Vietnam's first condom maker to list on stock market

By Minh Nga   December 7, 2017 | 11:59 am GMT+7

It's actually medical gloves that are driving the business for this condom making pioneer.

Merufa Joint Stock Company, the first condom producer in Vietnam, has announced plans to list on the capital's stock exchange on December 12.

According to a decision singed on Tuesday by the Hanoi Stock Exchange, Merufa will be listed on the Unlisted Public Companies (UPCoM) market under the code MRF, and will offer 3.67 million shares.

The reference price for the shares has been set at VND18,600 ($82 cents).

Merufa was formed in 1987 under the Ministry of Health as part of an agreement between Vietnam’s government and the United Nations Population Fund.

In 2002, it started operating as a joint stock company with a charter capital of VND20 billion ($880,600), which now stands at VND37 billion.

The company’s annual financial report last year showed it had four main shareholders: the state-owned Vietnam Medical Equipment Corporation Co., Ltd with a 16.16 percent stake, Saigon Thuong Tin Commercial Joint Stock Bank (Sacombank) with a 6.59 percent stake, Military Commercial Joint Stock Bank (MBBank) with a 6.06 percent stake and Minh Tam Co., Ltd, a Hanoi-based firm that specializes in making and trading medical equipment, with a 5.97 percent stake.

Aside from condoms, Merufa also produces medical gloves and caps for medical drips, but it was the gloves that benefited the company the most last year, accounting for 84 percent of its total revenue.

The company earned VND80 billion in revenue in 2016, down 11 percent against 2015 due to fierce competition that forced it to cut prices.

But thanks to the application of advanced technologies, it secured VND26 billion in net profit, a staggering increase of more than 160 percent.

However, the outlook for this year is far less encouraging, with the company forecasting just a 5 percent rise in revenue and a significant drop of 92 percent in net profit to just VND2 billion.

According to a Reuters report on Tuesday, Vietnamese shares reached decade-highs and topped Asia-Pacific with the highest price gains in November, bolstered by rising foreign interest. The Vietnam Index rose more than 13 percent during the month.

Foreigners were net buyers of about $500 million worth of shares in November, the highest figure in at least seven years.