BUSINESS NEWS HEADLINES APRIL 17     02:36     Shrimp exports to China show drastic upturn after five years China has remained the main buyer of Vietnamese shrimp over the past 5 years, with an average annual growth of 16% and the figure rose to over 55% after a five-year period. According to the Vietnam Association of Seafood Exporters and Producers (VASEP), the five-year period (2015-2019) saw the shrimp industry yield positive results in production and exports, with shrimp farming areas expanding by an average of 1.4% per year, and annual shrimp output by 5.7% on average, mainly thanks to the improved white shrimp farming productivity. It is worth mentioning that white leg shrimp production surged by nearly 41% after 5 years, with an average increase of 9% per year while black tiger shrimp production enjoyed an average rise of 3.1% after the reviewed period. Also during this period, the main export markets of Vietnamese shrimp- the EU, the US, Japan, China, and the Republic of Korea (RoK) accounted for 81-85% of the country's total export value. Meanwhile, exports to China enjoyed the highest growth of over 55% after the five-year period, followed by the EU and the RoK. Of the national total shrimp export volume, frozen shrimp products still made up a large proportion while processed shrimp products only accounted for a considerable proportion in some major markets, with the US holding the highest volume, trailed by the EU, Japan, and the Republic of Korea. Notably, the lower figures were seen in ASEAN and China. In key markets, Vietnam's shrimp products gained an advantage in import tax over other exporting countries like Indonesia, India, Thailand and China, especially with those having signed FTA agreements with Vietnam. This will bring huge benefits to Vietnam's shrimp exports in 2020 and the following years. Fruit, vegetable exports reach 836 million USD in Q1 Vietnam exported 836 million USD worth of fruits and vegetables in the first quarter of 2020, a year-on-year decline of 10.9 percent, according to the Ministry of Agriculture and Rural Development. The decrease was seen in main products such as dragon fruit, banana, longan, watermelon, durian and shiitake. China continued to take the lead in importing Vietnam’s fruit and vegetable with over 300 million USD, down 29.4 percent compared to the same period last year. The sharp decline was attributed to the COVID-19 pandemic. Meanwhile, other markets recorded slight year-on-year growth in January-March such as Indonesia with 2.1 million USD compared to only 164,800 USD in the same period in 2019, Thailand 35.2 million USD as against 7.6 million USD one year ago, Laos 9.6 million USD compared to 2.6 million USD last year, Russia 8.2 million USD against 2.4 million USD in the same period last year, and Cambodia 885,300 USD from 340,000 USD from one year ago. Last year, fruit and vegetable exports lagged behind expectations, reaching only 3.8 billion USD, a year-on-year drop of one percent. According to the Ministry of Industry and Trade, 2019 was a tough year for the sector. China, the country’s largest importer, tightened requirements for imports from Vietnam via strict quarantine measures and origin traceability. However, growth was seen in shipments to several markets such as ASEAN (26.6 percent), the US (10.7 percent) and the European Union (32.2 percent)./. Should SEA Group stop pouring capital in Shopee? With the investment in Shopee seeming far from effective for Singapore-based SEA Group as the platform has been suffering tremendous losses for years now. SEA Group’s latest financial report showed a large gap in earnings between its e-commerce and game businesses. While Garena has been constantly recording high profits for years, Shopee has been submerged in tremendous losses. In 2019, Shopee’s gross merchandise value rose 71 per cent to $17.6 billion. Its adjusted revenue increased by 224 per cent to $942 million. However, its earnings before interest, tax, depreciation, and amortisation (EBITDA) index showed negative growth. The gross profit margin reflected that Shopee has been offering tremendous discounts to gain market share and accelerate turnover. Meanwhile, the game business Garena has showed an impressive growth. Last year, Garena reported $1.8 billion in revenue and $1 billion in pre-tax profit, equivalent to the EBITDA of 40 per cent. According to Tech In Asia, even if Shopee reports profit, its gross margin will be tiny compared to Garena's. In other words, Shopee is burning money earned by Garena. Specifically, the e-commerce platform splurged $765 million out on sales and marketing to get $942 million in revenue and lose $1 billion last year. Garena's sales and marketing expenses were $109 million but the turnover and the pre-tax profits were $1.8 billion and $1 billion, respectively. Taking on losses to gain market share has been a common strategy in regional e-commerce markets in the past years. In 2016, the total losses of the Big Four (Lazada, Tiki, Sendo, and Shopee) in Vietnam hit VND1.7 trillion ($73.9 million). The losses doubled to VND3.4 trillion ($147.83 million) in 2017 and VND5.1 trillion ($221.74 million) in 2018. Indeed, SEA is taking advantage of the e-commerce business to expand to other sectors like financial services. The Singaporean group has been attempting to get a license for e-bank business in the country. That is also the reason why SEA keeps pouring