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Tag: Vietnam

  • The Coffee House operator posts $10 mln loss

    The Coffee House operator posts $10 mln loss

    Seedcom, the operator of The Coffee House beverage chain and June fashion outlets, posted a loss of nearly VND240 billion ($10.45 million) last year due to Covid-19 impacts. The loss increased by nearly 24 percent from 2020.

    Its debt-to-equity ratio rose by 26 to 69.5. It had nearly VND1.48 trillion in debt by the end of the year.

    Last year, it raised VND50 billion in bonds with a coupon rate of 12 percent per annum.

    The negative figures came as most of Seedcom’s business, including The Coffee House, Juno and another fashion brand Hnoss, had to shut down or operated with limited capacity for months due to social distancing.

    The Coffee House last year launched a kiosk model to focus on selling takeaways in crowded areas like supermarkets or main roads.

    But so far only two such kiosks have been opened in Ho Chi Minh City, despite CEO Le Ba Nam Anh’s plans to open a large number of such facilities.

    Seedcom, established in 2014, also owns delivery companies AhaMove, Giao Hang Nhanh and retail chain Kingfoodmart.

    Last year it branched into finance by partnering with Thai bank Kvision to provide payment and loan services to small and medium companies, focusing on cashless finance.

    It also sold farming unit Cau Dat Farm, which grows and processes coffee, to Nova Consumer under NovaGroup to focus more on retail.

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  • Gold giant SJC sees sales slump to seven-year low

    Gold giant SJC sees sales slump to seven-year low

    The State-owned Saigon Jewelry Company has reported revenues of VND17.7 trillion ($770.3) in 2021, down 25 percent year-on-year to its lowest since 2014.

    It has attributed the decrease to Covid-19 restrictions and lockdowns last year, which brought sales from VND13 trillion in the first half down to just VND4.7 trillion in the third and fourth quarter, well below its target of VND23.5 trillion.

    The company posted pre-tax profits of VND56 billion last year, down 42.6 percent, and return on equity of 2.8 percent, short of the targeted 5 percent.

    At the end of 2021, the value of its total assets was VND1.7 trillion, 70 percent of it in inventory.

    Established in 1988, SJC is a wholly state-owned enterprise based in Ho Chi Minh City. It has been the sole producer of gold bullion in the country since 2012, and has around 90 percent of the bullion market.

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  • Vietnam plans two-thirds cut in thermal power

    Vietnam plans two-thirds cut in thermal power

    Vietnam will reduce coal-fired power supply by two-thirds between 2025 and 2045 and increase renewable power supply to account for more than half of the total.

    All localities have expressed agreement with the Ministry of Industry and Trade’s latest version – Power Power Development Plan 8 – which was announced earlier this month. The ministry is required to complete its final draft of the plan and submit it to the government by the end of this month, Deputy Prime Minister Le Van Thanh has said.

    The plan includes targets to bring down the ratio of coal-fired power supply from 29.3 percent in 2025 to 9.6 percent in 2045, when the country is set to have a total supply of 401,556 megawatts from all sources.

    This means coal-fired projects under construction will still be completed, but no new plant will be approved. Hydropower will also see its ratio reduced from 27.2 percent in 2025 to 9 percent in 2045. Renewable energy, comprising mostly of wind and solar power, will see its ratio increase from 23.7 percent in 2025 to 59.5 percent by 2045.

    Offshore projects are set to account for zero percent of supply by 2025 but will rise to 17 percent by 2045.

    Solar power farms will see its ratio more than double from 8.9 percent to 19.4 percent.

    The industry ministry also eyes a gradual transition from liquefied natural gas (LNG) projects to hydrogen power over 20 years. By the 10th year of their operation, the government wants LNG plants to have 20 percent of their capacity coming from hydrogen power.

    The latest development plan aims to maximize the reduction of coal-fired power sources in order to meet the country’s commitment to achieve carbon neutrality by 2050, the industry ministry told the government in its report.

    Carbon emissions are set to hit 175 million tonnes by 2045 and fall to 42 million tonnes by 2050.

    The plan will also increase power independence and reduce the need for energy imports, the ministry said.

