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Tag: Vietnam

  • VietinBank profits surge 83 pct

    VietinBank profits surge 83 pct

    VietinBank, Vietnam’s third largest bank by asset, has reported an 83 percent increase in pre-tax profits to almost VND11.5 trillion ($495 million) in 2019.

    Its chairman, Le Duc Tho, said at a forum on Tuesday that assets rose 6.5 percent to VND1,240 trillion ($53.29 billion). Its bad debts ratio was under 1.2 percent, down from 1.59 percent in 2018.

    Credit growth during the year was 7.2 percent.

    The bank targets 6-8 percent growth in assets this year, 8-10 percent credit growth and an increase in pre-tax profits of 10 percent. It seeks to keep bad debts under 2 percent.

    Le Minh Hung, Governor of State Bank of Vietnam, said the government has approved capitalizing of VietinBank’s 2017 and 2018 profits.

    The lender has been seeking to increase its charter capital in the last few years, but Tho said profits would only meet a third of the increase it plans and needs government approval to hike its capital through other means.

    Vietinbank, in which the government owns 65 percent, has not increased its capital of VND37.23 trillion ($1.62 billion) since 2014.

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  • Bamboo Airways soars to $13 million profit

    Bamboo Airways soars to $13 million profit

    Bamboo Airways reported pre-tax profit of VND303 billion ($13 million) in 2019 after one year of flying.

    The private airline expects profits to increase by VND1 trillion ($44.4 million) in 2020, three times higher than last year, CEO Dang Tat Thang said. It is expected the carrier will list on the Ho Chi Minh City bourse in the second quarter this year.

    Earlier, Bamboo Airways had planned an initial public offering (IPO) on a Vietnamese stock exchange at VND60,000 ($2.6) per share to raise $100 million. It is now looking to U.S., Japanese and European investors with experience and resources to buy its shares at VND160,000 ($6.9) a pop as part of its 2020 IPO.

    Launched in January 2019, the airline is now operating 34 domestic and international routes. It has conducted nearly 20,000 flights to date, recording almost 3 million passengers.

    The entry of Bamboo Airways earlier this year has eaten into the market share of national flag carrier Vietnam Airlines and budget carrier Vietjet.

    Bamboo Airways hopes to acquire 30 percent of the domestic aviation market next year as it flies 85 routes, 25 of them international. It also plans to operate 100 aircraft by 2025, carrying 50 million passengers annually.

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  • Vietnam Railways struggles to compete with budget carriers

    Vietnam Railways struggles to compete with budget carriers

    The Vietnam Railways Corporation (VNR) has admitted its inability to meet performance targets because of competition from low-cost airlines.

    VNR transported VND8.4 trillion ($362 million) worth of cargo in 2018, up 5 percent year-on-year, but 1.9 percent off the annual target, chairman Vu Anh Minh said at a recent industry conference. Revenue was VND8.19 trillion ($353 million), the same as in 2018, but only 97.2 percent of the target.

    Railway sector employees earned an average of VND9.12 million ($393) a month, Minh said.

    The railway sector continues to face rising competition on freight transport from the road and marine sectors, and its passenger section has to contend with low-cost carriers and highways, Minh said, but did not provide comparative statistics.

    Furthermore, investment in railway infrastructure has been limited because of bottlenecks in policies and investment mechanisms, including land management regulations. The railway sector has only received 40 percent of state capital earmarked for its business and production activities, and among other things, this has undermined railway traffic safety, Minh added.

    Because the railway infrastructure and stations belong to the state, VNR cannot use its own money to conduct repairs, he noted.

    For instance, VNR needed to spend VND30 billion ($1.29 million) to repair and upgrade infrastructure at the Song Luy station in the southern province of Binh Thuan, but it could not do so because of regulatory constraints, Minh said.

    Vietnam currently has over 3,000 kilometers of railway tracks, none of them high-speed.

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  • Muji launching in Vietnam

    Muji launching in Vietnam

    The first Muji Vietnam store is set to open within three months, a year after the Japanese household goods and apparel chain established an office in the country.

