued while bank shares have become attractive following their recent downturns. 

National quality awards to honour 75 businesses

Seventy-five businesses will be honoured with the Vietnam National Quality Awards 2018, of which 22 will be presented with the golden prize.

The list of winners was recently approved by Prime Minister Nguyen Xuan Phuc.

Among the golden award winners, nine are big production businesses, including DOMESCO Medical Import-Export JSC, Viglacera Corporation, An Phat Plastic and Green Environment JSC, and Tan Hiep Phat Service and Trading Co. Ltd.

Eight others are small- and medium-sized production firms, and five are small- and medium-sized service companies.

Meanwhile, the remaining 53 award winners include 20 big production companies, 21 small- and medium-sized production companies, one big service company, and 11 small- and medium-sized service ones.

The Vietnam National Quality Awards are the Prime Minister’s annual recognition of organisations and enterprises with remarkable quality achievements in production, business activities and services, thus helping to promote the standing of Vietnamese products and services in the domestic and foreign markets.

The awards, first presented in 1996, were initiated by the Directorate for Standards, Metrology and Quality under the Ministry of Science and Technology.

PM hopes Vietnam Airlines to become 5-star airline soon

As a national flag carrier and reserve force for national security and defence, Vietnam Airlines should strive to become the first 5-star airline of Vietnam in the earliest time, Prime Minister Nguyen Xuan Phuc has said.

He made the statement while attending a ceremony in Hanoi on May 11 to celebrate the 60th founding anniversary of 919 Transport Air Force Regiment, the predecessor of Flight Crew 919, which is Vietnam Airlines today.

From a regiment in the past, Flight Crew 919 has now become a core unit of the 4-star airline, he said, adding that it has been taking the lead in applying the world’s most advanced technology, training and managing over 1,000 pilots, including foreign ones, to operate a series of new generation aircraft to transport passengers and goods safely.

The PM expressed his pleasure at the increasing number of Vietnamese pilots in Vietnam Airlines, accounting for up to 75 percent.

Vietnam Airlines can fully master the world's most advanced aircraft generations such as Boeing 787 and Airbus 350, he said proudly.

The PM recalled the historical achievements of the Vietnam civil aviation in 2011 when Vietnam Airlines and Flight Crew 919 conducted 10 flights by Boeing 777 on 14 consecutive days, safely transporting over 3,000 Vietnamese citizens to return home and nearly 13.5 tonnes of relief goods in a campaign to save Vietnamese workers from Libya’s civil war.

While stressing the role of Vietnam Airlines and the civil aviation sector in the country’s new period of economic development, the Government leader asked the airline to exert more efforts to realise the goal of making tourism a spearhead economy, accounting for over 10 percent of the national gross domestic product (GDP).

He asked the airline to ensure the maintenance of flight safety and provision of high-quality human resources.

The PM also assigned the State Capital Management Committee at Enterprises and the Ministry of Transport to focus on directing Vietnam Airlines in the process of equitisation and restructuring to guarantee efficiency and prevent negative phenomena.

On the occasion, he presented the second-class Independence Order to Flight Crew 919.

Vietnam Airlines, a member of SkyTeam alliance, is operating 90 domestic and international air routes.

New GM for Alba Wellness Valley by Fusion

Wellness-inspired hospitality brand Fusion has announced it has engaged former team member Hylton Lipkin as General Manager of Alba Wellness Valley by Fusion, a natural hot springs resort and hotel on the outskirts of Vietnam’s imperial capital Hue.

A South African, Mr. Lipkin has spent the last two decades honing his spa and management skills around the globe, with roles in the Middle East, Europe, the US, and Asia-Pacific. His most recent role was as General Manager of the boutique Lao Poet Hotel in the Lao capital Vientiane, where he guided the team through pre-opening.

