People buy fewer cars, billionaire Tran Ba Duong's Thaco profits 'evaporate' thousands of billions

Truong Hai Group Corporation (Thaco Group) of Mr. Tran Ba Duong has just announced to the Hanoi Stock Exchange (HNX) about its financial situation for the first half of 2023.

Accordingly, Thaco Group recorded a profit after tax of VND1,076 billion, much lower than the VND4,940 billion in the same period last year. This also means that the profit decreased by 4.6 times.

Thaco Group said its profit margin dropped from 9.9% in the same period last year to just 2.1%. Thaco Group's equity increased slightly to VND50,095 billion. The debt-to-equity ratio increased from 1.8 times to 2.29 times.

Thaco Group's profits have fallen sharply amid a difficult auto market and plummeting sales. Statistics show that in the first 8 months of 2023, the whole country sold 58,000 vehicles, down 40% year-on-year. This is also what Mr. Tran Ba Duong had predicted since the beginning of the year.

However, Thaco Group still plans to sell 120,000 vehicles, including 96,000 passenger cars, 23,500 trucks, 1,500 buses and mini buses in 2023.

In the automobile sector alone, Thaco Auto (a subsidiary of Thaco Group) expects consolidated revenue of over VND90,000 billion.

Previously, information about Thaco Group's weak profits was reflected through the semi-annual report of Jardine Cycle & Carriage (JCC), a major shareholder holding 26.6% of Thaco's shares.

According to JCC's semi-annual report, the group recorded a profit of 583 million USD in the first half of 2023, up 12% over the same period last year. In JCC's profit structure, Thaco's contribution reached 14.7 million USD, down 72% over the same period.

Thaco's profit decline is due to a weakening economy and tightening consumption, along with increasing pressure from competitors.

Although Thaco's profits in the first half of 2023 decreased compared to the same period, the assets of billionaire Tran Ba Duong and his family remained at 1.5 billion USD, according to Forbes.

In 2019, JCC bought Thaco's privately issued shares at a valuation of more than $9.2 billion. However, Thaco's valuation has recently dropped sharply.

According to the financial report of VietinBank Securities, this enterprise has sold more than 4.7 million unlisted shares with a total sale value of 141 billion VND (equivalent to 30,000 VND/share). Thaco's valuation is thus at 91,500 billion VND (equivalent to about 3.8 billion USD).

At the end of June 2023, Thaco said it planned to sell 10% of its shares in Thaco Auto Company Limited, a subsidiary specializing in automobile manufacturing and trading, in 2023. According to a source, Thaco Auto could be valued at $5 billion.

Currently, Thaco is a multi-industry industrial corporation including Thaco Auto (automobiles), Thaco Agri (agriculture and forestry), Thaco Industries (mechanics and supporting industries), Thadico (construction investment), Thilogi (Logistics) and Thiso (trade and services).

In which, Thaco Auto is the main unit, specializing in manufacturing, assembling, distributing and retailing vehicles of the brands KIA, Mazda, Peugeot, BMW... The system of nearly 400 retail showrooms nationwide and has a production complex with 7 factories (KIA, Thaco Royal, Mazda, Luxury Car factory, motorcycle factory, bus factory, truck factory and specialized trucks) located in Chu Lai industrial park (Quang Nam).

In 2022, Thaco recorded a profit of VND7,400 billion but its debt was high, more than VND104 trillion (USD4.4 billion).

Thaco's profit dropped 72%, billionaire Tran Ba Duong still has 1.5 billion USD Thaco's profit in the first half of 2023 decreased sharply compared to the same period. Recently, the valuation of this enterprise has also decreased. The assets of billionaire Tran Ba Duong and his family are still at 1.5 billion USD.

Source