    As we reported last February, Muji Vietnam Ltd was registered and headquartered in Ho Chi Minh City.

    According to a source from property company Savills, the new Muji store will open in the city’s commercial center, occupying a 3900sqm space. Muji Vietnam will feature clothing, stationery, homewares, skincare products and other goods.

    The store’s location and exact opening date have yet to be disclosed.

    Besides Muji, other international brands including sports-goods retailer JD, fashion label Champion, cosmetics chain Sephora, food chains Hawker Chan and Din Tai Fung and K-pop merchandise retailer SM Entertainment are also expected to enter Vietnam this year.

  • Half of Vietnamese buyers favor used cars assembled locally

    Half of Vietnamese buyers favor used cars assembled locally

    55 percent of buyers prefer used cars assembled in Vietnam to those imported from South Korea and Japan, a 2019 survey found.

    This figure is several times higher than the 16 percent who favor South Korea and the 11 percent stuck on Japan, according to Cho Tot Xe, a popular car listing website in Vietnam.

    Ho Chi Minh City residents prefer newer, more expensive vehicles compared to those in Hanoi, the website’s data shows.

    HCMC buyers favor used models released in the previous three years at a cost of VND300-700 million ($12,900-30,200). The top three models are Hyundai Grand i10 2016, Mazda CX 5 2017 and Honda City 2016.

    But buyers in Hanoi are more interested in vehicles priced less at VND300-400 million ($12,900-17,200), which date back to 2015, such as the Toyota Vios 2015, Hyundai Grand i10 2015 and Kia Morning 2015.

    The demand for used cars is on the up, listings on Cho Tot Xe rising 22 percent from 2018 to 200,000 last year, with the most popular brands Toyota, Kia and Hyundai.

    Sedans were the most popular used car types in 2019, with Honda City 2016, Toyota Vios 2017 and Mazda 3 2018 the top three.

    Toyota Innova maintained the best used price in 2019 at VND678-740 million ($29,220-31,890), followed by Chevrolet Spark and Ford Ranger.

    Vietnam has been striving to develop its car industry for decades, but experts say the small market size has constrained local producers. The localization rate of passenger cars in Vietnam is at 7-10 percent, compared to 55-60 percent across ASEAN.

    The country imported 133,696 vehicles in the first 11 months last year, up 95.6 percent year-on-year, mostly from Thailand and Indonesia, according to Vietnam Customs.

    289,128 cars were sold throughout Vietnam in the same period, up 14 percent year-on-year, according to Vietnam Automobile Manufacturers Association (VAMA).

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  • Vietnam gold price hits 6-year high

    Vietnam gold price hits 6-year high

    Gold prices in Vietnam soared to a six-year high on Monday amid rising military tension between the U.S. and Iran. The country’s largest jewelry company DOJI sold its SJC gold at VND44.44 million ($1,924) per tael (1.2 ounces) on Monday morning, up 3.78 percent from Friday.

    Another giant Phu Nhuan Jewelry also raised its selling price to VND44.3 million ($1,918), up 4.7 percent.

    It is the first time Vietnam’s gold price passed the VND44.4 million ($1,922) mark in the last six years.

    The surge came as global gold prices increased by up to 1.8 percent to $1,579 per ounce at a point on Monday morning, the highest in seven years.

    The sudden rush for safe-haven assets came after U.S. President Donald Trump ordered a strike that killed Iran’s General Qasem Soleimani, head of the Iranian Revolutionary Guard’s elite Quds Force, on Friday. Iran has vowed to retaliate.

    Gold prices had been surging throughout last year as trade tensions between the U.S. and China persisted.

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  • Japanese bank seeks 9.9 pct stake in Vietnam’s OCB

    Japanese bank seeks 9.9 pct stake in Vietnam’s OCB

    Japan’s Aozora Bank Ltd could acquire 9.91 percent of Vietnam’s Orient Commercial Joint Stock Bank in a VND1.22 trillion ($52.8 million) deal.