    Power imports are set to see their ratio decrease from 4.5 percent of total supply in 2025 to 2.8 percent in 2045.

    The industry ministry estimates an investment of $141.6 billion to implement this plant, with transmission accounting for nearly 10 percent.

    It wants to increase power transmission from the central and southern regions to the northern region starting 2030.

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  • TPBank eyes 36-percent hike in profits

    TPBank eyes 36-percent hike in profits

    Private lender TPBank expects its pre-tax profits to top VND8.2 trillion ($358 million) this year, up 36 percent from 2021.

    It also targets a 20 percent increase in assets to VND350 trillion.

    The bank plans a rights issue of 527 million shares this year to raise VND5.3 trillion and increase its charter capital to VND21 trillion.

    VnDirect Securities has forecast 25 percent growth for TPBank this year, higher than the 20 percent expected for the sector.

    BaoViet Securities has forecast its compounded annual growth rate to top 31.4 percent in 2020-22 and return on average equity (ROAE) in the period of 24.8 percent.

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  • Stocks plunge to 11-week low

    Stocks plunge to 11-week low

    Vietnam’s benchmark VN-Index started off the week in the red with a 1.25 percent drop to 1,440.23 points Monday morning, the lowest in 11 weeks.

    The index fell by 17 points as of 11:06 a.m. after ending in the red in four out of the last six sessions.

    The main bourse Ho Chi Minh Stock Exchange (HoSE) saw 361 tickers in the red and 107 in the green.

    Brokerages have forecast earlier that the market would drop in the short term.

    The VN30 basket, comprising the 30 largest capped stocks, saw 15 tickers in the red, with SSI of leading brokerage SSI Securities Corporation falling 4.5 percent to the lowest since August last year.

    VHM of real estate giant Vinhomes dropped 3.4 percent, the lowest in over a year.

    Other losers included CTG of state-owned lender VietinBank, down 3.5 percent, MBB of lender MB, down 2.7 percent, and VIC of biggest private conglomerate Vingroup, down 2.9 percent. Fourteen blue chips bucked the trend, with PNJ of Phu Nhuan Jewelry rising 3.2 percent and FPT of IT giant FPT Corporation gaining 2.2 percent. Both were at new peaks.

    They were followed by SAB of brewer Sabeco, up 2 percent, and TPB of private TPBank, up 1.6 percent.

    Foreign investors are buying the dips with a VND88 billion net purchase, focusing on DPM of Petrovietnam Fertilizer & Chemicals Corporation and NLG of real estate developer Nam Long Investment Corp.

    The HNX-Index for stocks on the Hanoi Stock Exchange, home to mid and small caps, was losing 2.51 percent, while the UPCoM-Index for the Unlisted Public Companies Market was losing 1.5 percent.

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  • Auto sales recommence growth

    Auto sales recommence growth

    Vietnam’s auto sales in March returned to growth with a 17 percent increase year-on-year to 36,962 units after two consecutive months of decline, according to Vietnam Automobile Manufacturers Association (VAMA).

    The figure was highest this year and brought sales in the first quarter to 90,506 units, up 27 percent year-on-year, said VAMA, which does not incorporate data of VinFast and TC Motor (assembler of Hyundai cars).

    Most top-selling brands posted a double-digit increase in sales compared to March last year.

    Truong Hai Auto Corporation (Thaco) led with 13,295 units sold, up nearly 33 percent year-on-year.

    Toyota sold 7,977 units, up 22 percent.

    Mitsubishi and Honda followed with 3,675 units and 3,604 units respectively.

    Visuco (Suzuki) saw sales declining by 0.8 percent, while Ford’s sales plunged 45 percent.

    With data from all brands included, the hatchback VinFast Fadil was the top-selling model in Vietnam last month at 2,567 units. It was followed by the SUV Toyota Corolla Cross and the sedan Toyota Vios.

     

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  • Vietnam Aviation under pressure

    Vietnam Aviation under pressure

    The Civil Aviation Authority of Vietnam has recommended a 3.7-percent increase in domestic fare caps to enable airlines to cope with surging fuel prices.