capital into Shopee despite it burning through capital in the blink of an eye. Nevertheless, the strategy seems to be far from useful for SEA because the game business is producing high margins and has yet to reach the saturation point. Every cent of investment and expenditure in Garena can gain much larger benefits than in Shopee. On the other hand, Tech In Asia assessed that maybe investors prefer Shopee over Garena. This is reflected by SEA’s initial public offering (IPO) in 2017, when Shopee was the main factor that helped SEA lure in more investors. Notwithstanding, everything has changed. After the failure of WeWork, investors are more interested in profitability. That means even if the companies produce high growth rates or show positive prospects but are far from making profit in the short term, they will not be appreciated by investors. State-owned corporations and groups may lose $13 billion due to COVID-19 If the COVID-19 pandemic continues to last for a long time and the price of oil cannot recover, the revenue of 19 state-owned groups and corporations will see a plunge of VND279.76 trillion ($12.16 billion) this year, and eight of them will suffer a damage of VND26.32 trillion ($1.14 billion), according to the Committee for Management of State Capital at Enterprises. In the first three months, these 19 firms under the Committee for Management of State Capital at Enterprises reported a total loss of VND3.7 trillion ($160.87 million). The company suffering the largest damage is Vietnam Airlines with a plunge in accumulated revenue reaching VND6.7 trillion ($291.3 million) on-year and loss of VND2.3 trillion ($100 million). If the pandemic lasts until the fourth quarter of this year, its revenue is estimated to decline by VND72.4 trillion ($3.15 billion) compared to its initial target, with VND20 trillion ($869.57 million) in losses. At present, Vietnam Airlines suspended all international flights and keeps domestic flights at a minimum. It has increased the exploitation of both international and domestic cargo flights in order to offset the lost revenue. The VND3.5 trillion ($152.2 million) fund allocated for wages has been exhausted and the company had to look for short-term loans to meet payments. Another case in the aviation sector is Airports Corporation of Vietnam (ACV). In the first quarter, the corporation reported negative VND800 billion ($34.78 million) of revenue and negative VND580 billion ($25.22 million) in profit. ACV forecast VND11.3 trillion ($491.3 million) in revenue and VND1.47 trillion ($63.9 million) in profit for the whole year, down VND10.2 trillion ($443.48 million) and VND9.3 trillion ($404.35 million) on-year. In the transport sector, VietnamExpressway Development and Investment Corporation (VEC) expressed concerns about losing VND15 billion ($652,200) in revenue in the first three months due to the plunge in transport demand in the context of the pandemic. This damage may increase to VND140 billion ($6 million) if the epidemic lasts until the fourth quarter. VND100 billion ($4.35 million) was the damage of Vietnam Railways Corporation (VNR) in the first three months. The figure is estimated to rise VND643 billion ($27.96 million) to VND935 billion ($40.65 million) by the end of this year. Regarding the oil and gas sector, in the first quarter of this year, PetroVietnam saw a decline of VND13.2 trillion ($573.9 million) in revenue and VND4.58 trillion ($199.13 million) in after-tax profit against last year. If the selling price of crude oil decreases to $55 or $30 per barrel, the total revenue of the group will drop by between VND23 trillion ($1 billion) and VND141 trillion ($6.13 billion). Meanwhile, Petrolimex is concerned about a potential revenue loss of about VND12.5 trillion ($543.48 million) this year. Despite the soaring demand for online working and learning due to the pandemic, telecommunications groups – the providers of these services – have not manged to escape the damage of the pandemic. Notably, VNPT forecast that its revenue may decrease by VND6.1 trillion ($265.2 million) while profit could drop by VND1.52 trillion ($66.1 million) against its initial expectations for the whole year. Thailand: Private sector calls for standardised logistics The private sector of Thailand will ask the Thai government to speed up introducing the same practices for logistics procedures nationwide that now exist in a patchwork applied differently across various provinces. According to Suphan Mongkolsuthree, Chairman of the Federation of Thai Industries (FTI), the same practices nationwide are desperately needed because each province or checkpoint has come up with different requirements. Some provinces and checkpoints ask for invoices and goods purchase orders, while some require a certificate from the Fishery Department for fishery products, he cited. Thai Prime Minister Prayut Chan-o-cha announced an emergency decree that came into force on March 26 and runs through the end of April. A nationwide curfew was later added, banning all people from leaving their home from 10pm to 4am, from April 3 until further notice. The measures aimed to contain the spread of the COVID-19 pandemic. Logistics activities, however, are still allowed to ensure a sufficient supply of goods. Suphan said the mess is yet to cause a shortage of goods and food, but to facilitate logistics procedures and make logistics and delivery services smoother, the