    OCB is seeking shareholders’ approval to issue the private placement to the Japanese bank, with an offered price not lower than the book value per share at the end of the latest quarter.

    As OCB’s over-the-counter (OCT) shares are being traded from VND14,100-15,900 each (61-69 cents), Aozora will need to spend at least VND1.22 trillion ($52.8 million) on the deal, at VND14,100 apiece.

    Aozora was established in 1957. It has a total asset value of $48 billion and is listed on the Tokyo Stock Exchange at a market cap of $3.16 billion.

    OCB’s charter capital is currently around VND7.9 trillion ($341.9 million). Its January-September pre-tax profit last year was almost VND1.94 trillion ($83.96 million), up 15.3 percent year-on-year.

    Last year saw several foreign investors acquiring stakes or expressing interest in owning shares of Vietnamese banks.

    Vietnam’s largest bank by asset, BIDV, sold a 15 percent stake to South Korea’s KEB Hana Bank in November, while Vietcombank had in early 2019 sold a 3 percent stake to Japanese and Singaporean investors.

  • Vietnamese automaker ships buses to Philippines

    Vietnamese automaker ships buses to Philippines

    Vietnam’s leading automaker and assembler Thaco shipped the first 15 buses to the Philippines on Saturday.

    Tran Ba Duong, chairman of Truong Hai Auto (Thaco), said the exported buses were redesigned after seven months of testing in the Philippines. They had a localization rate of 45 percent and complied with Euro 5 emission standards.

    All the buses were assembled in the Chu Lai open economic zone in Quang Nam Province, central Vietnam.

    Duong said a major challenge in exporting vehicles made or assembled in Vietnam was the complicated assessment process in foreign countries. For example, the process takes six months in Thailand, four to five months in the Philippines and a year in the U.S.

    Thaco expected to ship 200 buses to the Philippines in 2020.

    The firm exported 186 automobiles of various types to ASEAN countries and plans to export over 1,020 units next year. Thaco also exported auto parts and accessories worth $14.5 million to South Korea and Japan in 2019, and this is expected to rise to $21 million in 2020.

    Thaco has been researching, manufacturing and assembling buses and continuously promoting investment in the field since 2004. To date, the company has supplied over 17,000 buses to the domestic market, holding a 65 percent market share.

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  • Number of new businesses, registered capital highest ever

    Number of new businesses, registered capital highest ever

    138,100 businesses were established in Vietnam this year, the highest ever, with the government’s initiative to increase the quantity and quality of enterprises bearing fruit.

    In terms of volume, the figure was up 5.2 percent year-on-year, while their registered capital also climbed a new high at over VND1,730 trillion ($75.1 billion), up 17.1 percent year-on-year, according to the General Statistics Office.

    This meant the average registered capital was VND12.5 billion ($542,000) per business.

    An additional 39,400 businesses resumed operations this year, up 15.9 percent from last year. But the year also saw 43,700 businesses filing for dissolution, up 41.7 percent year-on-year.

    The surge in the business numbers and registered capital is happening as the government seeks to improve its administrative policies to support enterprises as part of a plan to have the private sector spearhead economic growth.

    Prime Minister Nguyen Xuan Phuc said at a meeting with business leaders on December 23 that the large number of businesses dissolving each year, including big ones, was a matter of concern.

    Government agencies have been making proposals in this regard. In July, the Ministry of Finance proposed to the National Assembly that it considers scrapping corporate income tax on micro and small enterprises.

    There are about 760,000 businesses operating in the country. Vietnam targets taking this up to 1 million next year.

    Vietnam’s GDP growth of 7.02 percent in 2019 exceeded the parliament’s target of 6.6-6.8 percent as well as forecasts by several international organizations like the WB and the ADB. It had slowed from a record 7.08 percent in 2018, but remained the second highest growth figure in the last decade.

  • Vietnam air travel demand surges 12 pct

    Vietnam air travel demand surges 12 pct

    Airports across Vietnam served near 116 million passengers this year, up 12 percent from 2018, with Vietnam Airlines Group and Vietjet dominating the market.

