Largest baby products chain reports surge in profits

By Phuong Dong   June 12, 2019 | 05:24 pm PT
Largest baby products chain reports surge in profits
A Con Cung store in HCMC. Photo by Con Cung.
Con Cung reported its after-tax profit grew by around 60 percent a year between 2016 and 2018.  

Its revenues grew by an average of 72 percent in the period, financial disclosure by the company for a private bond offering showed. 

Despite being involved in a scandal last year in which it was alleged to have misrepresented the origin of some products, revenues jumped to VND1.56 trillion ($66.96 million) from VND922 billion ($39.58 million) in 2017.

Profits after tax in 2018 were VND50 billion ($2.14 million), up 22 percent from VND41 billion ($1.75 million) the previous year. 

Fast-moving consumer goods (milk, diapers, personal care products) accounted for the biggest share of its revenues at over 58 percent. The rest came from fashion items, toys and other children's play items.

According to securities company SSI, Con Cung’s profit margin has been decreasing as it focuses on expanding with a concomitant increase in expenses. These are the two biggest weaknesses of the enterprise, SSI said. 

"With over 400 stores in 45 provinces and cities since starting in 2011, Con Cung has a big advantage when negotiating with suppliers in Japan, Korea, Thailand, and Europe to reduce prices." 

It said the company, which it dubbed "the largest mother and baby chain in Vietnam", still has room to grow since income of Vietnamese consumers is increasing. 

According to the disclosure, Con Cung is trying to raise VND50 billion ($2.15 million) to supplement its working capital by issuing 18-month corporate bonds. The company wants to have 1,000 stores within the next three years and annual revenues of VND10 trillion ($429.26 million). 

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