Vietnam gov't investment arm SCIC expects $438 mln pre-tax profit for 2024, a record high

The State Capital Investment Corporation (SCIC), Vietnam’s government investment arm, is set to achieve a record profit in 2024, driven by strong dividend income from its diverse investment portfolio.

SCIC currently holds stakes in 110 companies, including high-profile names such as tech giant FPT, dairy leader Vinamilk, brewer Sabeco, national flag carrier Vietnam Airlines, Hau Giang Pharmaceuticals, Binh Minh Plastics, and Tien Phong Plastics.

According to SCIC’s 2024 projections stated in a report, the corporation expects a pre-tax profit of VND11.14 trillion ($438 million), surpassing the year's target by 66%.

This would mark the highest profit since its establishment. SCIC’s contribution to the state budget is estimated to reach VND11.12 trillion, exceeding its budget target by 67%.

This impressive performance underscores SCIC’s resilience, as the corporation continues to successfully implement its 2021-2025 business and development plan, even in the face of global and domestic economic volatility.

Despite challenging conditions, SCIC has met five out of six of its key performance indicators, including revenue, profit, state budget contribution, Return on Equity (ROE), and Return on Assets (ROA).

A significant contributor to SCIC’s exceptional profit is its dividend income, which is expected to account for nearly 80% of the total revenue and profit.

SCIC’s investment portfolio, with a book value of VND53.4 trillion ($2.1 billion) and equity of VND183.16 trillion ($7.2 billion), is valued at nearly $8 billion on the market.

In 2024, several major companies within SCIC’s portfolio, including Vinamilk, FPT, Sabeco, Traphaco, and Hau Giang Pharmaceuticals, exceeded expectations in terms of business performance.

As a key shareholder in many large companies, SCIC plays an active role in shaping business strategies, implementing international best practices in corporate governance, optimizing capital utilization, and driving operational efficiency.

This involvement goes beyond passive investment, with the corporation working closely with its portfolio companies to address financial challenges, rectify management issues, and improve cash flow management.

This proactive approach has enabled its partners to navigate difficulties and achieve or surpass their business targets.

SCIC’s 2024 investment activities align with its long-term restructuring strategy. Notable moves include the VND500 billion ($19.7 million) purchase of shares in Military Bank (MBB), completing research on a VND5 trillion ($197 million) investment in BIDV’s new share offering, and advancing plans for a deep-seaport project in Cai Mep, located in Ba Ria-Vung Tau province.

Looking ahead, SCIC intends to maintain its focus on investments in sectors that are crucial to Vietnam’s economic development. Key future projects include additional investments in Vietnam Airlines, potash mining in Laos, and a range of large infrastructure projects directed by the government.

Having largely completed its divestment activities, SCIC is entering a new phase focused on expanding its investment operations. The corporation plans to build a robust, yet flexible, investment portfolio capable of adapting to evolving market conditions.

In 2024, SCIC also made significant strides in strengthening its international partnerships. The corporation signed an MoU with the Qatar Investment Authority and is actively exploring collaborations with investment funds from the UAE and Russia.

Under its approved strategy for the period 2026-2030, SCIC has been tasked by the Prime Minister to focus on maximizing its role as the government’s investment arm.

The goal is to prioritize investments in critical industries that align with national priorities, while fostering opportunities for other economic sectors to grow.