Food firm Kido’s stock hits 17-month low on poor performance

Shares of leading Vietnamese food and cooking oil producer Kido Group (KDC) dropped 11.2% from VND62,000 ($2.48) a month earlier to under VND54,900 on Monday, marking its lowest level since March 2023.

In addition to the general market downturn, KDC was also affected by the sharp drop in the group’s after-tax profit, from VND715 billion ($28.63 million) to VND11 billion ($440,528), and the parent company's profit from VND918 billion to VND1.8 billion in the second quarter of 2024.

Specifically, its net revenue from sales and services decreased by 25.6% year-on-year to VND1,717 billion ($68.76 million) and its gross profit dropped 16% to VND270 billion ($10.8 million). The firm attributed the declines to the restructuring of the business model and market fluctuations.

Its financial revenue plummeted from VND1,120 billion ($44.85 million) to VND46.6 billion ($1.87 million) due to a shortfall in investment liquidation. In the same period last year, the group sold all shares in Cai Lan Oils and Fats Industries Company (Calofic) to Singapore’s Siteki Investment Pte Ltd. It transferred 18.8 million shares, equivalent to 24.03% of charter capital, of Kido Foods to Nuti Invest Company Limited.

Financial, sales and management expenses decreased by 66%, 41% and 52% to VND29 billion ($1.16 million), VND242 billion ($9.69 million) and VND98 billion ($3.92 million), respectively.

In the first half of the year, the group recorded a 19% year-on-year fall in net revenue to VND3,532 billion ($141.45 million) and a 94% decrease in after-tax profit to VND33 billion ($1.32 million). The profit corresponding to the parent company’s shareholders plunged 98% to VND11.2 billion ($448,537).

This result puts great pressure on H2/2024 when Kido's board of directors set a very ambitious business plan for this year with VND13 trillion ($510.75 million) in revenue, a year-on-year increase of 50%, and a pre-tax profit of VND800 billion ($31.43 million), 2.5 times the 2023 figure. After H1, the group achieved only 27% of the revenue target and 7% of the profit plan.

Acquisition of Hung Vuong Plaza

Recently, Kido announced a resolution approving a plan to own a 77% stake in Hung Vuong Plaza commercial center in District 5, Ho Chi Minh City, invested by Hung Vuong JSC. The group completed the acquisition of 39.4% on August 9.

Hung Vuong JSC was established in 2004, with the main shareholders being Kinh Do Real Estate JSC, Lam Phan Company Limited and VOF Investment Limited managed by VinaCapital.

Hung Vuong Plaza was opened under the name Parkson Hung Vuong in 2007 but its business situation was lukewarm. In April 2023, Parkson Vietnam Company Limited applied for bankruptcy a court in HCMC. Then Parkson Hung Vuong was taken over by Kido. In August 2023, Hung Vuong Plaza was reopened and converted into a commercial center following the Van Hanh Mall model.

At the 2024 AGM on June 19, CEO Tran Le Nguyen said that the group also had a plan to acquire Van Hanh Mall, but the plan has not been implemented yet.

In addition to the food and consumer goods segments, Kido has always cherished an ambition to invest in real estate. Before Hung Vuong Plaza and Van Hanh Mall, the group invested in the Lavenua Crown project located on a prime land in the center of HCMC’s District 1.

The group's financial statements recorded an investment of VND1,070 billion ($42.85 million) in Lavenua, with a 50% ownership ratio. However, it had to set aside a provision of up to VND753 billion for this project.