Tech giant VNPAY’s 2022 profit plunges 94%

Vietnamese tech unicorn VNPAY has established a firm foothold in the domestic e-wallet market, but its net profit in 2022 plummeted 94% to VND19.5 billion ($804,600), the lowest in the 2019-2022 period.

Amid the increasingly popular non-cash payment trend and the highest smartphone usage and internet "coverage" rates in the world, the digital payment sector in Vietnam has seen rapid growth. Of which, e-wallets are the most vibrant segment that have made a significant contribution to the growth of digital payments in the country.

According to forecasts, with a compound growth rate of up to 30.2% per year in the 2020-2027 period, Vietnam’s mobile payment market could reach $2.7 trillion by 2027. This shows huge potential for the development of Vietnam's e-wallet market.

But the Vietnamese e-wallet market is also known for its "money-burning race".

VNPAY is among over 40 e-wallet providers in Vietnam to have joined the payment market with banks.

In 2009, two years after its establishment, VNPAY became one of the first companies allowed by the State Bank of Vietnam (SBV) to pilot the provision of e-wallet payment services. In October 2015, it was officially licensed by the central bank to provide payment intermediary services.

VNPAY is now the leading provider of electronic payment solutions in Vietnam. It has cooperated with more than 40 banks and 250,000 businesses to develop a diverse digital ecosystem from basic financial transactions like money transfers, phone top-ups, and electricity and water bill payments, to advanced utilities including air ticket bookings, hotel reservations, train, car and taxi bookings, movie tickets, and VnShop retail.

Owning a rich ecosystem not only helps VNPAY increase convenience for consumers/partners by enabling them to pay service bills quickly without cash, but also ensures its position as a "giant" in the Vietnamese e-wallet market, despite the increasingly fierce competition with the presence of a series of rookies such as VinID, SenPay and 9Pay.

Billion-dollar revenue

In 2022, VNPAY reported net revenue of VND29,937 billion ($1.2 billion at the current exchange rate), growing nearly 35% over the same period the previous year, the highest level in four financial years.

Its average annual growth rate in the 2019-2022 period hit more than 34.5%.

However, after deducting expenses and taxes, the company's 2022 net profit plunged 94% to VND19.5 billion ($803,300), the lowest in 2019-2022. Its ROA (return on assets) and ROE (return on equity) were only 0.4% and 0.6% respectively, very low compared to previous years.

However, VNPAY's average annual net profit growth in the 2019-2022 period was still very impressive at 125.5%, mainly thanks to the strong increase in net profit in 2020-2021.

VNPAY’s total assets as of December 31, 2022 reached nearly VND4,992 billion ($205.65 million), an increase of 56% compared to 2019. Of which, its equity was VND2,994 billion, up 63%, and liabilities hit nearly VND1,998 billion, up 46.3%.

Compared with other e-wallets, VNPAY's net profit in 2021 was only behind VNPT Pay with VND380 billion ($15.65 million), according to their financial statements. Notably, four e-wallets that reported losses were Moca (VND165 billion or $6.8 million), ShopeePay (VND385 billion or $15.86 million), Momo (VND800 billion or $32.96 mllion), and ZaloPay (VND1,200 billion or $49.4 million).