FDI giants report surging revenues in Vietnam
FDI giants report surging revenues in Vietnam
Several foreign direct investment (FDI) giants, including Japanese retailer AEON Mall, South Korean tech company Samsung, and Taiwan’s Formosa Group, have reported strong revenue and profit growth rates in Vietnam.
AEON, a Japanese retailer, has seen rising renevue in its Vietnam business. Photo: AEON |
AEON Mall's semi-annual financial report, covering March to August, revealed that its Vietnam operations generated over 8.19 billion yen (US$54.79 million) in revenue, a 14.5 percent year-on-year increase.
After expenses, AEON Vietnam reported a profit of over 2.4 billion yen ($16.1 million), up 21.2 percent.
Since opening its first store in Vietnam, AEON Tan Phu in Ho Chi Minh City, in 2014, the company has expanded its network of shopping malls and stores in six provinces, employing more than 4,000 people and earning over VND2.2 billion ($88,000) daily from their operations.
The Vietnamese market even outpaced its home market of Japan, which saw a 13.8 percent profit rise during the same period, whereas other foreign markets like Cambodia and China reported declines.
Despite these positive results, AEON posted a loss of more than 1.1 billion yen ($7.36 million) due to the cancelation of a mall project in Hanoi’s Hoang Mai District.
Samsung Vietnam, meanwhile, announced positive results in the first half of 2024.
According to financial reports, Samsung Thai Nguyen in northern Vietnam generated the highest revenue and profit among the company’s operations in the country, with over $13.8 billion in turnover and more than $1.1 billion in profits, up 20.5 percent and 30.2 percent year on year, respectively.
Samsung Thai Nguyen is Samsung’s second-largest global revenue generator, trailing only its U.S. plant.
In Bac Ninh Province, northern Vietnam, Samsung Electronics Vietnam reported $8.1 billion in revenue and $680 million in profits, while Samsung Display Vietnam achieved $6.7 billion in revenue and nearly $280 million in profits.
Samsung Electronics HCMC CE Complex, located in Thu Duc District, Ho Chi Minh City, reported nearly $2.6 billion in revenue and over $84 million in profits.
Meanwhile, other subsidiaries like Samsung Electro Mechanics and Samsung SDI have not yet disclosed their financial results for the first half of 2024.
Samsung remains Vietnam’s largest FDI investor, with over $20 billion invested in six factories and a $220 million global research and development center that opened in Hanoi in late 2022.
On the other hand, Taiwan’s Formosa Plastics Group reported underwhelming results for its steel manufacturing arm in the north-central region, Formosa Ha Tinh, in 2023.
Despite significant investment, the company saw revenues of about NT$124.5 billion ($3.9 billion), a 3.2-percent decrease from 2022, and a loss of approximately NT$20.1 billion ($610 million).
Formosa attributed these losses to China's prolonged real estate market slump and reduced demand for steel, leading to substantial price cuts in Southeast Asia to maintain market share.
In addition to manufacturing and retail, Vietnam continues to attract foreign investment from the banking sector.
HSBC Vietnam, the first wholly foreign-owned bank in the country, reported record profits in 2023.
However, during the first half of 2024, its net interest income fell to VND3.179 trillion ($127.15 million), down 20 percent year on year, while its pre-tax profit dropped 32 percent to VND 2.237 trillion ($89.47 million).
Despite this, HSBC’s profits remain strong, considering its long-term business performance in Vietnam.
In a recent report, the bank highlighted Vietnam's return to strong growth in ASEAN after a challenging 2023 and early 2024.
The country’s economic growth rate reached 7.4 percent in the third quarter of this year, surpassing the expectations of HSBC and other organizations.
FDI continues to be a key driver of this growth, with Vietnam remaining an attractive destination for foreign capital due to its robust economic fundamentals.
