Long fall of Vietnam’s once iconic milk brand

May 24, 2018 | 15:00
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Four months after returning to trade on the stock market, once famous milk brand Hanoimilk once again faces the risk of compulsory delisting for being late with its audited financial reports.
long fall of vietnams once iconic milk brand
Hanoimilk's most popular product, the IZZI milk. Source: vnexpress.vn

According to the Hanoi Stock Exchange’s document sent to Hanoi Milk JSC (Hanoimilk, code: HNM) on May 14, the company has been delaying submitting its audited financial reports during the past three years (2015-2017). Last July, the trading of the company shares was suspended for similar reasons.

The document also stated that Hanoimilk may be delisted from the stock exchange in accordance with the government’s Decree No.58/2012/ND-CP on detailed regulations and guidelines for the implementation and amending some articles of the Law on Securities.

Talking with VIR about the risk of compulsory delisting, Hanoimilk’s representative said: “We are working with the Hanoi Stock Exchange to resolve this issue.”

After this information was published, Hanoimilk’s stock fell sharply. As of May 23, 2018, the company’s stock was at VND2,700.

Hanoimilk used to be one of Vietnam’s leading milk brands with the capacity of 40 million litres of milk per year. Newswire vnexpress.vn stated that according to a non-official report, the firm once made up 28 per cent of the pasteurised milk market for children and 9 per cent of the domestic milk market.

Hanoimilk’s IZZI brand named among top 10 food brands of Vietnam

After focusing on the IZZI pasteurised yogurt brand, Hanoimilk even planned to diversify its products, including powdered milk, condensed milk, and fruit juice, to compete with other domestic and foreign milk enterprises. In addition, the company wanted to utilise the plan’s success to enter a joint venture, franchise, and lease the brand.

According to its financial report in this year’s first quarter, Hanoimilk’s revenue reached VND29.36 billion ($1.29 million), down 79.4 per cent year-on-year. Its after-tax profit hit VND100 million ($4,405), dropping 50 per cent year-on-year.

At its annual shareholders’ meeting two years ago, Hanoimilk still had the ambition to maintain its position as one of the top three milk enterprises in Vietnam and a leading nutritional product manufacturer for children.

However, after more than 10 years of being listed on the stock exchange, Hanoimilk has produced the opposite results by commonly reporting falling profits due to bad sales.

Hanoimilk's annual shareholders' meeting in 2018 will be held on June 30. Falling sales and issues related to the Hanoi Stock Exchange may be the main content of the meeting.

Regarding its bad sales, the representative also told VIR that Hanoimilk is overcoming this difficulty.

Newswire vnexpress.vn quoted Hanoimilk’s leaders as saying that negative growth was a result of external factors such as the fierce competition between milk companies. In addition, its limited financial potential has affected marketing and promotion activities, which in turn curbed revenue.

Founded in 2001 and officially coming into operation in 2003, Hanoimilk JSC used to be one of Vietnam’s leading dairy enterprises with branded dairy products IZZI, Yotuti, and Hanoimilk 100 per cent fresh milk.

By Van Anh

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