government should announce the same practices as soon as possible. PetroVietnam suffers sharp drop in first quarter revenue Due to the poor performance of the general economy, the total first-quarter revenue of Vietnam Oil and Gas Group slid VND13.194 billion ($573,650) against the same period last year. The Commission for the Management of State Capital at Enterprises has recently published its report on the business operations of 19 companies under its control. According to the report, in the first quarter of 2020, Vietnam Oil and Gas Group (PetroVietnam) has seen its total revenue decrease compared to the same period of 2019. The report said the total revenue in the first three months of 2020 was VND88.3 billion ($3.84 million), down VND13.194 billion ($573,650) compared to last year. Therefore, PetroVietnam's after-tax income was estimated at VND4.44 billion ($193,000), down VND4.58 billion ($199,130), equivalent to 51 per cent. It is anticipated that in case the epidemic lasts longer and fuel prices stay low, the total revenue of the 19 groups under the Commission for the Management of State Capital at Enterprises will descend about VND279.767 billion ($12.16 million) in the whole year, which will results in payments to the state budget falling by an estimated VND32.836 billion ($1.43 billion). Groups under the commission have been heavily affected in recent years, along with the general oil and gas industry. The reasons are the low fuel prices, as well as the effects of the US-China trade war and the global pandemic. These effects reduced the usage of vehicles and manufacturing operations in sectors like tourism and services. In general, PetroVietnam has suffered from low financial ratios. Particularly in March, the average price of crude oil decreased by $20 (VND460,000), or 33 per cent against month prior. In the first quarter of the year, the average price of oil fell $3.8 (VND89,803) a barrel, tantamount to a 6 per cent decrease compared to the target price of $60 (VND1.38 million) a barrel of the year. Compared to the first quarter in 2019, the average price declined by $9.1 (VND209,300) a barrel, down 14 per cent. Although the gloomy economic picture has had a significant effect on oil and gas prices, the PetroVietnam's production figures are more optimistic. Particularly, crude oil exploitation exceeded the monthly target by 8.1 per cent, and surpassed the quarterly target by 10.1 per cent and accounted for 26.6 per cent of the annual target. The production of electricity in March increased by 2.097 billion kWh, exceeding the monthly target by 3.8 per cent, and achieving 100 per cent of the quarterly plan 24.7 per cent of the annual target. Also, in the previous month, the production of nitrogenous fertiliser was 136,900 tonnes, while in the first quarter production reached 441,800 tonnes, up 5.5 per cent on-year and reaching 28.3 per cent of the annual target. The group produced 1.149 million tonnes of petroleum in March, exceeding the monthly plan by 1.7 per cent, while in the first quarter, total production was 3.415 million tonnes, surpassed the target by 2.5 per cent and reaching 28.9 per cent of the annual target. AWS launches global initiative to spur COVID-19 diagnostics, research, testing Amazon Web Services (AWS) is launching a global initiative with commitment to an initial investment of $20 million to accelerate diagnostic research, innovation, and development to speed the wortld's collective understanding and detection of COVID-19 and other innovate diagnostic solutions to mitigate future infectious disease outbreaks. This is part of the AWS Diagnostic Development Initiative – a global programme to support customers who are working to bring better, more accurate diagnostics solutions to market faster and promote better collaboration across organisations that are working on similar problems. Teresa Carlson, vice president of worldwide public sector at AWS, recently shared a blog post on the Amazon Day One blog, saying, “As COVID-19 continues to spread, we are acutely aware of the impact this is having on families, businesses, and communities. This is a global health emergency that will only be resolved by governments, businesses, academia, and individuals working together to better understand this virus and ultimately find a cure.” The programme will be open to accredited research institutions and private entities that are using AWS to support research-oriented workloads for the development of point-of-care diagnostics (testing that can be done at home or at a clinic with same-day results). Given the need, the emphasis initially will be on COVID-19, but it will also consider other infectious disease diagnostic projects. AWS believes it can make a difference with the AWS Diagnostic Development Initiative programme for several reasons. First, accurate detection is the tip of the spear for any effective pandemic response strategy. Second, diagnostics research has historically been underfunded and largely deprioritised in favor of a focus on vaccines. Third, organisations working on diagnostics need reliable, scalable computing power, which it can deliver to them along with industry-leading services like analytics and machine learning so they can process and analyse large data sets and iterate quickly. The AWS Diagnostic Development Initiative will benefit from the counsel of an outside technical advisory group consisting of leading