Thanh Cong textile firm aims for 21% after-tax profit growth in 2024

Thanh Cong Textile-Garment Investment Trading JSC (TCM) is targeting VND3.7 trillion ($148.2 million) in revenue and VND161 billion ($6.45 million) in after-tax profit in 2024, up 12% and 21% year-on-year, respectively, said CEO Song Jaeho.

Speaking at the company's annual general meeting of shareholders (AGM) on Friday, Song said that these targets have been set based on the recovery of the garment and textile industry.

Last year, the company, listed on the Ho Chi Minh Stock Exchange (HoSE) as TCM, did not operate at full capacity. However, in the first quarter of this year, it increased production capacity to 100%. The firm has received orders equivalent to 85% of the capacity for the second quarter and 80% for the third quarter.

According to the executive, TCM will change its product structure from popular products to added value goods such as UV-protective and light clothing made from super elastic fabric. It intends to invite experts from South Korea to study trends in developing new fabric lines, and strengthen cooperation with the Korea Textile Inspection & Testing Institute (KOTITI) to acquire technology transfer.

Besides, TCM completed the acquisition of SY Vina factory in the first quarter of this year to obtain a dyeing license and to enable the company to accept orders for woven fabrics and produce woven fabric clothes (currently, the company mainly accepts orders for knitted fabrics), Song said.

According to chairman Tran Nhu Tung, the 2024 business plan was set out at the end of last year so it does not include the purchase of the SY Vina factory, which is expected to contribute $17 million to TCM’s revenue this year.

In addition, at the beginning of this year, the company signed with parent group E-Land an order for 10 million products, doubling the figure from the previous year. Revenue from E-Land accounts for 35% of TCM’s total revenue each year, he added.

On the other hand, to finance the purchase of the SY Vina factory, the company plans to sell its Vinh Long 3 and 4 factories in the southern province of Vinh Long, and another in Trang Bang district, Tay Ninh province. However, the company has not yet reached agreements with purchasers, so the 2024 plan does not include this sum.

The TCM chairman revealed that the Vinh Long 3 and 4 factories cover a total area of 6.2 hectares, with the current market price of $120 per square meter, much higher than the $26 set by partners.

According to Tung, in the first quarter, the company posted revenue of $39 million and after-tax profit of $2.5 million, up 6% and 9%, respectively, over the same period last year, marking a strong recovery compared to the previous three quarters.

In 2023, affected by falling demand in main markets, TCM’s revenue reached VND3,324 billion ($133.15 million), down 23% year-on-year, and its after-tax profit of parent company shareholders hit VND132 billion ($5.29 million), down 53%. With these results, the company will pay dividends in shares at a rate of 10% instead of paying cash at a rate of 15% as planned last year.

On the stock market, TCM closed Friday at VND44,000 ($1.76) per share.