As reported in the previous reports, this morning, November 7, 2017, F.I.T Group held an extraordinary shareholder meeting. One of the important things is officially electing Mr. Hua Xuan Sinh into the Board. Hua Xuan Sinh is not a strange name in Vietnam market. He is experienced in enterprise management, production organization and sales development. His name is associated with Duc Viet Sausage, where he has almost attached his career to develop the company from nothing to become a leader in the food sector. Sinh’s involvement will be accompanied by the development of new projects based on the Group’s existing business foundation and on personal experience and business system that Sinh has developed in the past. Having known and worked with him for many years, I am confident that he will be an important link, at least in terms of improving corporate governance following advanced corporate governance practices that the Group is building.
Another important aspect that was repeated at the extraordinary shareholder meeting was the issuance of ESOP (employee stock ownership plan) shares to the employees. In the financial world, issuing shares in the form of ESOP is a common management practice to improve the performance of enterprises to maximize the shareholder value. Ownership conflict between owner (shareholder) and employee (staff) is classic to explain the inefficiency in the operation of any business. When employees have the opportunity to become shareholders, they will work best to bring higher stock value. I think that implementing ESOP for staff should be done regularly to encourage the best effort of each person.
The above two aspects are actually continuing the process of restructuring and implementing the Group’s new governance strategy. Today, reading the Third Quarter Financial Report of each company, I was pleased to see the change being spread to the subsidiaries. It is noteworthy that Cuu Long has changed fundamentally, which is reflected in new investment activities and especially through business results. Cuu Long Pharmaceutical (CLP on the HSX) is in the process of completing the construction of Capsule No. 3 factory to meet the huge demand of the market. At the same time, DCL is also in the final stage of the foreign partners’ technology transfer and investment in the production of cancer drug as well as asking for license to officially distribute cancer drug in Vietnam. These fundamental investment activities have had significant influence on the Company’s revenue growth.
As a result, although the cumulative revenue of the first nine months did not increase, 526 billion VND compared to the same period last year, 530 billion VND – the consequence of basic investment activities, business performance is better at cumulative operating profit, 80 billion VND compared to 69.7 billion VND, and profit after tax, 70 billion VND compared to 53.4 billion VND. More importantly, the business performance index improved significantly. Specifically, operating profit margin for the third quarter was 14.6% versus the same period last year at 8.9%, and cumulative performance at 15.2% versus 12.7%. With the targeted profit after tax margin, Quarter III reached 10% versus 7.1% for the same period last year, and accumulated at 13.3% versus 10.1%. Efficiency in business performance is most evident in reducing cost of sales and general and administrative expenses. These are two important factors in the strategy to bring more efficiency in the Group’s operations.
I will come back with new information as it appears. Wish shareholders and those who are interested in success at work.
(Quach Manh Hao – Strategic Advisor of F.I.T Group)