scientists, global health policy experts, and thought leaders in the field of infectious disease diagnostics. This advisory group will help set the initiative’s priorities, help innovate ways to enable participants to securely share critical research findings, and foster better dialogue between AWS customers and qualified external organisations who may be working independently to solve similar challenges. As Steve Davis, member of the World Health Organization's Digital Health Technical Advisory Group and a member of the AWS Diagnostic Development Initiative’s technical advisory group noted, “The world needs more and more private sector innovation to combat this pandemic. Amazon’s commitments and participation are very welcome, particularly since the lack of significant next-generation diagnostic tools remains a large gap in most health systems. A platform to link research, digital capabilities, and new products to customers globally is an exciting venture.” AWS is launching the AWS Diagnostic Development Initiative with participation from 35 global research institutions, startups, and businesses focused on tackling this challenge. aws launches global initiative to spur covid 19 diagnostics research testingTech players ramp up work-from-home initiatives aws launches global initiative to spur covid 19 diagnostics research testingProtecting the network in the midst of 5G Can Bach Hoa Xanh turn the losing tides for Mobile World? As Mobile World (MWG) has been on edge due to the temporary closure of Dien May Xanh and thegioididong stores (its two main businesses), it is pinning its hopes on food store chain Bach Hoa Xanh to keep it afloat during the health crisis. The sales growth of MWG in the second quarter of this year will be negatively impacted and the gloomy outlook may last until the COVID-19 is reined in in Vietnam, especially in Hanoi and Ho Chi Minh City where about 20 per cent of its stores across the country are. Along with aviation, retail is also heavily affected by the pandemic. MWG and PNJ recorded big drops of 50 and 47 per cent, respectively. In recent sessions, MWG has been impacted by the temporary closure of thegioididong store chain specialised in mobile devices and Dien May Xanhchain specialised in home-appliance products. According to Rong Viet Securities, the performance of thegioididong has been seriously impacted, which aligns with global trends. Data published by Strategy Analytics showed that smartphone sales in February reached $61.8 million, down 38 per cent on-year. COVID-19 has interrupted the supply chain of mobile phones globally since January. Staff member of Dien May Xanh in Danang tests positive for COVID-19MWG predicts Bach Hoa Xanh may break even only next yearMWG stock on the rise, FRT trending down In Vietnam, while phone manufacturers in China are restarting operations and their stockpiles are enough to last for at least the next six months, prospects are still gloomy. The reason behind this is the prolonged plunge in demand for smartphones. People are staying away from crowded place like thegioididong stores to avoid the virus. Furthermore, the local smartphone market has reached the saturation point and consumption has been slowing down for years now. Regarding Dien May Xanh, MWG is also looking at lost sales of TV sets because the European Championship has been pushed back to 2021. On the other hand, Bach Hoa Xanhmay be the beacon shining in the dark for MWG. In contrast with thegioididong and Dien May Xanh, the Bach Hoa Xanhchain specialises in food and groceries and is allowed to stay open during the health crisis. However, since the epidemic broke out, the stores have seen little change the number of customers. Currently, 60 per cent of Bach Hoa Xanhstores are located outside of Ho Chi Minh City, therefore, Rong Viet Securities forecast sales growth to remain stable but not strong enough to outweigh the losses felt across other business lines. AboitizPower terminates wind farm purchase deal in Vietnam Aboitiz Power Corporation from the Philippines has announced a decision to terminate its planned acquisition of Vietnam’s Mekong Wind due to a condition precedent being unmet by the agreed longstop date. The power firm said that it decided to exercise its right to terminate the transaction that involves a 100 per cent acquisition by subsidiary Aboitiz Power International Pte., Ltd. of Mekong Wind Pte., Ltd. from Armstrong Southeast Asia Clean Energy Fund Pte., Ltd. (AAM), according to newswire Businessmirror. According to AboitizPower president Emmanuel Rubio, the corporation cannot disclose details as the parties are still bound by the confidentiality agreement. The corporation is still in discussions with AAM to revisit the acquisition at a future date. Previously, AboitizPower, through its wholly-owned subsidiary AboitizPower International, announced that it has signed a share purchase agreement for the acquisition of 100 per cent ownership of Mekong Wind from Armstrong Southeast Asia Clean Energy Fund Pte., Ltd. The acquisition is subject to customary closing conditions and was expected to complete in the fourth quarter of 2019. The acquisition captures all legal and economic interest in Mekong Wind, which in turn holds a 99.9 per cent direct interest in Dam Nai Wind Power JSC. Dam Nai Wind owns and operates the 39.4MW onshore wind power facility in the central province of Ninh Thuan, which boasts some of