The shares of many large corporations on October 31 continued to see sharp price decreases after Vietnam’s businesses reported unsatisfactory business results.

MWG shares of The Gioi Di Dong (Mobile World) slid to the floor level of VND37,700 per share (-VND2,800). Foreign investors had a net sale of VND2 million shares at this trading session. 

The fall of MWG shares in late October was another big surprise. Prior to that, the share prices of the big retailer decreased by 30 percent after 1.5 months, from VND58,000 in mid-September to VND40,000.

MWG share prices dropped dramatically after the hi-tech device retailer released its financial report which showed the very low level of profits in the third quarter (just VND39 billion), decreasing by 96 percent compared with the same period last year, while MWG has tried to lower selling prices to improve weak revenue.

The retailer has reported net revenue decrease of 16 percent in the first nine months compared with the same period last year to VND87 trillion and net profit decrease of 97 percent to VND77 billion.

Businesses have been facing difficulties in the last year as consumer demand is weak. Non-essential goods such as mobile phones and household appliances are not selling well.

On the same day, SAB shares of Sabeco, the largest brewer in Vietnam, lost VND4,100 to VND56,700 per share. Like MWG, SAB continued to see a sharp fall though it lost 30 percent of value 1.5 months before.

As demand is weak, the big player in the beverage sector is in very difficult period. The sales have dropped sharply, while input materials have become more expensive. As a result, its revenue decreased by 14 percent in the third quarter and post-tax profit decreased by 22 percent to VND1.044 trillion. The accumulated revenue in the first nine months decreased by 12 percent, and profit by 24 percent to VND3.17 trillion.

A year of challenges

Not only consumer goods manufacturers, but realtors and building material producers have suffered from the quiet real estate market. Apartment project developers are burdened with heavy debts, while sales are weak.

In agriculture, to investors’ surprise, Loc Troi Group, has reported a loss of VND330 billion in the third quarter, though the rice producer was expected to prosper thanks to the increase in rice prices in the world market and export bans imposed by other big rice exporters.

Loc Troi’s loss is attributed to the increase in capital costs and dong/dollar exchange rate fluctuations.

In the seafood sector, Minh Phu Seafood also reported a loss of VND11.9 billion in the third quarter, while it made a profit of hundreds of billions of dong in the third quarter 2022. As such, Minh Phu had incurred a loss of VND114 billion after the first nine months, which was a contrast to the profit of VND574 billion the same period last year.

Meanwhile, Nam Viet Seafood (ANV) reported a 99 percent decrease in profit for the third quarter to VND1 billion, a one-decade low.

As for Gilimex, the suitcase and bag producer, saw quarterly revenue dropping from more than VND1 trillion to hundreds of billions of dong after the company sued the e-commerce giant Amazon. In 2022, Amazon cut orders because of big inventories and the weak demand of the US market.

The brightest spots of the panorama of Vietnam’s economy is the FDI increase. The registered FDI capital in October reached a record high of $5.5 billion in 2020-2023, and 90 percent came from newly registered projects.

Analysts note that this is a good sign for a new development cycle, following the upgrading of the Vietnam-US relations to comprehensive strategic partnership. Vietnam continues receiving investments from multinationals and it can cement its position in the global supply chain.

The newly registered capital last October came from the countries in the electronics-semiconductor production chain, including China, Taiwan (China), South Korea and Singapore, and the projects are developed by big players such as LG and Jinko Solar.

Luong Bang