Prior to that he was part of the Fusion organization, working as Executive Assistant Manager of Fusion Resort Phu Quoc, where he was also involved with pre-opening and the running of the property once it debuted. Among other tasks, he was key in developing the property’s wellness concept.

“Hylton’s in-depth knowledge in the spa industry helped shape Fusion Resort Phu Quoc into the success it is today,” said Atilla Erda, the group’s Chief Operating Officer. “His proven experience at Fusion and throughout his career places him in the perfect position to bring Alba to the next level and put it on the map as a must-visit destination for hot spring lovers.”

Alba Wellness Valley, with its natural, mineral-rich hot springs, authentic Japanese-style onsen and open-air geothermal baths, is a member of Openasia group.

Established in 1994 as an investment firm operating in Vietnam, Openasia has rapidly developed into a diversified group of companies led by a strong sense of entrepreneurship. It now manages seven divisions and employs more than 1,500 staff working in sectors including fashion, craft, technology and hospitality.

Alba Wellness Valley joined the Fusion portfolio in December 2018, as the first existing hotel to be managed by the group.

Since its launch in 2008, Fusion has become a leading innovator of wellness-inspired hotels and resorts and is now the only fully vertically-integrated hospitality company in Southeast Asia. Under one roof, Fusion conceptualizes, designs, builds, and manages beachside resorts and city hotels through its uniquely-branded hospitality concepts.

It has opened six resorts and hotels in Vietnam, with a team now boasting more than 1,800 employees, including 300 spa specialists. Guests can experience Fusion’s original “all-spa inclusive” concept, and “breakfast anywhere anytime” service, along with its inventive approach to the hospitality sector in Da Nang, Cam Ranh, Ho Chi Minh City, Hue, and Phu Quoc. The Fusion catalogue of brands currently includes Fusion Resorts, Fusion Suites, Fusion Originals, and Alba Wellness Valley by Fusion.

MXP proposes solutions for apparel sector in CPTPP

MXP (Manufacturing Sportswear JSC) proposed six strategic solutions to the government and leaders of the Vietnam Textile and Apparel Association (VITAS), the Vietnam Leather, Footwear and Handbag Association (LEFASO), and the Vietnam Association of Seafood Exporters and Producers (VASEP) on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) at the Vietnam Private Sector Forum 2019.

The proposals include 1) Creating a policy for Vietnamese banks to grant credit and disburse funds for businesses with sustainable production activities; (2) Eliminating discrimination in the apparel industry and creating equal competition between Vietnamese and FDI enterprises; (3) Designing a mechanism to cut corporate income tax to support enterprises creating many jobs; (4) Appealing to the government to create stipulations for companies with over 10,000 employees to provide reserve funds to provision against unemployment contingencies; (5) Asking the government to issue a minimum wage schedule for the coming five and ten years; and (6) Revising regulations for a maximum total overtime of 40 hours per month, instead of the current 30 hours.

“MXP has pioneered the application of 4.0 technologies to increase workplace productivity and management capacity, partnering closely with suppliers of raw materials to open the way for FOB (Free on Board) customers who are readily integrated in the global fashion industry’s value chain,” said Mr. Tran Quang Hao, MXP’s Sales Director. These strategic shifts will aid businesses in adapting and capturing the impending wave of business from the CPTPP, increasing the value of Vietnamese export enterprises.

One of the leading textile and apparel manufacturing and exporting companies in Vietnam, MXP produced more than 10 million items in 2018.

The private enterprise economic forum was held on a national scale, focusing on key strategic macroeconomic issues and policies regionally and globally. MXP represented the voice of the private sector in discussing and designing solutions with economic ministries and industry experts to promote Vietnam’s export industry amid the CPTPP.

THACO to invest $86mn in agri industrial park in Quang Nam

The Truong Hai Auto Corporation (THACO) has plans to invest up to VND2 trillion ($86 million) in the 451-ha THACO - Chu Lai Agriculture and Forestry Industrial Park in central Quang Nam province’s Nui Thanh district.