the most attractive sites for wind energy in the country. The total purchase consideration payable for the acquisition of Mekong Wind is approximately $46 million, which may be subject to certain closing adjustments. Dam Nai Wind is one of the first wind power projects in Vietnam to have been successfully brought online with commercial operations having commenced in late 2017. The transaction builds on AboitizPower’s investments in the rapid growth of renewable energy and marks its entry into one of Asia’s most attractive markets. Vietnam, with its robust economic growth backed by strong government support, creates an attractive environment for AboitizPower to increase its commitment and contribution to energy supply security in Southeast Asia through its wide experience and expertise in the power sector. “This transaction is a milestone for AboitizPower and sets the tone for our expansion in the international market. We have announced our intentions to go international some time back and we have been prudent in looking for the right opportunity that will bring the best value for the company and our shareholders. This is such a transaction,” AboitizPower president and chief executive officer Erramon I. Aboitiz said at that time. Sabeco's prospects darkened by Decree 100 and COVID-19 outbreak The prospects of Sabeco have deteriorated on account of Decree No.100/2019/ND-CP and the COVID-19 outbreak which are expected to negatively affect beer and alcohol consumption in Vietnam. In 2019, Sabeco posted steep growth by generating a total net revenue of VND37.89 trillion ($1.65 billion) and after-tax profit and minority interests of VND5.1 trillion ($221.74 million), up 5.4 and 21 per cent on-year, respectively, according to a report by Bao Viet Securities (BVSC). However, BVSC believes that 2020 will be a challenging year for Sabeco. The two main sources of headwinds this year will be Decree 100/2019/ND-CP and the COVID-19 outbreak that slow down beer and alcohol consumption in Vietnam. BVSC has drawn up many scenarios for business results in 2020, but revenue will likely decrease. In a positive scenario of a 5 per cent increase in beer consumption, Sabeco can achieve a revenue of VND40 trillion ($1.74 billion) and profit of VND5.7 trillion ($247.83 million). In the worst-case scenario of a 20 per cent fall in beer consumption, Sabeco may post revenue of VND31 trillion ($1.35 billion) and profit of VND4 trillion ($173.9 million), which is the lowest growth in the past three years. Another challenge for the beer maker is the lack of materials, particularly barley and hops, which are mainly imported from Europe and are two indispensable ingredients for the brewing process. However, the imports of these ingredients will likely be slow as Europe closed its borders to curb the COVID-19 pandemic. Ta Hoang Linh, head of the Ministry and Trade’s Departments of Domestic Market, European-American Market, said, “This EU disease control regulation may not affect the import and export of goods between Vietnam and the EU in the short-term because it only applies to individual travellers and basic cargo transportation and trading activities are not restricted. However, in some economic aspects, epidemic control measures will in fact slow down the movement of goods through export, transportation, customs clearance, and storage, causing disruptions or delaying economic, trade and service flows.” The company’s representative refused to comment on the scenarios for its business results in 2020 as well as the potential lack of ingredients for brewing beer. Sabeco shares ended at VND233,200 ($10.14) apiece on December 26, 2019. Last Friday, Sabeco shares were traded at around VND128,000 ($5.57) with a market cap of VND79 trillion ($3.43 billion). In December 2017, ThaiBev acquired 343.62 million shares, equivalent to 53.59 per cent of Sabeco at the unit price of VND320,000 (nearly $14). ThaiBev spent $4.78 billion on this deal. However, only two years after, the Thai company saw nearly half of its investment in Sabeco eroded amidst the COVID-19 pandemic. With the COVID-19 virus outbreak growing in scale keeps consumers away from crowded places like restaurants, negatively affecting alcohol consumption. Note that the main trading channel for Vietnam's beer industry is the on-trade channel that accounts for 70 per cent of total consumption (Euromonitor). Also, people mainly stock up on essential products rather than beer during the crisis. Therefore, Sabeco should brace for negative growth in 2020. However, even after the COVID-19 pandemic subsides, Sabeco will continue to face difficulties. In a report released in 2016, FPT Securities warned that Sabeco shares were not attractive in the long term as liver cancer is the most common cancer in Vietnam. The increase in the incidence of liver cancer can be attributable to uncontrollable beer consumption in Vietnam. The WHO predicts that there will be 850,000 cases of lung cancer in Vietnam by 2030. This figure will increase if the government does not take measures to control the situation. Decree 100 stipulating heavy fines for drinking is a bold move by the government in response to the warning of the WHO. Sabeco is upgrading its production capacity at Saigon-Quang Ngai factory, Saigon-Cu Chi factory and Saigon-Soc Trang factory. According to sources familiar with the matter, Sabeco will increase its production capacity from 1.66 billion