    About 64 percent, or 74 million passengers, were domestic, up 11 percent from last year, according to Airports Corporation of Vietnam (ACV).

    The remaining 41.7 million foreign travelers grew by 13.6 percent from last year, with Noi Bai International Airport, Da Nang International Airport and central Cam Ranh International Airport near Nha Trang experiencing the highest traffic growth.

    Vietnam Airlines Group accounted for over 50 percent of the market share. It comprises national flag carrier Vietnam Airlines, low-cost arm Jetstar Pacific and Vietnam Air Services Company (VASCO).

    Budget carrier Vietjet accounted for 41.9 percent of the market.

    ACV Chairman Lai Xuan Thanh said overload will be a challenge next year as red tape in aviation infrastructure and investment constrains upgrade and expansion projects, like at Tan Son Nhat International Airport, which handles 30 percent of the country’s air passengers.

    Another concern is slower growth in foreign passenger numbers, which dropped from over 20 percent in 2016-2018 to 13.6 percent, he added.

    ACV forecasts the number of air passengers would rise by 10 percent to 127 million next year.

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  • Vietnam Airlines reports record profit in 2019

    Vietnam Airlines reports record profit in 2019

    National flag carrier Vietnam Airlines estimates its consolidated pre-tax profit for 2019 at an all-time high of VND3.37 trillion ($146 million).

    The figure also marks a 10 percent year-on-year increase, Vietnam Airlines said in a press release.

    Its consolidated revenue is estimated at VND101.18 trillion ($4.39 billion) this year, up 2.2 percent year-on-year.

    In 2019, Vietnam Airlines transported 23 million passengers and nearly 346,000 tons of cargo on 134,000 flights. The airline also began operating 22 new aircraft and 10 flight routes, bringing its fleet to above 100 aircraft.

    In 2020, it will focus on retaining its core customer segments and holding share in key markets, the airline said. It expects to invest in 50 additional narrow body aircraft between 2021 and 2015, as well as improving services and digitization of its systems.

    Vietnam Airlines is 86.16 percent state-owned, and Japanese air transportation company ANA Holdings has an 8.77 percent stake. The remaining shares are held by state-owned lender Vietcombank, private lender Techcombank, and other domestic individuals.

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  • Vingroup airline expects profits in 3 years

    Vingroup airline expects profits in 3 years

    Vingroup’s Vinpearl Air, a $200 million venture, is seeking to launch its first flight in July with expectations of turning profitable by 2023.

    The new airline could also recover its investment in 5-6 years, according to an evaluation report recently submitted to the Prime Minister by the Ministry of Planning and Investment.

    The airline will have a total investment of VND4.7 trillion ($202.7 million), of which conglomerate Vingroup will contribute VND1.3 trillion ($56 million), or 28 percent. The remaining will be sourced from loans and other sources.

    Vinpearl Air is set to create 500-600 direct jobs when launched and 2,200-2,300 jobs by 2023-2024.

    It will pay a corporate income tax of VND1 trillion ($43.1 million) a year in the first five years of operation.

    Vinpearl Air plans to start off with six aircraft and increase the fleet to 30 by 2024.

    It wants to be based at the Noi Bai International Airport and park its aircraft in Hanoi as well as in other airports in Quang Ninh Province and Hai Phong City in the north, and Da Nang City and Khanh Hoa Province in the central region.

    The Ministry of Planning and Investment has said it supports the establishment of the airline, but asked the airline to provide more detailed financial calculations.

    Apart from Vinpearl Air, Vietravel Airlines and KiteAir are two other airlines seeking permission to fly this year.

    The country now has five commercial airlines: national flag carrier Vietnam Airlines, Jetstar Pacific, Vietjet Air, Bamboo Airways and Vietnam Air Services Company (VASCO).

    Airports across Vietnam served near 116 million passengers in 2019, up 12 percent from 2018, according to Airports Corporation of Vietnam (ACV).

