Revenue rose 10.8 percent year-on-year to VND23.13 trillion ($990.68 million), which puts the jewelry firm’s net profit margin at around 0.3 percent, according to the firm's (SJC) newly released audited financial statements for 2019.

The company has set revenue target of VND25.7 trillion ($1.11 billion) in 2020.

SJC is Vietnam’s national gold brand and the sole producer of gold bullion in the country, a status assigned by the State Bank of Vietnam (SBV) in mid-2012. Since then, the company has held around 90 percent of Vietnam’s gold bullion market.  

The bulk of the increase in profitability this year came from the reversion of SJC’s science and technology fund, which resulted in VND12.8 billion ($550,000) being recorded as this year’s pre-tax profits for tax purposes.

Under current regulations, a company may set aside up to 10 percent of its taxable income each year into a science and technology fund, used for the sole purpose of research and development. Income set aside for this fund is exempt from tax.

However, if the enterprise does not use up this fund within five years, any excess will revert and be treated as taxable profit.

Established in 1988, SJC is a wholly state-owned enterprise under the People's Committee of Ho Chi Minh City. The company primarily produces and trades gold bars and jewelry, but also has investments in real estate, finance, and services.

The company’s profit making was at its highest between 2011 and 2013, when SJC made around VND200-300 billion ($8.57-12.85 million) in post-tax profits each year. This fell to less than VND100 billion ($4.28 million) after the SBV tightened regulations on gold trading, alongside a cooling of Vietnam’s domestic gold market, the company statement said.

SJC is one of 27 state-owned enterprises awaiting equitization, following which the state’s stake will be less than 50 percent. The equitization is set to take place this year under a plan set out by the Prime Minister.