The Ministry of Planning and Investment has submitted documents to the Prime Minister for a decision on the project. Of the total investment, VND632.5 billion ($27 million) will be contributed by the corporation from January 1, 2019 to December 2022, with loans of VND1.462 trillion ($62.5 million) coming from Vietcombank’s Quang Nam branch.

THACO held a breaking ground ceremony for the industrial park in March 2019.

Project objectives are investing, constructing, and trading in industrial park infrastructure; producing and supplying agricultural materials and plant research and development; processing and preserving fruit, vegetables and aquatic products; producing food and packaging materials for agriculture; producing products from rubber latex and medicinal plants; and training personnel for agricultural production and cold storage business services.

THACO has already registered the project’s operational duration of 70 years, but the Ministry of Planning and Investment has proposed a duration of 50 years, with an extension considered based on actual implementation and legal provisions.

The ministry assigned the Quang Nam Provincial People’s Committee to be responsible for matters prescribed by law and ensuring project implementation is in accordance with local socioeconomic, infrastructure and other development plans.

Quang Nam also needs to ensure the investor’s right to use investment locations without disputes and complaints about land use rights.

Established in 1997, THACO is renowned for its automobile manufacturing, assembly, and distribution of and spare parts and maintenance services for commercial vehicles (trucks and buses) and motor cars from names such as Kia (South Korea), Mazda (Japan), and Peugeot (France).

The corporation was selected as the importer and distributor of luxury BMW and Mini vehicles in Vietnam by BMW Group Asia on January 1, 2018.

Vietnamese-German cooperation brings solar power to An Giang

An inauguration ceremony for a 3 kWp photovoltaic (PV) demonstration system in the An Giang Provincial Department of Industry and Trade (DoIT) building in Long Xuyen city was held on May 10.

The project is within the framework of a partnership between the Mekong Delta’s An Giang province and the German province of Mecklenburg-Vorpommern.

The installation of one of the first rooftop solar PV systems in the province has been completed, with an installed capacity of 3 kWp, and is part of the joint “Energy Transition in Partnership” project of the two provinces.

The ceremony was attended by Mr. Doan Minh Triet, Deputy Director General of An Giang’s DoIT, Mr. Rainer Brohm, an International Advisor at GIZ, and representatives from government agencies, local investors, and energy experts.

An Giang and Mecklenburg-Vorpommern initiated the “Energy Transition in Partnership” project in 2017, under the “German Government and Federal State Pilot Programme”, which is financed by Germany’s Federal Ministry for Economic Cooperation and Development (BMZ). The project is being implemented in cooperation with the MoIT/GIZ Energy Support Programme, which has supported Vietnam’s renewable energy sector since 2009.

The demonstration system, with total investment of approximately $15,000 and using German-made equipment and components, was installed by Raach Solar, a German engineering company with an international track record in rooftop solar installations. The projected annually-generated solar electricity of 3,546 kWh will supply power to the DoIT building and be managed by the department’s energy experts. The system will help curb emissions of 2.1 tons of CO2 each year and thus be an integral part of the province’s strategy to combat climate change and transition to clean energy.

“Exploring and realizing our province’s renewable energy potential is one of our focuses to diversify sources, so we can meet increasing local energy demand and contribute to national climate change mitigation, environmental protection, and GHG emission reductions,” Mr. Triet said at the ceremony. “The DoIT welcomes all stakeholders and citizens to An Giang province to study the model. I hope this will help energy companies, experts, and local investors gain a better understanding of the operation of solar rooftop systems and get ready for upcoming renewable energy projects.”

“GIZ has been coordinating this unique Vietnamese-German project since 2017 and we are happy to see that the demonstration rooftop solar PV system is completed and now been handed over to An Giang’s DoIT,” said Mr. Brohm. “The system includes a screen at the main entrance of the building showing actual power performance and environmental benefits. We hope it helps to raise awareness about solar energy in An Giang and serves as a concrete example for the development of more solar PV rooftop projects in the province in the future.”

