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Prosperous enterprises despite COVID-19

Prosperous enterprises despite COVID-19

Thursday 23, 04 2020
The effects of COVID-19 on the global economy in general and on the Vietnamese economy in particular are getting more apparent

Taking advantage of the available materials to shift business direction and meet the demand of the short-term market amid COVID-19, enterprises such as suppliers of masks, handwashing gel, medicine, and food are having significant growth rates.

The effects of COVID-19 on the global economy in general and on the Vietnamese economy in particular are getting more apparent, proving by the fact that many enterprises have had to declare bankruptcy due to the inability to continue operation.

Meanwhile, taking advantage of the available materials to shift business direction and meet the demand of the short-term market amid COVID-19, enterprises such as suppliers of masks, handwashing gel, medicine, and food are having significant growth rates.

Masks compensate for the losses in the tradition sales of textiles enterprises

Firstly, mask supplying and manufacturing enterprises ended the first quarter of 2020 with a positive sign in this new product group, even though the traditional field has been affected by the epidemic. Specifically, during the domestic mask craze at the beginning of February, many enterprises recorded immense growth in domestic revenue.

Particularly, the domestic revenue in February of TNG Investment and Commerce Joint Stock Company increased by 240% compared to the same period last year. The total accumulated revenue in the first 3 months of the year of TNG only dropped by 4% to 773 billion VND even though the company was affected by COVID-19, resulting in the delay in materials import and delivery, reducing the core factor targets.

The production of anti-bacterial masks for anti-epidemic helped domestic sales in the last quarter to reach more than 63 billion, increasing by 10% over the same period. As a result, the after-tax profit reached nearly VND 34 billion, falling by 10% over the same period last year.

The highlight from the mask business also contributed to the positive increase in the market price of TNG shares. Currently, TNG is trading at VND 11,600 / share. Danameco Health Joint Stock Corporation (DNM) has just announced its first-quarter results with revenue increasing by 225% to 127 billion VND; Gross profit increased by 134% to 24 billion VND. Deducting expenses, the Company's NPAT surged by 650% to VND 8.2 billion, equivalent to the whole year's profit of 2019.

DNM said the company had focused on boosting the production of anti-epidemic products such as masks, anti-epidemic uniforms, etc. as soon as the outbreak occurred. This enterprise had also invested in machinery, increased production capacity, and expanded market.

Textile and Garment Group (Vinatex), despite being burdened with costs and facing the risk of liquidity loss, still recorded a highlight in the first quarter as domestic sales increased by 9% over the same period last year.

However, the decline in export revenue caused the Group's revenue to fall by 7% over the same period last year, fulfilling 20% of the year plan. Notably, the production of antibacterial cloth masks had helped the Group and its affiliates to offset the shortage of traditional products, the Group emphasized.

Prosperous enterprises despite COVID-19

Enterprises supplying hand-washing gels recorded incredible results

Another notable product is hand-washing gels. Lix Detergent (Lixco, LIX) has just announced the first-quarter revenue of over 880 billion VND, rising by 54% over the same period. In particular, the increase mainly came from the domestic revenue of 776 billion VND, increasing by 64% through the sale of On1 dry hand sanitizer products during the epidemic.

The surge in demand for hand sanitizers and other detergents partly helped boost its domestic sales. On the stock exchange, LIX shares are currently trading at 57,900 VND / share (at the end of the 17th April session), which is an increase of about 38% compared to the beginning of the year and the price is now nearing the historical peak in 2016. Net detergent (Netco, NET) also ended the first quarter with a sudden result, its net sales increased by 42% to 357 billion VND as the increased sales volume and profit after tax increased by 108% to 32 billion VND. This has been the quarter with the highest profit results in the listing history since 2009.

Pharmaceutical and foodstuffs also gained interest among the epidemic

Finally, the pharmaceutical industry has also benefited from the epidemic thanks to the demand for medicines and especially food that increases resistance and vitamin C. Accordingly, DHG Pharma (DHG) has just announced its revenue of VND 858 billion in the first quarter of 2020, which is an increase of 12% compared to the same period last year.

The gross profit increased by 26% to 423 billion VND, and the gross profit margin increased from 44% to 49%. The company said the demand for drugs was rising during the COVID-19 epidemic, especially for resistance-boosting products that helped boost sales.

Besides, the Company has also organized a good distribution and customer connection system, focusing on selling key products, implementing projects to increase labor productivity and production efficiency to help reduce costs. As a result, DHG's net profit in the first 3 months increased by 31% to 177 billion VND. Dabaco (DBC) also recorded revenue of 3,248 billion VND and 340 billion VND in after-tax profit.

Compared to the same period, in the first quarter of 2020, DBC's profit is 17 times higher. In the first quarter of the year, the company said it had increased production of essential products such as fresh chicken eggs, processed chicken eggs, processed foods from meat, and organized a safe distribution and transportation system to consumers.

Farmers have also increased the sale of pigs and broilers to provide the market with stable and high-quality food supply in the context of the disease. On the market, the DBC code has also continued to increase well in recent sessions. Currently, the Company's stock has dropped to the bottom for 2 consecutive sessions after sublimation, trading at VND 24,250 / share.

​>> All businesses are affected by Covid 19

Source: https://cafef.vn

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