King of Elevator Media, Chicilon Media's Poor Business

Elevator media "boss" with the shadow of VinaCapital

Office workers, residents in apartment buildings, tourists, etc. have long been familiar with advertising videos and posters in elevators of buildings. When it comes to elevator media channels, one of the most notable names on the market today is Thien Hy Long Vietnam Information and Communication Technology Joint Stock Company (Chicilon Media).

Chicilon Media's business results were disappointing in the elevator channel announcement picture 1 — Chicilon Media was once in the "Top 500 Growing Enterprises in 2021".

Chicilon Media was established in 2006, specializing in providing businesses with effective communication solutions through TV screen systems and poster systems in building elevators. This unit has provided communication services to more than 700 customers in Vietnam for many years such as Vinamilk, Samsung Group, Unilever, LG, Viettel, Daikin, VNPT, FPT, Masan , OPPO, VIVO, Midea, AQUA... and many other large corporate customers.

Mr. Guo Zhi Feng, Chairman and CEO of Chicilon Media, recently shared with the media: “In the context of the current major economic recession, Chicilon Media has gone against the trend. In just 4 months from May to August 2023, Chicilon signed cooperation contracts with 204 residential areas (buildings), installed 5,855 advertising devices, and the company's building resources increased by 25%. This is the year with the highest growth rate of media resources since Chicilon Media was founded.”

Previously, in early February this year, Chicilon Media successfully raised $30 million from VinaCapital. The company's charter capital after the capital call increased from VND750 billion to more than VND794 billion. This is not the first time VinaCapital has invested in Chicilon Media. Since 2008, venture capital fund DFJ VinaCapital has made a strategic investment in this advertising company.

Business is volatile.

Introduced as the “ruler” of the elevator media channel, Chicilon Media’s business results have been very erratic. The company had a period of 2019-2021 with consecutive sharp declines in both revenue and profit.

In 2021, Chicilon Media recorded its lowest revenue in many years at VND664 billion, down more than 7% compared to the previous year. The company's after-tax profit that year also dropped to a record low of only VND62 billion, down 30% compared to the same period. In 2020, Chicilon Media's revenue and profit even decreased by 39% and 78% respectively compared to the same period in 2019.

The situation changed in 2022 when the company recorded revenue of VND885 billion, an increase of more than 43% over the same period. Profit after tax also skyrocketed 4.3 times compared to 2021, reaching VND268 billion. However, the above figures are still significantly lower than the results achieved at the peak in 2019.

Chicilon Media's business results were disappointing in the elevator channel announcement picture 2

In terms of scale, since 2019, Chicilon Media's total assets have consistently remained above the trillion mark. By the end of 2022, this figure reached VND 1,484 billion, the highest in many years. Most of the assets are financed by equity. As of December 31, 2022, the company's equity reached VND 1,027 billion, of which the charter capital was VND 750 billion. The remainder is mainly accumulated undistributed profit after tax.

Although Chicilon Media has a large amount of equity, it is still increasing its debt capital. Total liabilities by the end of 2022 will be VND457 billion, one and a half times higher than in one year and the highest level in many years. However, this figure is only less than half of the equity, corresponding to a fairly low financial leverage ratio.

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