Shifting to consumer services has yet to pay out for Yeah1 as its deficit grew by VND180 billion ($7.82 million) last year.
|Yeah1 has been ailing since parting ways with YouTube |
Yeah1 (HSX: YEG) has just published its financial report in 2020. After-tax losses increased by VND29billion($1.26 million), bringing its total losses last year to VND180 billion ($7.83 million).
Yeah1’s management board blamed the deficit on the VND44 billion ($1.9 million) it had to set aside as a provision for inventories that was added to the prime cost. Moreover, switching to consumer services last year (GIGA1 platform, a factory-to-end straight multi-channel trading platform ecosystem) cost the company many resources, leading to increased expenses.
Yeah1’s chairman Nguyen Anh Nhuong Tong told VIR that since late 2019, the company has rejuvenated and poured more capital into the new business. He explained that the first phase of the development last year demanded a large investment to build up bases such as human resources, goods, and business strategies.
“We are now in the second phase – release,” said Tong. “So far, our consumer business has been looking for market and partners so the initial revenue from the segment is not big enough to cover the many kinds of expenses.”
Yeah1 also stated that the COVID-19 impacts and the social distancing last year have been hampering its operations in key segments like media and digital platforms, as well as consumer services.
Regarding solutions for the consequences, Yeah1 will focus on developing the consumer system and extend co-operation with new partners from the second quarter this year. The management board also targeted to generate 20 per cent of the group's profit from media and digital platforms in 2021.
Meanwhile, YEG stocks have been plunging for years. As of the morning of April 13, it was at VND27,300 ($1.19) per share, much lower than the VND49,800 ($2.17) in last August. Moreover, HSX has been constantly issuing warnings for the ticker due to its tremendous losses. As soon as YouTube announced stopping work with the group in March 2019, 35 per cent of Yeah1's share value evaporated.
Last year also marked the co-operation between Yeah1 and local soft drink maker Tan Hiep Phat. Tran Uyen Phuong, general director of Tan Hiep Phat in 2020 spent about VND300 billion ($13 million) to own 6.05 million stocks, equivalent to 21.61 per cent of Yeah1 shares.