As efficient as lighting manufacturer Rang Dong

Hanoi-based Rang Dong Light Source & Vacuum Flask JSC is moving towards a 4.0 product and service ecosystem with lighting equipment at its core after more than 60 years in the industry.

In the 1960s, Rang Dong vacuum flasks were a familiar item in every Vietnamese home, especially in the North, to store warm water for use throughout the day. They were also considered a valuable wedding gift.

Rang Dong Light Source & Vacuum Flask JSC built one of the first 13 factories in Vietnam, laying the foundation for the country’s lighting industry during the economic recovery period in the early 1960s.

From its first products that included round light bulbs and vacuum flasks, Rang Dong has continuously improved and renovated its lines to meet the continuously changing needs and tastes of consumers.

For vacuum flasks, the business has launched more convenient products such as hand-held vacuum flasks, tea thermos flasks, water bottles, thermos, and electric kettles. For lighting equipment, it has gradually converted from fluorescent and compact light bulbs to energy-saving LED lights, eye-caring desk lamps, LED headlights, solar lights, and electrical equipment for smart homes.

Starting from 2016, Rang Dong has entered a new phase, transforming from a technology company to a high-tech company. It has provided solutions based on core technologies in lighting and IoT (internet of things) to create smart homes, smart cities, high-tech agriculture, and precision agriculture.

In 2020, the company carried out digital transformation with a strategy for the 2020-2025 period, with a vision towards 2030, and the establishment of a digital technology research and development center. Rang Dong aims to become a leading high-tech enterprise in the lighting market in Vietnam by 2025, providing a 4.0 product and service ecosystem.

Rang Dong reports show that its production capacity has reached 100 million LED products, 5 million desk lamps and lighting equipment products, and 32 million vacuum flasks and flask products each year. Especially, the company can meet large orders on time, with premium quality and bespoke products.

Rang Dong’s distribution system now covers 63 provinces and cities with 23,000 sales points across the country. After more than 20 years of reaching out to the world, the company has shipped products to 47 countries and territories, with export turnover making up 8% of its total revenue in 2022.

Small capital but great efficiency

Rang Dong Light Source & Vacuum Flask JSC listed on the Ho Chi Minh Stock Exchange (HoSE) as RAL in 2006 with charter capital of nearly VND80 billion ($3.3 million). The figure now stands at VND235 billion ($9.68 million), three times higher after 17 years.

The enterprise increased capital through issuing Employee Stock Ownership Plan (ESOP) shares and offering shares at a ratio of 12:11 at a price of VND93,000 ($3.83) per share to shareholders at the end of 2021 and early 2022. In general, Rang Dong's capital is still quite small among the hundreds of trillion-dong firms listed on the stock market (VND1 trillion = $41.19 million).

The owners of Rang Dong are also its workers, with the company's trade union holding 40.5% of the equity. Rang Dong said that after equitization, 96% of employees were entitled to buying shares, accounting for 43% of the equity.

The person with the most contributions and power at the company is 80-year-old CEO Nguyen Doan Thang. He has been with Rang Dong for almost his entire life, from the age of 21 as an engineer and design team leader. He served as board chairman and CEO for a long time, but in 2017 he resigned from the position of chairman according to regulations.

Despite its small charter capital, Rang Dong's assets by the end of September 2023 hit up to VND7,574 billion ($312 million), focusing on receivables and inventory. Its equity was VND2,780 billion ($114.52 million), with a share surplus of VND1,077 billion, mainly from the capital increase at the end of 2021. The firm has almost no long-term debt but short-term debt of VND3,168 billion ($130.5 million).

In 2012-2022, Rang Dong's revenue increased continuously from VND2,054 billion to VND6,909 billion ($284.6 million), with a growth rate of 8-10% from 2015-2019 and 15-20% from 2019 to 2022. It expects the rate to reach 25-30% in the 2023-2025 period.

Its net profit rose from VND74 billion in 2012 to VND214 billion ($8.8 million) in 2017 but stagnated in 2018-2019. However, in 2020, the business established a new profit level of VND300-500 billion. EPS (profit per share) during this period also reached over VND25,000 ($1.03).

In the first nine months of 2023, despite economic difficulties, Rang Dong still recorded a 20% increase in revenue to VND4,942 billion ($203.58 million), and a 41% rise in net profit to VND390 billion ($16.06 million). Its EPS reached VND16,552 ($0.68), up 37% over the same period last year, ranking second on all three exchanges in Vietnam, including the HoSE, the Hanoi Stock Exchange (HNX) and the Unlisted Public Companies Market (UPCoM).

Rang Dong attributed these results to applying digital transformation through building a smart and automated manufacturing process that optimizes resources and increases productivity by 1.5 times. Previously, the country could produce 5 million LED light bulbs per month, but now the figure is up to 7 million.

On the other hand, when talking about Rang Dong, it is impossible not to mention the huge cash dividends paid annually. In the first year of listing on the HoSE, the company paid dividends at a rate of 18% but then gradually increased to 20%, 30% and 50% from 2017 until now, the most stable and highest level on the bourse.

RAL closed Friday at VND105,500 ($4.34) per share, down 0.66% from the previous session.