During Vincom Retail's AGM on April 23, the company reported achieving its highest revenue since its foundation in 2023, reaching approximately $407 million — a 33 per cent increase from the previous year. The leading Vietnamese retailer also saw a significant rise in after-tax profits, which jumped 59 per cent to $183 million. Furthermore, the firm's gross profit margin expanded from 51.8 per cent to 54.7 per cent, solidifying its position as the most operationally efficient player in the market.

This year, Vincom Retail is poised to enhance its footprint across Vietnam.

"In 2024, we plan to open six new shopping centres, which include two flagship Vincom Mega Malls and four Vincom Plazas, thereby adding around 171,000 square metres of retail space," disclosed Pham Thi Ngoc Ha, CFO of Vincom Retail.

This expansion is expected to bring the company’s total to 89 centres across 48 cities and provinces by year-end.

For 2024, the company forecasts a net revenue of around $395 million and an after-tax profit nearing $184 million.

For the first quarter of 2024, Vincom Retail is targeting revenue of around $93.8 million.

"Leasing operations are projected to generate roughly 80 per cent of this total, with real estate sales contributing 10-12 per cent, and the rest coming from diverse revenue streams," Ha elaborated.

She highlighted a 16 per cent revenue growth over the same period last year, primarily driven by the delivery of several shophouses in Dong Hao of the central province of Quang Tri.

After-tax profits for the quarter are expected to top $45 million, marking a 6 per cent increase from the previous year. This performance constitutes 24-25 per cent of the company's full-year financial target.

"Vincom Retail plans to reinvest all retained earnings to bolster our operations," Ha added. "We are also committed to servicing our debts and strategically expanding our project portfolio, which spans over 800,000 square metres and requires an investment exceeding $417 million."

Board changes after M&A deal and brand loyalty

In March, Vingroup said it would reduce its ownership in Vincom Retail.

Accordingly, the acquisition of SDI shares - a company indirectly holding a 41.5 per cent stake in Vincom Retail - from Vingroup involved four new entities.

These include Thien Phuc Business and Development Investment Company, which acquired a 16 per cent stake in SDI, Falcon Investment and Development Company takinging 12.5 per cent, Emerald Business and Development Investment Company with 10.5 per cent, and NP Business Investment Joint Stock Company securing a 16 per cent share.

Accordingly, Nguyen Hoai Nam, currently the CEO of Berjaya Vietnam, a subsidiary of Malaysian conglomerate Berjaya Corporation Berhad, joins Vincom Retail's board as a new member.

Nam, 54, graduated from University of Southern California. He was previously CEO of 3C Corporation, director of finances at construction and architectural firm TTT Corporation, and CEO of Viet Au Investment.

In 2006 he became the CEO of Berjaya Vietnam, which owns properties such as Sheraton Hanoi, Long Beach Phu Quoc resort, and Hanoi City Garden residential complex.

Regarding speculation about a potential rebranding, Mai Hoa, vice chairwoman of the board, remarked, “The Vincom name has become synonymous with retail excellence over the past 20 years, especially among residents of Hanoi. It represents not just a name but a legacy of commitment and growth that has culminated in Vietnam's largest retail system.” She added that any decision regarding the retention of 'VIN' in the company name would be deliberated by the board at a later date.

Reflecting on the shifting retail landscape, Hien emphasised the dependency of the retail market recovery on broader economic factors and consumer expenditure.

"Despite a downturn in tenant revenues across our centres, we are realigning our workforce and strategising tenancy to enhance fill rates," the CEO stated. This proactive approach aims to uphold high occupancy rates and maintain momentum across the company's expansive retail portfolio.

On the other hand, Hien believed that the online sales model has proven to be a strong support for mass and small-scale retailers. However, the costs for maintaining an online presence can be substantial, with some vendors incurring fees that constitute up to 35 per cent of their sales revenue.

In addition, cultural preferences significantly influence consumer behaviour in Vietnam. "The tactile experience of shopping, coupled with the convenience of purchasing items within one's own residential complex or enjoying family weekends in shopping centres remains highly valued among Vietnamese consumers," observed Hien.

A first-quarter 2024 study by CRBE supports this, showing that retailers are continuing to expand their physical store footprints.

Strategic diversification through tailored business models

According to the board, Vincom Retail strategically adopted four distinct retail formats upon entering the market, including three primary models: Centre, Mall, and Plaza. Each is designed to meet the unique needs of different market segments and locales.

"No single model perfectly fits all market conditions or customer groups," explained Hien.

The Centre model targets inner-city customers who have limited space but demand distinctive products. The Mall model is ideal for suburban areas near major cities like Hanoi and Ho Chi Minh City, designed for large spaces ranging from 60,000sq.m to 100,000sq.m and attracting a high volume of customers. The Plaza model serves as a regional shopping hub in municipal and provincial areas.

"Each of our models is uniquely positioned to precisely serve the consumer demographics of its respective area," Hoa commented.

Regarding the expertise brought by the new shareholders, Hoa added, "Although they lack experience in shopping centre management, our new shareholders have extensive backgrounds in retail. They have been part of successful retail ventures, which is vital for the success of our centres. We are confident that they will contribute valuable retail insights and managerial skills."