litres per year to 2 billion litres per year. In addition to enlarging brewing capacity, Sabeco also holds more than 60 per cent of the mainstream beer segment. However, the brewery maker might lose their competitive edge with the government taking measures to limit beer consumption and consumers switch to healthier beverage choices. To cope with this problem, Sabeco has developed new product lines targeting the mid-end segment. The company has also diversified its distribution channels to replace the on-trade channel as restaurants and pubs are suffering from the COVID-19 pandemic. As of present, Sabeco has a network of 100,000 points-of-sale nationwide. As many restaurants and pubs are shut due to the COVID-19 crisis, Sabeco now focuses its distribution efforts on convenience stores and traditional grocery stores. HSX puts YEG stock under alert The impacts of the failed co-operation with YouTube are still haunting Yeah1 Group as the Ho Chi Minh City Stock Exchange has put its stock on alert. The Ho Chi Minh City Stock Exchange (HSX) on March 31 decided to put Yeah1 Group's stock (YEG) on alert from April 8 because of its tremendous losses last year. As soon as YouTube announced stopping work with the group in March 2019, 35 per cent of the shares' value evaporated immediately. As of now, YEG is around VND49,600 ($2.15), 80 per cent lower than its initial share price. The prolonged plunge in its stock has worsened Yeah1’s performance. In 2019, the local media firm reported VND385 billion ($16.74 million) in net losses and VND1.449 trillion ($63 million) in revenue. It also recorded VND435 billion ($18.9 million) of revenue in the fourth quarter of 2019, down 32 per cent on-year. Notably, the spike in management costs and a $3.6 million provision resulted in losses of nearly VND158 billion ($6.87 million) in the quarter. Regarding the breakdown with YouTube, Yeah1’s chairman Nguyen Anh Nhuong Tong said at the shareholders' meeting last year that it is a textbook lesson of the adage “Don’t build a house on someone else's land”. Due to the collapse, the company only set a 19 per cent revenue growth target for 2019, a marked reduction against the previous years’ 60 per cent. “In my 41 years of life I have never seen so many upheavals,” Tong said. “It will take at least six months to overcome the obstacles.” In the middle of March, YouTube accused the multi-channel network SpringMe Pte., Ltd., in which Yeah1 owns 17 per cent of the shares, that some of its channels violated YouTube’s policies. This led to the global video platform stopping work with all other Yeah1’s firms running YouTube AdSense like Yeah1 Pte., Ltd., and ScaleLab LLC. “Yeah1 upload about 400 hours of video content a day, which equals all other Vietnamese channels combined. Fast growth brings huge risks – and the problem with YouTube is a valuable lesson for us,” Tong added. Vinamilk lowering 2020 revenue expectations The Board of Management at Vinamilk – the largest dairy firm in Vietnam – is readjusting its expectations for revenue growth for 2020. The dairy industry appears increasingly susceptible to the booms and busts of the economy. Accordingly, the Board of Management (BoM) at Vinamilk has lowered the company's consolidated revenue growth rate target to 8 per cent on-year in 2020 – a slight reduction from the 10 per cent of 2019. The revision was sparked by the BoM's increasing cautiousness in the domestic market as higher unemployment rates can impede demand for milk, according to KIS Securities. Besides, the longer-than-expected school break also made things worse in Vinamilk’s school milk earnings. Vinamilk targets to maintain its operating expenses at around 25-26 per cent of the total revenue. To combat the slowdown, Vinamilk is adopting marketing strategies focusing on healthy products beneficial to the human body, such as yoghurt and milk powder. Vietnam’s dairy product consumption recovered strongly, rising 7 per cent on-year in the four biggest cities and 15.5 per cent on-year in rural areas, according to Kantar World Panel. VNDIRECT noted the recovery begun after domestic dairy producers started to provide a variety of products as well as adopt effective marketing strategies. Vinamilk, as the market leader, launched 19 products, the most remarkable ones being Organic Gold, a brand for organic infant formula and drinking milk, and the premium Yoko Gold infant formula, with all materials imported from Japan. As a result, last year’s domestic revenue increased by 6.3 per cent on-year (versus 2.7 per cent on-year in 2018) to VND47.555 billion ($2.1 million), accounting for 84.4 per cent of the total revenue. On the other hand, Vinamilk’s exports have accelerated as traditional markets recovered, such as the encouraging performance in the Middle Eastern markets. With the recovery of this market, Vinamilk’s exports bounced back 14.8 per cent on-year in 2019, rising to VND5.175 billion ($225,000) after a weak growth of 2.3 per cent on-year in 2018. Export turnover contributed 9.2 per cent to 2019 net revenue. It is noted that the checking process for China-bound official export permit is underway due to the large size of Vinamilk’s factories and milk farm system. Last year, Vinamilk snapped up a majority of GTNFoods – the parent firm of Moc Chau Milk, Vinatea, Ladofoods. The strategic tie-up deal is expected to boost Vinamilk’s revenue as well as beef up its market presence. However, the