    In a proposal it submitted to the Ministry of Transportation, it said fuel costs have risen by 84 percent since September 2015, when the current caps were introduceThe price of aviation fuel Jet A1 has doubled in the period from US$61.6 per barrel to $132.6, according to data from the International Air Transport Association.

    CAAV has proposed hikes ranging between 2.2 percent for routes of up to 850 kilometers and 6.6 percent for those above 1,280 km. Currently, these fares are capped at VND2.2 million ($96.1) and VND3.75 million ($163.8).

    In 2019, Vietnam Airlines had called for abolishing the domestic price caps altogether.

    Last month it called for raising the caps and fuel surcharges. Vietnam is one of the few countries in the world to still cap airfares.

  • Aviation yet to gain takeoff momentum

    Aviation yet to gain takeoff momentum

    On Mar. 15, Vietnam fully reopened its borders to foreign tourists, allowing quarantine-free entry and reinstated its pre-pandemic visa policies, including waivers for nationals of 24 countries.

    “These positive moves have contributed to strengthening confidence in a brighter picture for the aviation industry this year,” Nguyen Huu Nam, deputy director of the HCMC chapter of the Vietnam Chamber of Commerce and Industry (VCCI), said at an event held last week to present the Vietnam International Aviation Exhibition (VIAE 2022) set to take place in September.

    Regarding this year’s prospects, brokerage Bao Viet Securities (BVSC) has said in recent report that if new coronavirus variants are not too dangerous, international routes can recover strongly from the end of the second quarter onwards.

    It has forecast the number of domestic and international passengers in 2022 at 30 million and five million, up 89.9 percent and 4.6 percent respectively over last year.

    Meanwhile, Viet Capital Securities JSC (VCSC) estimates the number of domestic flights has reached 94 percent of the pre-pandemic period (2019).

    The company expects that the total number of domestic passengers for Vietnam Airlines and Vietjet Air this year will be 92 percent and 91 percent of 2019, respectively; and that of international passengers will be 44 percent.

    Nguyen Phuoc Thang, Head of Science – Technology and Environment Department of Civil Aviation Authority of Vietnam, said from now until the end of August, carriers will increase the number of flights to serve tourists and the market will recover “very quickly.”

    The industry is coming out of two quiet years, resuming international commercial flights about a month ago.

    As for international flights, Vietnam officially resumed services on nine routes on Jan. 1 before reopening flights to all markets starting mid-February with several Covid related restrictions.

    According to the General Statistics Office, 91,000 foreigners arrived in Vietnam in the first quarter, up 89.1 percent against the same period last year. Of these, 90.5 percent came on flights, up 165.2 percent.

    In 2021, the number of passengers dropped to the lowest ever level in history, to 15.9 million, with that of foreign and domestic passengers dropping by 96.5 percent and 50.5 percent against 2020, respectively.

    As the fourth Covid-19 wave hit the country in April last year, domestic flights were put on hold late August and only a limited number of flights resumed early October.

    Between Oct. 10-20, only one return flight was allowed on 19 domestic routes compared to 58 routes in 2019. and it was not until after that pilot period that domestic flights resumed gradually.

    The demand for flying in Vietnam entered the “new normal” phase during the latest Tet, or Lunar New Year holiday, which last nine days starting Jan. 29.

    According to the Vietnam Air Traffic Management Corporation (VATM), Vietnamese carriers operated 10,711 flights on domestic routes between Jan. 29 and Feb. 2, an increase by more than 69 percent against the previous Tet holiday.

    However, the aviation industry has several obstacles to contend with before it gains a strong recovery momentum. One major obstacle is access to its major feeder markets before the pandemic, namely, China, South Korea, Japan and Russia.

    For now, China is still pursuing a “zero Covid” policy and South Korea still maintains tight border control. The ongoing Russia-Ukraine crisis will also prevent Russian tourists from going on tours abroad.

    The VCSC has suggested that Vietnam diversify its markets while waiting for the traditional ones to recover.

    According to Destination Insights with Google, the U.S. and Europe are among markets with the highest search demand for information on accommodation and air travel to Vietnam since the reopening was announced.