Following the inauguration ceremony, the DOIT and GIZ organized a one-day training course on rooftop solar systems installation, operations, and maintenance for the department’s experts, other local energy experts, and project developers.

As part of the project, a delegation of An Giang officials visited Mecklenburg-Vorpommern in 2017 to intensify contacts with local government and learn about renewable energy facilities and management schemes in northeastern Germany. Experts from An Giang province and the north-central province of Ha Tinh participated in an internship program in Mecklenburg-Vorpommern last September, to work on renewable energy projects in German companies and receive further training. In November, GIZ and An Giang’s DoIT organized workshops and training on renewable energy for 172 participants from provincial and district authorities as well as private investors, service providers, and education institutions.

The An Giang Provincial People’s Committee has approved a Solar Energy Development Plan for the 2020-2030 period with anticipated capital of VND18.3 trillion ($789.5 million). Installed capacity for 2020 is projected at 250MWp, generating 361.4 million kWh per year. The figures will increase to 807MWp and 1,166.7 million kWh between 2020 and 2030.

Fair treatment deemed boost to private firms

 

Equal treatment and support from state agencies are needed to bolster the development of local private firms, insiders have noted.

Agricultural firms are put at a distinct disadvantage as they meet many difficulties in accessing commercial loans and struggle to mobilize capital from other sources. (Illustrative photo)

Despite being an essential part of the Vietnamese economy, local private sector has enjoyed only modest development, frequently falling short of expectations. Experts and businesspeople have blamed this on headwinds from the domestic business climate.

Dr. Bui Quang Tuan, head of the Vietnam Institute of Economics, said an array of inadequacies and shortcomings have hindered economic development, whilst the room to boost the existing growth model has been depleting.

Tuan urged concerted efforts into fostering economic restructuring and shifting the model from wide-scale growth to in-depth one, thus helping to better competitive edges for private firms and give a fresh impetus to the sector’s overall development.

Addressing the Vietnam Private Sector Economic Forum 2019 last week in Hanoi, Nguyen Thanh Ha, chairwoman of the budget carrier Vietjet Air, suggested that the Government and the Ministry of Transport should give additional priority to the planning of local infrastructure projects, especially airports and railways, as well as create more favorable conditions for competent private firms to take part in such projects.

Ha said that private firms want to receive equal treatment from state management agencies in order to help them fully tap into their capacity and advantages.

With the aim of further boosting agricultural development, Thai Huong, Chairwoman of the TH Group, called for greater efforts to carry out pilot schemes on developing high value agro-aquatic products which are likely to meet increasingly stringent requirements of importers.

In order to realize the schemes, she underscored the need to make insightful analysis of both target markets and product categories. This preparation should be coupled by the restructuring of local agricultural production and the development of specialized product chains for overseas markets, most notably fresh milk to the Chinese market and shrimp for the US, Canada, and the EU.

The TH chairwoman stressed the identification of top agricultural firms as a must to put forth mechanisms and policies aimed at leveraging their development.

Vu Thi Van Phuong, Chairwoman of VietRAP Investment JSC, said agricultural firms reportedly face various difficulties in accessing commercial loans while exposing themselves to various risks from extreme weather, climate change, and fluctuations in sales and distribution networks.

Hences, they must struggle to mobilize capital from other sources, Phuong said, adding this puts them at a distinct disadvantage.

Meeting seeks to boost financial solutions for businesses

A meeting held in Hanoi on May 10 discussed financial solutions for businesses amid the current context in which roughly 20 percent of firms in need of funding still have problems gaining access to credit.

Capital is one of the most indispensable resources for business development, with credit playing a significant role.

Most businesses have great demand for loans, according to a survey of businesses in the Red River Delta region conducted by the Vietnam Chamber of Commerce and Industry (VCCI).

