Gelex targets making it to Top 20 Vietnamese private businesses

In 2018 GELEX gained its highest revenue ever

2018 – a year of solid growth

2018 was a successful year for Gelex with record revenue and profit topping out three years of comprehensive restructuring. Gelex was a member of the trillion dong profit club. Revenue growth in 2018 reached 14.3 per cent over the same period of the previous year, at VND13.7 trillion ($595.7 million) – the highest ever. Pre-tax profit was VND1.533 trillion ($66.7 million), up 41.6 per cent compared to 2017.

However, Gelex only met 84.2 per cent of the annual profit target. The reason was that GELEX’s 2018 plan included the target of purchasing and becoming the majority shareholder of Dong Anh Electrical Equipment Corporation Joint Stock Company (EEMC). However, in 2018, the state capital exit from EEMC was not realised, thus, Gelex has not fulfilled this target.

Gelex’s total assets went up sharply in 2018: from VND3.5 trillion ($152.2 million) at the beginning of the year to VND17.2 trillion ($747.8 million). Also, owner’s equity increased by over VND1.8 trillion ($78.26 million), to about VND7.965 trillion ($346.3 million), while owner’s equity grew from VND2.668 trillion ($116 million) to VND4.065 trillion ($176.74 million) in the same period.

Gelex posted growth in all business lines, with industrial production remaining its core business. In 2018, the industrial production-electrical equipment business grew by 8.7 per cent. This line of business brought about VND11.312 trillion ($491.8 million) in revenue in 2018 compared to the VND10.419 trillion ($453 million) in 2017, while gross profit stood at VND1.559 trillion ($67.8 million), unchanged since 2017.

The most highlighted business subsidiary was CADIVI. CADIVI’s consolidated revenue in 2018 increased sharply by 25 per cent on-year, equivalent to VND8.546 trillion ($371.57 million). Its after-tax profit climbed 27 per cent, or VND415 billion ($18 million). Regarding its cable business, last year’s revenue gained VND8.012 trillion ($348.35 million), up 12 per cent and consolidated pre-tax profit was VND495 billion ($21.5 million), up 30 per cent compared to 2017.

In 2018, Gelex focused on improving its electrical equipment portfolio, targeting the production and supply of various products for all three voltage levels, like LV, MV, and HV. Gelex, through a member company, invested in EEMC and MEE, introducing the transmission transformer as a new portfolio. So far, the electrical equipment portfolio of Gelex has roughly covered all available products for the power sector.

In addition, the utility business, including power generation and water, logistics, and real estate, has achieved significant growth. Gelex Energy grew by 140 per cent, with the revenue of VND585 billion ($25.4 million), contributing an after-tax profit of VND253 billion ($11 million) to Gelex.

Currently, Gelex Energy is investing in new power generation projects such as Gelex 1, 2, 3 power projects in Quang Tri, Huong Phung 2 wind power project, Huong Phung 3 wind power project, and Binh Phuoc solar power project with the total capacity of 90MW, 20MW, 30MW, and 416MWp, respectively.

Gelex Logistics’ revenue was VND1.761 trillion ($76.57 million), up 21 per cent on-year and 6.3 per cent higher than the target for 2018. Regarding real estate, Gelex Land went into great efforts to improve the performance of projects such as Gelex Tower at 52 Le Dai Hanh Street, Melia Hanoi, and the project at No. 10 Tran Nguyen Han Street, Hanoi.

These achievements were thanks to Gelex’s efficient combination of its long-term core values, ownership restructuring, unique business model, and professional governance.

Industrial park real estate and construction material business development

In 2019, GELEX shall focus on two core businesses: (1) industrial production and (2) infrastructure, including water, logistics, and real estate, represented by subsidiaries Gelex Electrics, Gelex Energy, Gelex Logistics, and Gelex Land. Specifically, Gelex aims for a consolidated revenue of VND16.7 trillion ($726 million) and consolidated pre-tax profit of VND1.38 trillion ($60 million).

Nguyen Van Tuan, chairman and CEO of Gelex, said: “Our development strategy in the coming period is to further expand from industrial production to other similar/supplementing business lines such as construction materials or industrial park real estate including social housing in order to facilitate workers in industrial parks, enhance the attractiveness of industrial parks, and contribute to social security. Gelex’s objective is to provide ‘solution packages’ to the market beside the existing individual products.”

At the same time, Gelex shall continuously multiply its successful business models in logistics, renewable energy and real estate, pursuing a list of assets with stable and long-term cash flows for shareholders. Given these results and its potential capacity and advantages, Gelex aims to be among the Top 20 Vietnamese private businesses in 2019.