    The other obstacle airlines could face in the near future is fuel prices, which accounted for 29 percent and 43 percent of the input costs for Vietnam Airlines and Vietjet Air in the 2015-2019 period.

    In January, the average price of jet fuel rose to about $101 per barrel, higher than the $77.8 forecast by the International Air Transpo

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  • Ford dealer reports 36-fold profit increase

    Ford dealer reports 36-fold profit increase

    City Auto Corp, Vietnam’s largest Ford dealer, reported profits of VND51.8 billion (US$2.27 million) last year, a 36-fold rise from 2020.

    But it sold only 4,580 vehicles, 29 percent fewer than in 2020, and the increased profitability was due to the average price of each rising by 13 percent to VND915 million.

    The company attributed the decline in number of cars sold to last year’s Covid-19 outbreak and social distancing, but said business bounced back in the last quarter of 2021 thanks to post-pandemic economic recovery and the registration fee cut.

    It hopes to sell 8,820 units this year and double profits to VND104 billion, its highest ever.

    Opening new Ford dealerships and also distributing other car brands are part of its strategies to achieve the goals, it said.

    It did not exclude the possibility of acquiring other dealerships and selling electric vehicles.

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  • Pizza 4Ps loss doubles to $1.66 million

    Pizza 4Ps loss doubles to $1.66 million

    Pizza 4Ps racked up a net loss of VND38 billion ($1.66 million) last year, as it struggled to recover from Covid-19 hits.

    The chain, produces pizzas, cheese and other dairy products, had posted its first ever loss of VND20.8 billion in 2020.

    Before the pandemic hit, the chain earned profits of over VND50 billion in 2018 and 2019.

    Pizza 4Ps charter capital has also fallen to 28 percent to VND98 billion, driving its debt-to-capital ratio up from 0.66 to 1.99.

    It issued bonds worth VND21 billion last year to build new outlets and a cheese factory.

    Founded in 2011 by a Japanese couple, Pizza 4Ps has 25 outlets in HCMC, Hanoi, Da Nang, Hai Phong and Nha Trang.

  • Hanoi housing prices keep rising on low supply

    Hanoi housing prices keep rising on low supply

    Housing prices in Hanoi rose the most in five years, driven up by limited supply and the specter of inflation. According to leading properconsultancy CBRE, the average price of a new apartment increased by 13 percent to US$1,655 per square meter. In the secondary market, it was up 9 percent at $1,278.

    In Vietnam, housing has historically been a safe haven investment during times of high inflation.

    In the quarter ending in March, the new housing supply was 3,500 units, down 39 percent quarter-on-quarter and 20 percent from the same period last year.<

    The decline was caused by a new wave of Covid-19.

    Most of the new supply came from ongoing phases at six projects. Only two came into the market for the first time.

    Mid-priced apartments accounted for 66 percent of the new supply. Demand was higher than new supply, with 4,200 units being sold during the quarter.

    CBRE forecast a supply of 26,000-28,000 units this year, but said the affordable segment would continue to face a scarcity.

    While over 90 percent of the new supply would be sold thanks to the bullish market sentiments, the trajectory could change at the end of this year, depending on the economic situation.

    Prices are expected to keep rising in the first half of 2022 but speculative trading would come down due to a crackdown by authorities, it added.

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  • Vietnam rises as new luxury hub

    Vietnam rises as new luxury hub

    Luxury brands are expanding their presence in Vietnam as they seek to profit from the country’s growing middle class and robust economic growth.

    Italian luxury car brand Lamborghini announced its return this month after a year of inactivity, and has named a new distributor, S&S Automotive.

    The distributor, which is also a dealer for other luxury car brands like Rolls-Royce and McLaren, said a new Lamborghini showroom is being built in HCMC’s District 1 and would open this quarter.

    The Porsche Center Saigon opened last year in HCMC’s District 7, and the German company called it a “key milestone in one of its fastest growing markets in the Asia Pacific.”

    The company also launched Southeast Asia’s second Porsche Studio in Hanoi last year, with the CEO of Porsche Asia Pacific Arthur Willmann saying the capital’s vibrant young population was the inspiration for the store.

