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2017 THACO Annual General Shareholders' Meeting
5/3/2017 9:24:10 AM
On 12 April 2017, THACO hosted its annual Shareholders' Meeting to report its business operations in 2016 and business plan in 2017.
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2016 business results

In 2016, Vietnam economy slowed down, GDP was lower than expected with only 6.21%, the auto sales reached 342,000 vehicles, up 23% compared to the same period in 2015.

Over the past year, THACO sales reached 110,548 vehicles (including 63,456 passenger cars and 47,092 commercial vehicles), increasing 37% over 2015, accounting for 41.5% of Vietnam Automobile Manufacturers' Association (VAMA) market shares, leading the national market with 32% of the market shares.

In the light of AFTA integration, when taxes reach zero point in 2018, with increasing pressures from competitions, in 2016, THACO actively discounted the vehicle prices, therefore, 2016 after-tax profits were down from 15% in 2015 to 11%, but car profit was still 7,333 billion VND, 4% higher than that in 2015.

2016 is the first year THACO merged with Dai Quang Minh, consolidated revenue reached 65,823 billion VND (3 billion USD), a 44% growth compared to 2015. The profit from Dai Quang Minh in the last 6 months of the year which was transferred to THACO was 345 billion dong (equivalent to THACO's shareholding of 90%). And after adjustments of consolidated accounting standards, THACO's after-tax profit is 7,899 billion VND, up 12% against 2015.

As of 31/12/2016, the total number of staffs at THACO and Dai Quang Minh was 17,345, an increase of 21% over the same period of 2015. Total 2016 budget of THACO was 17,697 billion VND, of which budget contribution in Quang Nam was 14,350 billion VND.

Over the past year, THACO has expressed its social responsibility by participating in social financing activities with a total amount of more than 34 billion VND for education, disaster and floods relief, charity house construction, funds for the poor, etc. Especially, 200 billion VND was granted for the "Start-up nation" program and more than 80 billion VND for Road to Olympia program in 5 years (2016 - 2021).

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2017 Business Plan

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The sales of passenger cars are expected at 205,000, down 7 percent over 2016. As a result, the meeting has passed THACO's passenger car sales of 58,384 cars, 8 percent lower than 2016, accounting for 27 percent of the market shares (28,016 KIA cars, 29,818 Mazda cars, and 550 Peugeot cars). Meanwhile, the sales of trucks and buses are estimated at 53,636 vehicles, up 14 percent over last year, accounting for 45 percent of the market shares. As planned, in 2017, the total sales will be at 112,020 vehicle, equivalent to 2016.

Regarding commercial vehicles, Hyundai Solati mini bus will be offered for sale. New projects in developing new products (engines with Euro IV emission standards) to replace the existing line-up will be implemented; new bus line-up with new identity will also be launched.

THACO total revenue is expected at nearly 64,000 billion VND (equivalent to 2006), after-tax profits at 5,063 billion VND, down 31 percent compared to 2016. At the end of 2017's first quarter, THACO revenue reached 13,088 billion VND, and after-tax profit at 1,249 billion VND, completing 25 percent of the year target.

2017 profit is lower than 2016's for: in accordance with AFTA integration, Vietnam auto market in 2017 is predicted to have fierce competition from imported cars in ASEAN. Facing the issue, THACO will take active role in discounting the prices. 2017 is also the year to start the new investment cycle on a large scale (manufacture-retail) and use some capital loans, which explains for the increased financial costs; at the same time, new industries have not generated profits yet and have to share profits with business partners.

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In 2017, the investment for auto-mechanics operations is 13,094 billion VND, 319 percent higher than 2016 (including investment in Chu Lai Complex at 8,846 billion VND, 5.4 times higher than 2016; and 3,209 billion VND for the retail system) for the following projects: Complete and put into operation the bus plant in July 2017; the construction of Mazda passenger car factory with the capacity of 100,000 vehicles/year was started on 26 March 2017, it will be finished and put into use in March 2018; Continue upgrading the line of technology and machinery for the existing plants; Aim to develop Chu Lai Complex into the national center of multi-purpose Mechanics and Autos on a regional scale; Complete the 170-metre expansion for the wharf; Regarding the retail network, THACO continues the investment to improve its competitiveness, increase market shares and sales. As of the end of 2017, THACO distribution system will reach 218 showrooms/dealers, including 170 affiliated showrooms.

Agriculture is considered to be a new industry to promote the industrialization based on its strengths in mechanics and management competence. However, the country still emphasizes the option of partnership with non-control capital contribution for partners with deep expertise in the field of agriculture to create the advantages of sustainable development.