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  • Vietnam to buy 1.5 billion kWh of power annually from Laos

    Vietnam to buy 1.5 billion kWh of power annually from Laos

    State power utility EVN will buy around 1.5 billion kWh of electricity a year from Laos for two years starting in 2021.

    Under contracts it signed on Saturday, Vietnam Electricity (EVN) will buy over 596 million kWh a year from two hydropower plants belonging to Phongsubthavy Group and 632 million kWh from two plants belonging to Chealun Sekong Group from 2022.

    From 2021 it will start buying 263 million kWh annually from another plant belonging to the latter company.

    The import was approved by the Vietnamese government to mitigate power shortages predicted to hit the country from this year.

    The Ministry of Industry and Trade estimates shortages of 3.7 billion kWh in 2021 and nearly 10 billion kWh the following year.

    2023 will be the most stressful with the shortage expected to be around 15 billion kWh. From then on it will decrease, with the shortage expected to come down to 7 billion kWh and 3.5 billion kWh in 2024 and 2025 respectively.

    The industry ministry has said not more than 5-8 percent of electricity can be conserved, and the only way out is to import more from Laos and China.

    But buying from neighboring countries is only a band-aid solution, and in the long run it is necessary to speed up work on large power generation projects, it stated.

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  • Vietnam sees car imports double

    Vietnam sees car imports double

    Dwindling sales of locally assembled cars and rising sales of imports are causing local manufacturers to demand more tax incentives to compete.

    In the first 11 months of the year sales of locally made vehicles fell by 13 percent year-on-year to 169,739 units, while that of imported cars doubled to 119,389, according to the Vietnam Automobile Manufacturers Association (VAMA).

    The surge in sales of imports follows a slump in 2018 due to a decree that stipulated tougher conditions for car importers, requiring them to provide certain certificates to ensure quality and countries of origin.

    The number of imported units fell by 20 percent last year, but rose 96 percent year-on-year this year to 133,700 units.

    They cost almost $3 billion, and the Ministry of Industry and Trade has estimated this figure could hit a record $3.4 billion for the full year, almost double last year’s.

    Though locally assembled vehicles still dominate sales, the surge in imports of complete-built units concern manufacturers. Pham Van Tai, CEO of Truong Hai Auto (THACO), had suggested last month that the country should scrap imports tax on car parts that cannot be made locally.

    Vietnam has been struggling to grow its auto industry for decades. Last year 288,700 units were sold, compared to Thailand’s million-odd units and Indonesia’s 1.1 million, according to auto database Marklines.

    The country’s local parts rate for passenger cars is 7-10 percent compared to 80 percent in Thailand and 70 percent in Indonesia.

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  • Vietjet Receives New 240-Seat A321neo ACF Aircraft

    Vietjet Receives New 240-Seat A321neo ACF Aircraft

    Vietjet has received two new Airbus A321 aircraft, registered as VN-A521 and VN-A542, on 31 December 2019 at Tan Son Nhat International Airport. The total number of aircraft in Vietjet’s fleet is now 80, and the VN-A521 aircraft is the third 240-seat A321neo ACF (Airbus Cabin Flex) aircraft in the world, with the two first of its type already being operated by Vietjet. With the arrival of the new aircrafts in the end of 2019, the new-age carrier is ready to meet the high travel demands during the festive period of Lunar New Year, as well as its fleet expansion plans in 2020.

    The new aircraft features leather seats and premium interiors. In particular, Vietjet’s third A321neo ACF aircraft has an innovative cabin structure to increase the total number of seats to 240. It also features the advantages of most modern Airbus aircrafts, including comfortable seat zones, fuel consumption savings of a minimum of 16 per cent, noise reduction of up to 75 per cent and emissions reduction of up to 50 per cent.

    Vietjet currently owns one of the world’s newest and most modern fleets with an average age of only 2.7 years. Vietjet has currently transported nearly 100 million passengers, with 130 routes covering destinations in Vietnam and international routes to Singapore, India, Japan, Hong Kong, South Korea, Taiwan, Thailand, Myanmar, Malaysia, China, Indonesia and Cambodia.