Proposal to build North-South high-speed railway, what is THACO's potential?

As reported by Tuoi Tre Online, Truong Hai Group (THACO) has just sent a document to the Prime Minister, proposing to participate in investing in the North-South high-speed railway project.

THACO is one of the largest private corporations in Vietnam - Photo: THACO

Thus, there are currently two large private enterprises in Vietnam "racing" to propose investment in the North-South high-speed railway project.

What is the capital scale of THACO Group?

According to information from the national business registration system, Truong Hai Group Joint Stock Company (THACO) was formerly Truong Hai Auto Joint Stock Company.

This private enterprise was established in Dong Nai , with Mr. Tran Ba Duong (born in 1960) as founder, Chairman of the Board of Directors and legal representative.

In the most recent update, which took place near the end of 2020, THACO increased its charter capital from VND 16,950 billion to VND 30,510 billion.

According to THACO's financial report last year, as of June 30, 2024, the group's equity was VND54,260 billion, an increase of nearly VND4,200 billion compared to a year earlier.

The report also revealed that THACO's debt/equity ratio was 2.45 times. Converted to value, THACO's debt was nearly VND133,000 billion in the middle of last year.

An expert in the corporate analysis department of a securities company said that the debt-to-equity ratio is an important financial indicator, used to measure the ratio between the money a business has borrowed and its own capital.

He also emphasized that assessing financial safety through the D/E ratio requires considering additional factors such as: short-term and long-term debt structure, industry, participating fields, and the ability to control cash flow of each enterprise.

The expert declined to comment specifically on the case of THACO because this is a non-public enterprise and has not yet had access to detailed financial reports, making it difficult to evaluate. However, in general, according to practice, the normal debt ratio ranges from 1 to a maximum of 3 times compared to equity.

How does THACO do business?

THACO's semi-annual financial report last year recorded after-tax profit in the first 6 months of 2024 reaching VND1,011 billion, a slight decrease compared to VND1,076 billion in the same period in 2023.

Business data in recent years shows that THACO's profits began to decline from 2023, when the overall auto market faced many difficulties.

Previously, 2022 marked a year of great profit, when the group achieved a net profit of more than 7,420 billion VND. But by 2023, this figure had dropped to 2,734 billion VND.

Before the COVID-19 pandemic, THACO's business situation was quite positive, with after-tax profits often fluctuating between VND5,000 and VND6,000 billion. In 2015 alone, profits exceeded VND7,000 billion. Financial reports for 2018 and 2019 showed revenue of VND56,538 billion and VND59,123 billion, respectively.

Originating from the automobile industry, THACO has now developed into a multi-industry corporation, with an ecosystem including: Industrial production - mechanics, logistics - seaports, infrastructure investment, trade - services, high-tech agriculture - forestry.

At Chu Lai Open Economic Zone ( Quang Nam ), THACO is operating an industrial complex of more than 1,300 hectares, with a chain of factories assembling Mazda, Kia, Peugeot, buses and trucks...

In the automotive sector - the sector that is the foundation of THACO - it currently accounts for about 32% of the national market share.

Chairman Tran Ba Duong once said that the localization rate for passenger cars is currently 27-40%, trucks over 50% and buses up to more than 70%, helping businesses optimize costs and customize products to suit usage conditions in Vietnam.

In 2024, the group will continue to invest more than 1 billion USD in the specialized mechanical industrial park in Binh Duong, with the goal of becoming the leading supporting industrial center in the country, meeting the increasing demand from FDI enterprises and export markets.

In the proposal sent to the Government, THACO not only committed to playing the role of a financial investor, but also an industrial center for manufacturing train cars, locomotives, and signaling equipment - ensuring maximum localization to reduce costs, control quality, and create value for the economy.

The special point in THACO's proposal is the development of the domestic railway industry. With the proven technical foundation in Chu Lai, THACO Industries will cooperate with domestic enterprises to receive technology transfer and organize production right in Vietnam.

BINH KHANH - CONG TRUNG

Source: https://tuoitre.vn/de-xuat-lam-duong-sat-toc-do-cao-bac-nam-tiem-luc-cua-thaco-the-nao-20250527172723033.htm