    He echoed an earlier statement by Paul Harris, director of Roll-Royce Asia Pacific, who said Vietnam has the youngest demographic of his company’s markets.

    Prestige fashion brands have also been active, with Italy’s Bvlgari returning in February last year and opening a store in HCMC, and Louis Vuitton and Christian Dior launching flagship stores in 2020 in Hanoi’s central district of Hoan Kiem.

    The country’s luxury goods market is set to surge by 35.7 percent from last year to $912 million this year, according to data from German portal Statista, making a strong recovery after two years of Covid-19.

    In the next five years, it is set to expand by 3.3 percent annually and will cross the $1 billion mark by 2025.

    The biggest luxury segments would be fashion, leather goods and cosmetics and fragrances, Statista forecast.

    Matthew Powell, director of real estate consultancy Savills Vietnam, which found the Hanoi locations for Louis Vuitton and Dior, said many luxury brands want to enter or expand their presence in Vietnam since its retail market is one of the most vibrant in the region and rentals are low compared to other Asian cities such as Singapore and Hong Kong.

    The country’s rising per capita income and expansion of the middle class are also factors, he added.

    Vietnam has long been hailed as a country with a fast-expanding middle-class thanks to strong economic growth.

    With a 56 million-strong middle class by 2030, Vietnam is set to leap eight places from its current 26th in the global ranking of 30 economies with the largest middle-class populations, British analytical NGO and data enterprise World Data Lab said.

    The number of people in the country owning more than $30 million, or the ultra-rich, could reach 1,551 in 2026, a 26 percent increase from 2021, according to a report by U.K. property consultancy Knight Frank.

    The company also predicts that the number of rich people, or those with a net worth of $1 million or more, including their primary residence, will soar by 59 percent from last year to 114,807 in 2026.

    “We have witnessed prime apartment selling prices break the $10,000 per square meter barrier this year, driven by local demand, and with Vietnam expected to increase the number of ultra-high net worth individuals between 2021 and 2026 by 26 percent, on par with Hong Kong and Taiwan, we can see the potential for ongoing growth well into the future beyond that,” Knight Frank Vietnam managing director Alex Crane said.

    The company also pointed out that rich Vietnamese are buying more watches, cars and wines.

    The country’s import of watches increased by 28.2 percent annually in 2016-20.

    Car sales and wine imports, prior to being impacted by the pandemic, had maintained consistent growth of 12.9 percent and 9.8 percent between 2016 and 2019.

    The growth potential for luxury brands remains bright as the country is expected to achieve the highest growth rates in Southeast Asia of 6.5 percent this year, and 6.7 percent next year.

    Distributors of luxury brands in Vietnam seem to be doing well.

    Duy Anh Fashion and Cosmetics recorded year-on-year growth of 171 percent in the last quarter of last year.

    It brought two new fashion brands to Vietnam last year, Tiffany & Co and Montblanc, and opened their first stores in Hanoi and HCMC respectively.

    It also brought footwear and accessories brand Christian Louboutin to HCMC in January with the first store opening in District 1.

    Tran Thi Hoai Anh, founder and president of GlobalLink, which distributes luxury fashion brands in Vietnam, told The Business of Fashion in 2019 that the appetite for luxury goods is more pronounced than ever in Hanoi and HCMC.

    “Only a decade ago it was all about knowing the difference between Gucci and Prada. [But] today’s new generation of wealthy shoppers are driven by the quest for quality, distinctiveness and craftsmanship.”

    Anh said Vietnamese consumers seem to be shopping more after the Covid-19 restrictions of the last two years.

    To take advantage of this, her company plans to open a new 700-square-meter flagship store in HCMC and sell brands that have not been popular in Vietnam such as Off-White, Ambush and Amiri, she said.

    “I am very positive about the future, as I am seeing demand for luxury goods after the pandemic.”

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  • World Bank lowers Vietnam growth forecast to 5.3 pct

    World Bank lowers Vietnam growth forecast to 5.3 pct

    The World Bank has cut its growth forecast for Vietnam this year to 5.3 percent, due to surging Covid-19 infection in Q1 and economic slowdown in its major export markets.

