THACO Group profits drop sharply amidst grey market

September 30, 2023 | 10:00

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THACO Group gained $45.4 million in net profits in the first half of the year, declining by 75 per cent compared to the same period in 2022.

Thaco Group profit drops sharply for difficulties

The business results were announced by THACO Group in a financial statement to the Hanoi Stock Exchange last week.

In the first half of the year, THACO reported about VND1.07 trillion ($45.4 million) in after-tax profit, equivalent to almost 25 per cent of the same period last year. The profit margin also decreased by nearly five times, down to 2.1 per cent on-year.

The domestic car market has remained sluggish for around a year, so numerous models assembled and distributed by Thaco have had their prices reduced by $5,000-10,000 in an attempt to stimulate demand.

Earlier this year, chairman Tran Ba Duong predicted that this year's car market would be weaker compared to 2022, and competition would become increasingly fierce. However, the business still set a yearly sales target of over 120,000 vehicles, which covered 96,000 passenger cars, 23,500 trucks, and 1,500 buses and minibuses.

THACO Auto, the key company of the group, is expected to achieve a consolidated revenue of over VND90 trillion ($3.8 billion) for the year, including VND5.2 trillion ($219.4 million) from services.

According to the Vietnam Automobile Manufacturers' Association, in the first eight months of the year, THACO sold 58,000 vehicles, down 40 per cent on-year and only reaching just under half of the annual target.

As of the end of June, the vehicle manufacturer's equity reached over VND50 trillion ($2.1 billion). THACO Group's debt-to-equity ratio is 2.29 times, with a debt of about VND115 trillion ($4.85 billion) – an increase of about 27 per cent on-year.

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The automaker Truong Hai Auto Corporation (THACO) is mulling plans to invest in a mechanical supporting industrial park with the total investment capital of $1 billion in the southern province of Binh Duong.

THACO INDUSTRIES one-stop model

Leveraging seamless investment, THACO INDUSTRIES is expected to become a critical factor in promoting the development of the mechanics and supporting industries in the central region and Vietnam. Vietnam currently has over 7,000 mechanical manufacturers and 5,000 manufacturers in supporting industries. However, due to the limitation of capital, technology, and human resources, most manufacturers only produce or process in one or a few stages. Customers have to connect with many partners to obtain a complete product, making the supply chain complicated, inefficient, time-consuming, and costly.

THACO Group seeks to sell 10 per cent stake in THACO Auto

THACO Group, the conglomerate led by Vietnamese billionaire Tran Ba Duong, is looking for investors to acquire a 10 per cent stake in THACO Auto, its subsidiary specialising in vehicle manufacturing and sales.

By Nguyen Huong

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