move did not have time to make an impact on Vinamilk’s profit and loss in the last quarter of 2019. Furthermore, the increased rate of corporate income tax (CIT) has curbed Vinamilk’s net profit growth. Notably, last year’s tax rate stood at 17.5 per cent, which was higher than that of 2018 since there was no longer tax incentive period. Such a tax policy created a strong pressure on the firm’s earnings: after-tax profit in 2019 gained slightly (3.4 per cent) to reach VND10.554 billion ($458,870). Yeah1 clears losses and raises capital for a new game in 2020 Pouring investment in smaller-scale firms while being backed by soft drink giant Tan Hiep Phat is expected to help Yeah1 to recover from its tremendous losses last year. Yeah1 Group Corporation (HSX: YEG) has just published the documents related to its coming shareholders' meeting on April 9. After the vicissitudes of 2019, Yeah1 seems to anchor great hope in 2020, reflected by the 11 vital proposals it is planning to put to investors for approval. Those include moving the new headquarters to 191 Nam Ky Khoi Nghia, requesting approval for several transactions with large shareholders and distributing part or whole of the 1.77 million treasury stocks worth VND141.7 billion ($6.16 million) purchased in last July. Regarding its business plans, Yeah1 targets VND1.8 trillion ($78.26 million) in revenue, up 24 per cent on-year. The firm also expects its pre-tax profit to hit VND155 billion ($6.74 million), and the dividend rate will be 10 per cent. Notably, another proposal would be to use the proceeds of a stock issuance from 2018 to double the company's charter capital by issuing one stock after each already in circulation. The issuance in question was conducted in August 2018, when the group issued 3.91 million stocks at VND300,000 ($13) for chairman Nguyen Anh Nhuong Tong. The proposed issuance of new stock this year would cost VND1.1 trillion ($47.83 million) of these proceeds. At the same time, Yeah1 Group is also collecting suggestions about using the proceeds of the issuance to clear the VND307.7 billion ($13.38 million) accumulated losses. In case these two proposals are approved, there will be VND512 billion ($22.26 million) left from the proceeds of the issuance which will be used to eliminate its losses from last year and help rebalance its books, creating a firm base for 2020. After the breakdown with YouTube last year, Yeah1 has been reaching for new plans, aiming to lessen its dependence on other tech giants. Specifically, the local media firm has been making increasing investments in small-scale platforms like Media One, Kolorlife, and Giai tri 100D. It also entered into co-operation with South Korea-based The E&M to develop a platform for celebrities, and with People & Story to launch a comic-book application. Early this year, Yeah1 continued to partner up with Cambodia-based YAK Capital PLC to open a platform specialised in beauty. Accordingly, the projects will take advantage of Yeah1's current ecosystem to optimise its media impact. However, it will take time for these projects to bear fruits for Yeah1, and the firm has recognised the need to jump into a larger game to assert itself and regain the trust of its investors – which it aims to do via the recent partnership with beverage manufacturer Tan Hiep Phat. Yeah1 is researching the new application called Mega1 to collect promotions for customers. The new app is expected to boost the Tan Hiep Phat’s sales increase to 50 per cent and reach 150 million interactions. While the new campaign will bring economic gains for the two sides, but Yeah1’s targets go beyond that. At the signing ceremony with the soft drink maker on March 12, chairman Nguyen Anh Nhuong Tong said that Yeah1 is planning to convert dozens of millions of its users from YouTube and Facebook to Mega1. Reaching success with Tan Hiep Phat will be a launchpad for Yeah1. Lotte E&C completes pre-feasibility study for Yen Vien-Lao Cai railway route Three years after receiving the approval from the Ministry of Transport, Lotte Engineering and Construction Co., Ltd. (Lotte E&C), a member of South Korean giant Lotte Group, completed the pre-feasibility study for the second phase of the project to upgrade the Yen Vien-Lao Cai railway route. This report is a demonstration of Lotte E&C's determination to develop the Yen Vien-Lao Cai railway route. This is because the Ministry of Transport warned the investor in a document that the route is not on the list of public-private partnership (PPP) projects it calls for investment, thus the investors have to build the report on their own and there are expected to be many potential investors to compete for the project. Lotte E&C sees massive potential in this railway route, which is a part of the Greater Mekong Subregion East-West Economic Corridor connecting Kunming (China) and Haiphong (Vietnam). This area plays an important role in cross-border trade. In the pre-feasibility study, Lotte E&C proposed taking charge of the development of component project No.1, including building a new station and upgrading related infrastructure. The investor proposed the construction to be implemented under the PPP model with a build-lease-transfer (BLT) contract. In addition, state-owned railway giant Vietnam Railways would be responsible for the management and exploitation of railway infrastructure and the operation of the entire national railway