The VCCI said due to weakness in corporate governance and a lack of transparency in financial activities, many companies, especially small- and medium-sized enterprises (SMEs), have failed to persuade banks and other credit organisations to provide credit for them.

It added that in order to help firms access credit sources, concerted solutions need to be carried out by companies themselves, as well as credit organisations, ministries, and sectors.

MA Nguyen Viet Hung from the Ministry of Finance’s Department of Banking and Financial Institutions pointed out several of the shortcomings in capital support mechanisms and policies for SMEs. Some mechanisms and policies are lagging behind reality, while others are simply not really feasible. Meanwhile, the capacity of financial institutions remains modest.

The finance ministry will continue working to fine-tune policies supporting businesses’ access to credit from state-owned financial institutions. It will also simplify lending procedures, borrowing conditions, and collateral, he noted.

Meanwhile, the State Bank of Vietnam (SBV) will continue the current proactive and flexible monetary policy that is connected with the fiscal policy and other macro-economic policies, thereby helping control inflation and ensure stable interest and exchange rates.

The credit organisation restructuring and non-performing loan settlement will also be promoted so as to foster credit sources for the economy, according to Nguyen Xuan Bac from the SBV’s credit department.

In addition, the central bank will overhaul the legal framework to create more favourable conditions for all economic sectors to access loans, develop new credit products and banking services, and work with local authorities to boost companies’ credit relations with banks, he added.

Vinacomin's revenue rises in four months

The Viet Nam National Coal and Mineral Industries Group (Vinacomin) posted revenue of nearly VND43 trillion (US$1.84 billion) in the first four months of 2019, up 4 per cent year-on-year.

The group's four-month revenue fulfilled 34 per cent of its yearly target, online newspaper vietnamfinance.vn reported.

During the reviewed period, Vinacomin churned out a total 14.86 million tonnes of coal, 11 per cent higher than the same period last year.

It sold about 15 million tonnes of coal and produced more than 445,500 tonnes of aluminium in the period. The group also generated 3.55 billion kWh of electricity in the four months.

In April alone, it produced nearly four million tonnes of coal, reaching the amount for the second consecutive month.

In May, the company targets coal output of between 3.8 and 4 million tonnes, as well as 116,000 tonnes of aluminium and 900 million kWh of electricity.

By year-end, Vinacomin has targeted to exploit 40 million tonnes of coal. Of the sum, 32 million tonnes will be supplied for electricity generation.

Last year, the group recorded revenue of VND122 trillion, 7 per cent higher than its yearly goal.

BCG targets huge profit increase

Bamboo Capital JSC has set a target to achieve VND2.96 trillion (US$126.8 million) in revenue and after-tax profit of VND311 billion ($13.3 million) this year, a year-on-year increase of 166 per cent and 2,656 per cent.

The targets were approved at its annual general meeting of shareholders held in HCM City yesterday (May 10).

Speaking at the meeting, Nguyen Ho Nam, BCG’s chairman, said last year the company did not meet its business targets last year, with its revenue and after-tax profit reaching only VND1.1 trillion and VND11.3 billion, down by 44 per cent and 81 per cent over 2017.

Nam attributed the reduction to business restructuring and the transfer of commercial activities to its subsidiaries and divestment of capital from companies such as Phu Thuan Co., 1-5 Auto Co., ACG Vietnam and Tracodi Service JSC, as well as its large investments in real estate and renewable energy projects last year.

Property projects, including the VND2.2 trillion ($94.2 million) Malibu Hoi An five-star resort project in Quang Nam, and the VND1.5 trillion ($64.25 million) King Crown luxury apartment project in District 2, are expected to start generating good revenue and profit this year, while two solar energy power plants – the 40.6 MW BCG Bang Duong and the 100.4 MW Gaia - will also be a stable revenue source for BCG.

