Vietnam is considered as one of the most dynamic emerging countries in Asia, after it has overcome the economic challenges of the coronavirus pandemic. A World Bank report on Vietnam said that the country has shown remarkable resilience despite its deep integration with the global economy.
As the country closed its borders to international visitors, Vietnam relied on what it already has within its territory -- a strong set of private companies -- to drive its economy forward. In fact according to the general director of Vietnam Report Vu Dang Vinh, “private enterprises are contributing about 42 percent of GDP and 30 percent of the State budget while employing some 85 percent of the workforce nationwide.”
And while companies anywhere else are declaring bankruptcy and revenue declines, many Vietnamese companies across different sectors posted billions of dollars in revenue.
In a report by the Vietnam News Agency, the Vietnam National Petroleum Group (PLX) filed the highest revenue in 2020 — its results for Q4 showed net revenue of 123.9 trillion VND or 5.39 billion USD.
Vietnam-based residential real estate investment and operations, Vingroup JSC (VIC), came next with 110.5 trillion VND or 4.8 billion USD in revenue. The household appliance stores company, Mobile World Investment Corporation (MWG) followed with 108.5 trillion VND or 4.7 billion USD.
Hoa Phat Group JSC (HPG), the leading industrial manufacturing group in the country was next in line with 90.1 trillion VND or 3.9 billion USD in revenue. The holding company, Masan Group Corporation (MSN), followed with revenues reaching 77.2 trillion VND or 3.4 billion USD.
Other companies gaining billions of dollars in revenues included Vinhomes JSC (VHM) with 70.89 trillion VND (3.08 billion USD), Vietnam Dairy Products JSC (VNM) with 59.6 trillion VND (2.95 billion USD), Binh Son Refining and Petrochemical Company Limited (BSR) with 58 trillion VND (2.5 billion USD), PetroVietnam Oil Corporation (OIL) with 50 trillion VND (2.2 billion USD), Vietnam Airlines JSC (VHN) with 40.6 trillion VND (1.8 billion USD) and PetroVietnam Power Corporation (POW) with 29.7 trillion VND (1.29 billion USD), VNA reported.
Despite gaining billions of dollars in 2020 revenue, not all of these companies posted outstanding performance compared to the previous year, 2019. In fact, MSN, HPG, and VHM thrived while others like PLX, OIL, BSR, HVN, and VIC witnessed a significant slump in their revenues.
Of course, the outbreak was the main cause for that painful plunge.
To slow the spread of the virus, countries placed restrictions on travel, meaning that many people cannot purchase flights for holidays or business trips. This reduction in consumer demand caused airlines to lose planned revenue, which means they needed to cut their expenses by reducing the number of flights they operate.
Vietnam Airlines may have made it on the list of big gainers in terms of revenue in 2020, but the national flag carrier still posted a big loss in profit after the tax in the same period. In 2019, their profit after tax was a whopping 2.5 trillion VND but in 2020, it dropped to negative 11.1 trillion VND.
Vietnam's central bank recently announced its plan to provide an interest-free loan of up to 4 trillion VND (US$173.54 million) to Vietnam Airlines to help the flag carrier weather the wide impact of the pandemic. The government owns 86% of the airline.
Vietnam’s COVID-19 success is not based on luck
Vietnam will turn up fine, experts say.
Just recently, UK’s MoneyWeek highlighted Vietnam as one of the most promising markets in Asia.
“Vietnam’s immediate strength is that the impact of coronavirus has been fairly small and controlled compared to most of the world. So far, it’s had around 2,500 reported cases and 35 deaths. As in every country, there will be some unreported cases, but Vietnam’s statistics look pretty reliable – if there were large numbers of deaths that had not been recorded, it would be obvious.”
MoneyWeek contributor Cris Sholto Heaton said that this is not down to luck. “All the specialist investors in Vietnam that I spoke to for this article – Dominic Scriven of Dragon Capital, Andy Ho and Khanh Vu of VinaCapital and Craig Martin of Dynam Capital – give a great deal of credit to how quickly the government acted once the first signs emerged that Sars-CoV-2 was going to be a threat,” he added.
Because of Vietnam’s tough and decisive actions to combat COVID-19, the nation was able to reopen its economy early, resuming economic activity. And even while battling a third wave of local infections, the country has not declared nationwide lockdowns or fully restricted movements. Just weeks after new cases emerged, the government already declared it “basically under control” and sped up approval, delivery and distribution of COVID-19 vaccines. So far, 11,605 medical staff and other frontline workers in 12 localities have received their first shot.