network. Furthermore, in order to ensure feasibility, the investor required the ministry to develop component project No.2 simultaneously, which includes the Lao Cai-Ha Khau connecting railway route. Lotte E&C was a contractor taking part in the first phase of the project, which cost $166 million and was completed in late April 2015. In South Korea, the company was involved in several railway projects such as the Gyeongbu high-speed railway, the Cheongnyangni-Deokso double-decker train railroad, and the railroad linking Busan centre to the city’s port. Along with this project, Lotte E&C is also interested in the North-South Expressway, the North-South High-Speed Railway, and Long Thanh International Airport. Duc Giang Chemical to develop $521 million project in Thanh Hoa Duc Giang Chemical Group JSC, the producer of Duc Giang washing powder, plans to develop the Duc Giang-Nghi Son chemical complex in Tinh Gia district, Thanh Hoa province with the total investment capital of VND12 trillion ($521.74 million). This complex is the largest investment of Duc Giang Chemical so far. To begin the project, the group will rent 80 hectares of land for 50 years sometime between April and September. The construction will be divided into three phases. The first phase has a total investment capital of VND2 trillion ($86.96 million), VND600 billion ($26.1 million) of which comes from company equity and the remaining VND1.4 trillion ($60.87 million) from loans. The first phase is expected to start operation in June 2022 and will manufacture sodium hydroxide (98 per cent), calcium hypochlorite (70 per cent), and Chloramine B, among others. Having a total investment cost of VND7 trillion ($304.35 million), the construction of the second phase will last from 2022 to 2024 and will include a facility specialising in manufacturing PVC plastic and soda with the capacity of 150,000 tonnes of PVC and 100,000 tonnes of caustic soda per year. The third facility, which is worth VND3 trillion ($130.43 million), is expected to start operation in 2026 after two years of construction and will operate with the capacity of 400,000 tonnes of sodium carbonate a year. In addition, Duc Giang Chemical plans to spend VND210 billion ($9.13 million) on an apatite ore mine in Lao Cai province. The investor expects to exploit this mine for six years with the total revenue of VND900 billion ($39.13 million) and profit of VND300 billion ($13 million). The project is expected to come into operation in March 2021. Duc Giang Chemical is a state-owned enterprise established in 1963 and specialises in washing powder production. The company was equitised in 2004. It filed for listing on the Hanoi Stock Exchange (HNX) in early November 2019 with more than 129 million shares. It plans to switch from HNX to the Ho Chi Minh City Stock Exchange (HSX) this year. This year, the firm targets to acquire VND600 billion ($26.1 million) in after-tax profit, up 6 per cent on-year. In last December, Vietnam National Chemical Group (Vinachem) registered to auction all 11.45 million of its shares in the firm, equivalent to 8.85 per cent of its capital. The shares was offered at a starting price of VND49,100 ($2.13), nearly double the current market price of VND27,000 ($1.17). Vietnam attracts $4 billion FDI capital despite COVID-19 crisis Although the COVID-19 crisis is deepening across the globe, Vietnam managed to woo $4 billion in FDI capital in the first quarter. As of March 20, 2020, the total newly and additionally registered capital and capital contributed and shares purchased by foreign investors was $8.55 billion, equaling 79 per cent of the same period in 2019, according to a report by the Foreign Investment Agency (FIA) under the Ministry of Planning and Investment. The disbursed capital of foreign direct investment (FDI) projects was estimated at $3.85 billion, equaling 93 per cent of the corresponding period last year. In the first quarter, the whole country granted investment certificates to 758 new foreign-invested projects, including 100 per cent foreign-invested and joint-venture projects between local and foreign entities with a total newly registered capital of $5.5 billion, up 45 per cent against the same period in 2019. The increase in registered capital is attributable to the Singapore-financed $4 billion Bac Lieu liquefied natural gas-fired thermal power plant, which received an investment licence in January. In addition, there were 236 projects registered to adjust capital with a total additionally registered capital of $1.07 billion, equaling 82 per cent of the same period in 2019. Also in the first quarter of 2020, the whole country saw 2.523 instances of capital contribution and share purchases by foreign investors with a total value of capital contributions reaching $2 billion, up 53 per cent against the same period last year and capturing nearly 34 per cent of the total registered capital. As of March 20, 2020, Vietnam had nearly 32,000 valid projects with a total registered capital of $370 billion. The accumulated disbursed capital of FDI projects was estimated at $215.6 billion, equalling 58 per cent of the total valid registered capital. By investment field, foreign investors have invested in 18 industries, in which production and distribution of electricity accounted for the highest proportion, followed by the processing and manufacturing sector as well as the wholesale and retail sector. VNN