Nguyen Thanh Hung, BCG’s member of the board of directors, said this year BCG would continue to invest in solar and wind power projects in Long An, Dak Lak, Ben Tre and Soc Trang, targeting total power generation capacity of over 400 MW in 2019-20 and 1,000 MW to 2023.

Hung said this year the company would also focus on completing the restructuring of Nguyen Hoang Group, one of its subsidiaries involved in furniture, coffee and micro-fertiliser manufacturing, to enable it to be listed on the stock exchange in 2020.

The meeting approved the planned dividend payment for 2019 at 20 per cent, with 10 per cent in cash and 10 per cent in shares.

BCG shareholders also approved other important proposals, including adjustment of the plan for issuing convertible bonds, and voting for independent members of the board of directors.

Pham Minh Tuan, BCG’s deputy general director, emphasised that it would fulfill its business targets this year because profit margins of solar energy and property projects have been very high.

SAV slash investment cost, toll collection time for bridge project

BUSINESS NEWS 13/5

The State Audit Office of Vietnam (SAV) proposed a reduction of VND193 billion (US$8.2 million) to the investment cost of Bạch Đằng Bridge, a BOT project in northern Quảng Ninh Province, as well as a cut to the project’s toll collection time, which is currently set at 20 years, to 17 years and eight months.

The office pointed out the project's discrepancies and technical shortcomings. The SAV demanded the project’s management to provide additional documents on a number of construction material costs and contractors.

While the bridge has been deemed safe for travel by the State Council for Assessment for the time being and opened to traffic since September last year, the SAV insisted the project’s management and the provincial authorities work together to address the above mentioned issues in a timely manner.

Despite the fact that the project completion time was allowed to be pushed back three times, there are still several categories that remained unfinished by the time the project went under audit, many still lagging behind the original deadlines, said the office.

The provincial transport department was to share part of the blame for failing in its responsibility to monitor and supervise the implementation of the project.

The Bạch Đằng Bridge project, the first cable-stayed bridge designed and engineered by Việt Nam, started construction in January 2015 with a total investment cost estimated at VND7.2 trillion ($308 million). It was initially set to be completed before July 2018.

The bridge helps shorten travel distance from the capital city Hà Nội to the coastal city of Hạ Long, one of Việt Nam’s top tourist destinations and home to the UNESCO Heritage Site Hạ Long Bay, from 180km to 130km. Travel distance between Hạ Long and the port city of Hải Phòng was also reduced to 25km, instead of 75km as before.

Quang Ninh to host conference on public expenditure management

The eighth plenary conference of the Public Expenditure Management Network in Asia (PEMNA) will take place in Ha Long city of the northern province of Quang Ninh from May 22-24, announced the Ministry of Finance (MoF).

This will be the first time that Vietnam has hosted the conference.

This year, the event will focus on the restructuring of state budget and management of public debt to ensure safe and sustainable national finance, which are among Vietnam’s pillars of economic restructuring during its growth model transition and international integration process.

Through the event, the MoF hopes to learn from the experiences of others in bolstering fiscal activities and public debt management towards building its financial strategy for the 2021-2030 period and the finance-budget plan for 2021-2025.

PEMNA is a peer learning network of public financial management practitioners in Asia. Established in 2012 as an initiate of the World Bank and the Republic of Korea (RoK)’s Ministry of Economy and Finance, it aims to support governments across the region to address public financial management challenges and improve the efficiency and effectiveness of public spending through forums and experience sharing between members in the East Asia and Pacific region.

The network currently boasts 14 members, namely Brunei, Cambodia, China, Indonesia, the RoK, Laos, Malaysia, Mongolia, Myanmar, the Philippines, Singapore, Thailand, Timor Leste, and Vietnam.

The PEMNA Steering Committee is composed of representatives from all member countries and development partners, which is also responsible for overseeing the implementation of CoP activities. Its Secretariat is hosted by the Korea Institute of Public Finance (KIPF).

