How former Vinacomin 'boss' secretly took control of Ha Long Beer

Mentioning beer businesses in Vietnam, people often think about big brands such as Sabeco, Habeco and Heineken, but few know that there is another famous 35-year-old brand - Ha Long Beer.

The company's stock (HLB) is currently among those with the highest market price on the three stock exchanges, namely the Ho Chi Minh Stock Exchange (HoSE), the Hanoi Stock Exchange (HNX), and the Unlisted Public Companies Market (UPCoM).

Closing the December 15 session, HLB, listed on the UPCoM, reached VND300,000 ($12.32) per share, only behind VNZ of VNG Corporation (VND689,000).

Based in the northern province of Quang Ninh, Ha Long Beer and Beverage JSC was formerly known as Hong Gai Food Factory, established in 1967. After a long period of development, along with market economy movements, Hong Gai Food Factory also experienced many changes, with the most important milestone being the birth of the Quang Ninh Beer and Beverage Factory in 1992. The factory was renamed Quang Ninh Beer and Beverage Company in 1996 and Ha Long Beer and Beverage JSC in 2003.

The appearance of Carlsberg Breweries as a major shareholder (holding 31.3% as of mid-2014) and the role of Bui Huu Quang and Tayfun Uner as board members brought many expectations for the development of the company.

In addition, the fact that the State Capital Investment Corporation (SCIC) wanted to auction 1,050,000 HLB shares, equivalent to 35% of charter capital, promised to help the company welcome more investors with great potential, techniques and technology. At that time, SCIC offered a starting price of VND29,000 ($1.19 under the current exchange rate) per share, equivalent to proceeds of VND30.45 billion ($1.25 million).

However, the auction, which was scheduled to be held in August 2014, was unsuccessful because no investors registered to buy. SCIC did not release more information about the next auction, but the name Ha Long Beer disappeared from a list of enterprises selling capital in 2015.

The identity of the new owner of Ha Long Beer was gradually revealed when documents showed that the company had named Doan Van Quang as its chairman in June 2015. Quang held this position until April 2023.

Quang is a veteran leader at state-run mining group Vinacomin who was at the peak of his power as deputy general director in the 2007-2010 period. After that, he took on the role of board member of Vinacomin - Vang Danh Coal JSC and then chairman and CEO of Vinacomin - Mong Duong Coal JSC, before retiring in 2015.

Coincidentally, also in 2015, SCIC and Carlsberg Breweries were replaced on the list of major shareholders by Doan Truong Giang (13.94%) - son of Doan Van Quang, Pham Thi Huong (20%) - Quang's sister-in-law, and Doan Duc Can (15%) – who has the same permanent residence as Huong.

The remaining two major shareholders were Aseed Holding (20%) and Hirishima Lenture Capital (11.33%), both from Japan.

In May 2019, Can transferred his entire stake to Pham Thi Dao - Quang's wife. In November 2022, all of the shares owned by Huong were also transferred to Doan Thien Tan - Quang's son.

By the end of 2022, Doan Van Quang's family held controlling power over Ha Long Beer with a 57.671% stake in its charter capital, equivalent to a market value of about VND533 billion ($21.88 million).

Notably, many of the above individuals had appeared at Ha Long Beer before Doan Van Quang retired. Accordingly, Pham Thi Dao - Quang's wife, and Doan Truong Giang - Quang's son, had been Ha Long Beer shareholders since at least 2010. Pham Thi Huong (Dao's younger sister) had held HLB shares since April 2014, while former major shareholder Doan Duc Can had owned HLB shares since September 2015.

Business performance

Despite having modest capital and assets, Ha Long Beer has maintained good business growth for many years, with the compound growth rate (CAGR) for the 2015-2022 period reaching 25.91% in revenue and 28.8% in profit after tax.

In 2020 and 2021, despite the impacts of the Covid-19 pandemic, the firm still saw positive business results. Its net revenue in 2020 reached VND709.8 billion ($29.14 million), an increase of 21.2% compared to 2019; and its net profit was VND64.8 billion ($2.66 million), up 9.45%.

In 2021, the growth trend continued with net revenue increasing by 38.2% to VND981 billion ($40.28 million). After deducting expenses and taxes, Ha Long Beer’s net profit hit VND81.8 billion ($3.36 million), an increase of 26.2%.

Notably, last year, the company saw record revenue and profit growth since its establishment, with revenue exceeding the VND1 trillion mark for the first time at VND1,369 billion or $56.2 million (up 39.5% year-on-year), and after-tax profit hitting VND126.5 billion or $5.2 million ( up 54.6%).

Thanks to that, its ROA (return on assets) and ROE (return on equity) reached 24.44% and 33.73% respectively; far surpassing those of Sabeco (15.96% and 22.37%) and Habeco (6.95% and 9.48%).

On the other hand, profit continuously grew while shares were left undiluted for many years, pushing up its basic earnings per share (EPS) to VND40,886 ($1.68) in 2022, the highest in the beer industry and also among the top businesses on the stock market.

Not only growing as a business, Ha Long Beer has become famous for paying high dividends over many years. During the 2014-2018 period, the company continuously paid cash dividends to shareholders, with a rate of 60% in 2016, 70% in 2017, and up to 200% in 2018.

In 2019, the dividend payment was interrupted because the company spent the entire remaining profit after giving bonuses to its employees to invest in upgrading and completing the Dong Mai beer factory with a capacity of 50 million liters per year.

In 2020 and 2021, the company continued to pay cash dividends at respective rates of 20% and 100%.

In September this year, HLB made an impression with the announcement of a payment rate of 150% per share (one share gets VND15,000 or $0.6). With nearly 3.1 million floating shares, it is estimated that HLB will need to spend more than VND46 billion ($1.89 million) on dividend payments.