    This has been the second time the bank lowers its 2022 projection for the country. Last October it had expected a growth rate of 6.5 percent, lowered to 5.5 percent in January.

    Vietnam’s GDP is expected to grow by 5.3 percent this year and stabilize at around 6.5 percent in a scenario with eased mobility restrictions domestically and internationally, it added to a report released Tuesday.

    It forecasts the service sector to gradually recover during the year as consumer confidence is restored and tourism resumes from mid-2022 onward.

    But manufacturing will grow at a slower pace mirroring moderating growth in Vietnam’s main export markets of the U.S., the European Union and China.

    But it warned of the outlook of heightened risks from external economic shock, including the Russia-Ukraine conflict and new Covid-19 variants, slowing recovery of domestic demand, and labor shortage due to a surge in infections.

    “Additional shocks could lead to a low case scenario where GDP grows 4 percent in 2022, recovering to 6 percent and 6.5 percent in 2023 and 2024, respectively”.

    The World Bank recommended the Vietnamese government to deploy a strong fiscal policy support, and accommodative and prudent monetary policy.

    It was also cautious about economic and human capital consequences of inequality, which was driven up by the pandemic and lockdowns between last May and September.

    Vietnam’s economy grew by 2.6 percent last year, well below its pre-pandemic trend of 7 percent.

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  • Seafood exports rise by 40 pct in Q1

    Seafood exports rise by 40 pct in Q1

    Vietnam’s seafood exports grew by 40 percent year-on-year in Q1 to US$2.4 billion despite direct impacts of the ongoing Russia-Ukraine crisis.

    The growth was led by shark catfish, whose exports increased by 88 percent to $646 million and accounted for 27 percent of overall exports, according to the Vietnam Association of Seafood Exporters and Producers (VASEP).

    Shrimp remained the top export item, accounting for 37.5 percent of the total at over $900 million, up 37 percent.

    VASEP said the conflict is having an impact on the industry, with the skyrocketing gasoline prices forcing fishermen not to go out to sea or even sell their boats.

    In March export growth slowed down to 25 percent from 44 percent in January and 62 percent in February.

    Tuna and octopus exports grew by 20 percent last month, but exports of other saltwater fishes slipped by 14 percent.

    Exports to Russia fell by 86 percent to $2.7 million, and exports to Ukraine came to a complete halt. Russia and Ukraine used to account for around 2 percent of Vietnam’s seafood exports.

    VASEP expects gasoline prices to continue to cast a shadow on the industry in the coming months, but growth to be driven by recovering demand in other markets like the U.S and the E.U.

    It forecast 25 percent growth in exports in April.

  • Vietnam to import coal from Australia amid power shortage fears

    Vietnam to import coal from Australia amid power shortage fears

    Vietnam wants to import around five million tonnes of coal from Australia amid a domestic shortage that has forced power plants to cut production.

    Apprising Australian ambassador Robyn Mudie about this on Friday Minister of Industry and Trade Nguyen Hong Dien sought his help to link up Vietnamese companies with their Austrian counterparts so that they could start buying the coal this month.

    Australia is one of the world’s biggest coal exporters. The trade ministry is also looking for sources in South Africa. National utility Vietnam Electricity (EVN) said this week that several thermal power plants in the northern and central regions are cutting down production to 60-70 percent due to a coal shortage.

    It also warned of the risk of power shortages from this month. But the trade ministry has said there will be no power shortages this year. It is mobilizing around 3,700 megawatts from other coal- and gas-fired plants and renewable and hydropower sources.

    EVN said that by 2025 another 5,500 megawatts of renewables are needed to ward off power shortages. It has also called for incentives for rooftop solar. The company is seeking the government’s permission to build wind power plants in the north. Most plants now are in the central and southern regions.

    Coal-fired plants accounted for 43.6 percent of total power generation in February, according to EVN. Vietnam promised to achieve net-zero emissions by 2050 at the U.N. Climate Change Conference in the U.K. last November.

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