Vietnamese garment firms post solid Q3 results

Two of Vietnam's biggest listed garment companies have reported positive results in the first nine months of this year, foreshadowing perhaps a bright future for the country's textile industry under the potential Trans Pacific Partnership (TPP) trade agreement.

On October 12, TNG Investment and Trading Co (TNG) reported year-on-year increases of 24 percent in both revenue and net profit in the third quarter which were 627 billion VND (28 million USD) and 25 billion VND (1.1 million USD), respectively.

Through the first nine months of the year, TNG posted a combined revenue of 1.42 trillion VND (63.4 million USD), up 38 percent over the same period of last year, while its net profit reached almost 59 billion VND (2.6 million USD), up 47 percent year-on-year.

TNG share price has also increased almost 11 percent in the last month, ending up 1.1 percent to 26,400 VND (1.18 USD) a share on October 13.

Since garment and textile sector is expected to be one of the industries which will benefit the most from TPP, garment firms are proactively putting in place measures to capitalise on this opportunity.

Thanh Cong Trade Textile Garment Investment Co (TCM) is investing in a weaving and dying garment factory with a total investment of 30 million USD during the 2014-17 period. Meanwhile, TNG has put into operation another cotton production line, worth more than 40 billion VND (1.8 million USD) to raise capacity 300 percent.

TCM estimated its sales reached 825 billion VND (36.8 million USD), up 32 percent from the same period a year earlier, while profit is estimated at 80 billion VND (3.6 million USD), up 74 percent from a year ago.

The company's nine-month net sales rose 12 percent to 2.16 trillion VND (96.4 million USD), equivalent to 78 percent of the company's target for the whole year.

Of total eight listed garment firms, TCM is the largest one with a market value of 1.84 trillion VND (82 million USD) as of October 13. It was also the most profitable firm in the first half of the year with sales and profit accounting for 33 percent and 39 percent, respectively, of the entire sector.

TCM price rose 1.4 percent on October 13 after the news to 37,500 VND (1.67 USD) a share. The share price has climbed over 10 percent in the past month, fueled by expectations of the success of TPP negotiations.

According to a report by brokerage Bao Viet Securities Co's this month, TCM's total revenue could reach over 2.76 trillion VND (123.2 million USD) and after-tax profit is projected at 171 billion VND (7.6 million USD) by year-end, up 7.5 percent and 6.2 percent year-on-year, respectively.

Vietnam's textile and garment exports reached 17.1 billion USD in the first nine months of this year, of which exports to the TPP's 12 member countries accounted for around 66 percent, according to the Ministry of Industry and Trade.

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the US and Vietnam are members of the TPP, and each country must ratify the pact for it to take effect.

According to the World Bank's latest report, Vietnam's garment and textile sector could grow 41 percent, equivalent to an increase of 11.5 billion USD, by 2020, if TPP takes effect.-VNA