Soc Trang’s investments in tourism infrastructure pay off

The Mekong Delta province of Soc Trang’s investments in tourism infrastructure are paying off with a rising number of domestic and foreign tourists travelling to the province.

Last year, Soc Trang welcomed more than 2 million visitors and earned revenues of nearly 758 billion VND (nearly 33 million USD), up 54.7 percent and 90.8 percent from the figures in 2015.

Tran Minh Ly, Director of the provincial Department of Culture, Sports and Tourism, said the development of the tourism industry has also contributed to economic development by creating more jobs and helping restructure the economy.

Under a programme to develop the tourism industry 2025, Soc Trang will create more tourist attractions such as Quan Am – Linh Ung and Bon Mat (Four-sided) pagodas, Nga Nam Floating Market and the My Phuoc indigo forest.

Speaking at a tourism meeting on May 8, Ly said Soc Trang also plans to develop community tourism, create new inter-provincial tourist attractions and solicit investment in cruise and homestay tourism and other accommodation.

According to reports tabled at the meeting, Soc Trang has great potential in tourism, especially spiritual and religious, ecological and beach-sea tourism.

However, infrastructure could be improved, the hospitality industry fails to fully visitors’ needs and tourist guides’ skills could be better, Ly said.

But the industry requires better advertisement, and the province should take more measures to make itself more attractive to, he added.

HCM City’s retail, services sales up 14.4 percent

The retail sales and service revenue in Ho Chi Minh City reached more than 94.91 trillion VND (4.07 billion USD) in April, up 2.3 percent from the previous month and 14.4 percent from the same time last year, boosted by strong promotional campaigns by shopping malls and supermarkets during national holidays.

Reports from competent authorities showed that revenues went up in the sales of rice (0.6 percent); beef (0.17 percent); confectionary (0.35 percent); and tea, coffee, and cocoa (0.52 percent). Meanwhile, earnings from pork products fell by 3.36 percent, poultry 0.66 percent, seafood 1.79 percent, vegetables 1.91 percent, and fruits 0.06 percent.

According to the municipal Department of Industry and Trade, the sufficient supply coupled with the effective market stabilisation programme have kept food prices steady since the beginning of the year.

The two adjustments in oil and gas prices in April only impacted the transport sector, driving coach and train fares to rise by 0.56 percent and 2.67 percent, respectively.

Deputy General Director of Saigon Co.op Nguyen Anh Duc said that his company has joined hands with suppliers to ensure price stability. The retail chain – which runs Co.opmart, Co.opXtra, and Co.opfood – will focus on essential commodities and continue to run promotional programmes to bolster purchasing power.

Duc affirmed that Saigon Co.op will avoid irrational price hikes to protect consumer rights.

Other retailers in the city said that in the context of weakened spending power, distributors and suppliers should join hands to stabilise the market.

In traditional markets, price increases were seen in fresh and frozen food products following surges in fuel and electricity prices.

A local business association said that they want to receive support from relevant authorities amid market volatility so as to ensure logical production plans can be made.

Ho Chi Minh City is now home to 13 million residents, with expanding demands for food. However, the city is only able to meet 20-30 percent of the total daily consumption, relying heavily on imports and supplies from other cities and provinces.

Meeting seeks to boost financial solutions for businesses

A meeting held in Hanoi on May 10 discussed financial solutions for businesses amid the current context in which roughly 20 percent of firms in need of funding still have problems gaining access to credit.

Capital is one of the most indispensable resources for business development, with credit playing a significant role.

Most businesses have great demand for loans, according to a survey of businesses in the Red River Delta region conducted by the Vietnam Chamber of Commerce and Industry (VCCI).

The VCCI said due to weakness in corporate governance and a lack of transparency in financial activities, many companies, especially small- and medium-sized enterprises (SMEs), have failed to persuade banks and other credit organisations to provide credit for them.

