Companies with exceptional business make good earnings

March 22, 2021 - 08:44
The number of unorthodox companies is increasing rapidly on the Vietnamese stock market, generating steady revenue and profit every year.


Workers of Yên Bái Joint Stock Forest Agricultural Products And Foodstuff Company (CAP) make votive paper. Votive paper segment accounts for 50 per cent of CAP’s total revenue. Photo courtesy of the company

HÀ NỘI — The number of unorthodox companies is increasing rapidly on the Vietnamese stock market, generating steady revenue and profit every year.

HaiPhong Funeral Services JSC (CPH), the only funeral service provider on the stock market so far, posts impressive business results with revenues of hundreds of billion Vietnamese đồng per year, earning some VNĐ300 million (US$13,000) of revenue per day.

CPH trades pots, caskets, stone tombs and other funeral products, as well as providing funeral, burial, cremation services.

In the company's gross profit structure, the sale segment accounts for about 80 per cent of the total gross profit. After-tax profit has been flat for many years with about VNĐ9 billion. Earning per share (EPS) is over VNĐ2,060 in 2020.

The company has paid dividend at a rate of 16 per cent to shareholders over the past four years. And due to maintaining a low transaction price of VNĐ3,500 per share at present, the price-to-earnings (P/E) is at the desired level at 1.7 times.

Another company which also serves in the spiritual realm is Yên Bái Joint Stock Forest Agricultural Products And Foodstuff Company (CAP). Few people know that this company produces and sell votive paper.

Votive paper segment accounts for 50 per cent of CAP’s total revenue, bringing about VNĐ200 billion in 2020. The rest of revenue comes from tapioca and cinnamon oil.

On the stock market, CAP shares have been rising continuously. Currently, CAP is trading at around VNĐ62,100 per share, doubling that of the beginning of 2020.

Thai-invested Siam Brother Vietnam (SBV), established in July 1995, manufactures ropes and fishing equipment. After nearly 30 years of operation, SBV is now the leading producer and supplier of fishing ropes in Việt Nam.

Despite the impact of the COVID-19 pandemic, revenue in 2020 grew approximately nine per cent compared to the previous year, to reach VNĐ5 trillion, post-tax profit increases by 19 per cent to VNĐ68 billion. EPS reached VNĐ2,485.

Charter capital of Siam Brothers Vietnam is approximately VNĐ273 billion at present, market price is around VNĐ13,000 per share. Market liquidity is quite stable with tens of thousands to hundreds of thousands of shares matched each session.

Thống Nhất Match Joint Stock Company (DTN), a match manufacturer, decided to leave the stock market last year after six years of trading. It sees revenue reaching over a hundred of billion đồng in recent years, particularly VNĐ133 billion in 2019. However, the annual profit touched only around VNĐ2-4 billion. It was even less than VNĐ1 billion in 2019.

During its listing, DTN shares were seeing almost no liquidity. Very few transactions were made, mostly internal transactions.

Before it left the trading floor in August 2020, there were some transactions with thousand of DTN shares matched. The stock price of DTN suddenly soared to VNĐ74,000 per share after these transactions. DTN closed the last session of trading on the stock exchange at the price of VNĐ62,900 per share.

Merufa Joint Stock Company (MRF), the only condom manufacturing company on the stock market, has been listed since December 2017.

Merufa, formerly known as the Medical Rubber Enterprise under the Ministry of Health, was built in co-operation between the Government of Việt Nam and the United Nations Population Fund in 1987. Since then, Merufa has been providing the market with contraceptive products made from natural rubber in Việt Nam with the brand HAPPY.

Not only condoms, Merufa is also a pioneer in researching and producing other important medical products such as surgical gloves, transfusion bottles made from synthetic rubber.

Merufa’s condom business has faced many difficulties recently as it has to compete with famous foreign brands.

In 2020, in the face of widespread COVID-19 pandemic, the demand for gloves in the market increased sharply, the company decided to invest in a second glove factory with a total investment of VNĐ230 billion.

In 2019, Merufa recorded nearly VNĐ108 billion in revenue, up 10.2 per cent from the previous year. The post-tax profit rose by 165 per cent to nearly VNĐ6.7 billion. EPS was VNĐ1,818.

Nam Hoa Toys (NHT) specialises in producing wooden toys for children, the only of its kind on the market at present. The company put its shares on the Upcom since December 2017.

NHT has also considered moving to list on the Hà Nội Stock Exchange (HNX), but the procedure has not yet completed.

Business results, revenue in 2020 suddenly quadrupled from 2019, reaching VNĐ887 billion and after tax profit increased 78 per cent, to over VNĐ78 billion, mainly thanks to the consolidated business results of its subsidiaries. — VNS