Textiles firms race to list on stock market

Song Hong Garment JSC debuted on the Ho Chi Minh Stock Exchange (HoSE) in late November 2018 by listing more than 47.6 million shares with the code MSH.

The company started trading at the price of VND45,000 (US$2) per share, making its market capitalisation up to VND2.14 trillion (US$95.25 million) on the debut day.

As of October 1, the company had 511 shareholders including four institutional investors and 507 individuals.

Song Hong, established in 1988 in Nam Dinh province, has grown from a small company into one of the country’s leading garment and bedding manufacturers, with nearly 11,000 employees and more than 20 factories.

It makes products for global brands such as Nike, Levi’s, Calvin Klein, Tommy Hilfiger, DKNY, Karl Lagerfeld, Hurley, Converse, Jordan, Columbia Sportswear, Gap, Bugatti, Dillards, and Express.

It produces and exports 60 million products a year, including jackets, pants, shirts, dresses, t-shirts and polo neck shirts.

Song Hong’s bedding product brand has been one of the leaders in the domestic market for the last 10 years and has expanded exports to markets such as Japan and the Republic of Korea.

In the first nine months of this year the company reported profit before tax of VND335.5 billion (US$14.6 million) on revenues of nearly VND3 trillion (US$130.4 million), 107% and 21% up year-on-year.

Since 2015 it has paid cash dividends of 45% every year. A 35-40% payout is planned for 2018 and 35% for 2019.

It plans to expand capacity by 30% from 2020 by investing in another production facility in Nam Dinh province.

The Hanoi Stock Exchange (HNX) approved the listing of more than 15.4 million shares of Det May 7 JSC (DM7) on the Unlisted Public Company Market (UPCoM) in late October with reference price of VND11,800 per share.

DM7’s main business is producing ready-made apparel and textile products like yarn, string and mesh. In the first half of 2018, DM7 achieved revenue of more than VND431.4 billion (US$18.7 million) and after-tax profit of VND20.7 billion (US$900,000), up respectively by 42.8% and 85.4% over the same period in 2017. The company plans to pay 10% dividend in 2018.

Ealier on July 18, HNX officially put more than eight million shares of Investment and Development Joint Stock Company (TDT) on the northern stock exchange with a total listed value of VND80 billion (US$3.5 million) and reference price in the first trading day of VND15,000 (US$65 cents) per share.

Since its establishment, TDT’s revenue has mainly come from the simple outsourcing activities - Cut, Make and Trim (CMT), meaning that the company is just responsible for cutting the fabric, and making and trimming the garments.

Since 2016, the company switched their production methods to free on board (FOB) method, allowing the enterprise to involve in the selection of input material with the materials imported from an unit appointed previously by the firm’s partner.

Since they applied the new production method, revenue of TDT has come mainly from exports. Domestic sales accounts for only 6 to 18%, generating mostly from the outsourcing activities (CMT) for domestic partners like Duc Giang Garment Corporation, Viet Sun Investment JSC and Athena JSC.

Last week, Binh Minh Garment Joint Stock Company put more than 5.29 million of its shares (BMG) with the total registered transactions value of VND52.9 billion (US$2.3 million) on the UPCoM.

The company was formerly known as Binh Minh garment factory established in 1975. At that time, the factory had a 2,500-metre factory, about 200 machinery and equipment and more than 300 workers. Its products were mainly exported to Eastern Europe and the Russian markets.

In 1999, the company transformed itself into a joint stock company. As of 2018, Binh Minh had charter capital of VND52.9 billion (US$2.3 million).

Currently, the company has more than 2,500 employees, three branches with a factory area of more than 40,000 metres in HCM City, Hanoi, the southern province of Binh Duong and the northern city of Hai Phong, with more than 3,000 machines and equipment.

Binh Minh Garment processes garment products under FOB method, partnering with various brands like Owen, Uniqlo, Umbro, Vanhausen, Fila, Lee, Limeted too, American, Eagle and VHF. The main exported products of the company include high-end shirts, sportswear and jackets of all kinds, exported to Japan, America, Europe and other countries

BMG also has its own brands for domestic consumption named Gendai, providing shirts, t-shirts and sportswear.

As of late December 2018, Binh Minh Garment completed 76.1% and 77.8% of the revenue and after tax profit plans for 2018.