It added that in order to help firms access credit sources, concerted solutions need to be carried out by companies themselves, as well as credit organisations, ministries, and sectors.

MA Nguyen Viet Hung from the Ministry of Finance’s Department of Banking and Financial Institutions pointed out several of the shortcomings in capital support mechanisms and policies for SMEs. Some mechanisms and policies are lagging behind reality, while others are simply not really feasible. Meanwhile, the capacity of financial institutions remains modest.

The finance ministry will continue working to fine-tune policies supporting businesses’ access to credit from state-owned financial institutions. It will also simplify lending procedures, borrowing conditions, and collateral, he noted.

Meanwhile, the State Bank of Vietnam (SBV) will continue the current proactive and flexible monetary policy that is connected with the fiscal policy and other macro-economic policies, thereby helping control inflation and ensure stable interest and exchange rates.

The credit organisation restructuring and non-performing loan settlement will also be promoted so as to foster credit sources for the economy, according to Nguyen Xuan Bac from the SBV’s credit department.

In addition, the central bank will overhaul the legal framework to create more favourable conditions for all economic sectors to access loans, develop new credit products and banking services, and work with local authorities to boost companies’ credit relations with banks, he added.

Lotte E&C picked as main contractor of The Grand Manhattan

Novaland Group has signed a strategic cooperation agreement with Lotte Engineering and Construction Vietnam Co., Ltd, (Lotte E&C), an arm of South Korea's Lotte Group.

Under the deal, Lotte E&C is the main contractor of three high-end apartment projects of Novaland, including The Grand Manhattan.

The Grand Manhattan consists of three 39-storey apartment blocks, which are being built on an area of 14,000 square meters at the intersection of Co Giang and Co Bac streets in District 1.

The ground and first floors of the three residential towers will be used for a shopping mall while a hotel managed by a foreign company will occupy the second to sixth floors. The rest of the buildings will be for condos. Homebuyers are expected to take delivery of their homes in the last quarter of 2021.

Lotte E&C is a professional construction company. It has carried out multiple housing, serviced apartment, shopping mall, office building and traffic infrastructure projects in 21 countries. It has asserted its position through a lot of high-profile projects, such as The Seocho Lotte Caste 84’, Songdo Campus Town, Lotte World Tower and Lotte World Mall.

In Vietnam, Lotte E&C has also developed many infrastructure projects, including the 65-storey Hanoi City Complex in Hanoi. It will soon break ground for some traffic infrastructure projects in HCMC and other southern localities.

Explaining the decision to choose Lotte E&C as the main contractor of Novaland’s three projects, Novaland CEO Bui Xuan Huy said: “We are highly confident that Lotte E&C, with its experience and prestige in the construction sector, will help Novaland develop these high-quality projects and bring convenience to customers. The partnership with Lotte E&C proves Novaland’s commitment to relentlessly improving the quality of its projects.”

Han Yongsoo, executive vice president of Lotte E&C, said: “We highly value Novaland’s prestige in the Vietnamese real estate market given its housing projects in the past. We believe that our cooperation with Novaland will help Lotte E&C further tap into the potential Vietnamese property market. Lotte E&C pledges to ensure the quality of Novaland’s three projects.”

By 2023, Novaland will continue to deploy the second phase of development, further tapping the mid- and high-end property segments which include housing projects, satellite towns and tourism property complexes. A quarter of its land totaling 2,700 hectares will be allotted for housing development and the rest for tourism property development.

In the housing segment, Novaland will continue to get involved in projects in HCMC and neighboring provinces. It expects to launch some 4,500 units including condos, landed homes and villas, and hand over some 5,900 units to buyers this year. 

Meanwhile, in the tourism property segment, Novaland has launched three projects under NovaHills, NovaBeach and NovaWorld brands. In the coming time, the group will introduce some 2,000 tourism property products including resort town houses, resort villas and shophouses. These models are expected to help generate long-term profits.

 
 
 
 
 
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