After Mekong Capital’s divestment, how is the owner of the restaurant chain Gogi, SumoBBQ, Vuvuzela,… Golden Gate doing business?

Owning a series of brands that have affected the eating life such as Kichi Kichi, Sumo BBQ, Vuvuzela, Gogi…, Golden Gate served over 18 million times in 2018, which brought in the revenue of nearly 4000 billion VND, the profit after tax of nearly 270 billion VND, outdistancing its opponents such as Redsun, Pizza 4PS or Chao Do.

Behind over 20 restaurant chain brands in Vietnam

Kichi Kichi conveyor hotpot, Gogi House Barbecue, Sumo BBQ, Vuvuzela beer station, Isushi Japanese food, Cowboy Jack’s pizza,.. Do this series of destinations make residents in Hanoi and HCM City think of some weekend appointments, a chance to hold a party or some drinks with friends?

Above are some of the names in the list of more than 20 brands of restaurant chains owned by Golden Gate Trading Service Joint Stock Company (Golden Gate) – considered “royal” in the restaurant sector in Vietnam market.

Born in 2005, starting as an Ashima mushroom hotpot restaurant, Golden Gate seeked for growth through continuous formation of new brands, with different “concepts”: hotpot, grill, beer station , Japanese, Korean, Mongolian, Vietnamese, Western, Taiwanese culinary cultures, and getting brand rights.

Up to now, Golden Gate has a property scale of 1,968 billion VND, owns 22 brands, has more than 300 restaurants in 25 cities. Currently, GoGi House is a brand of Golden Gate with the largest number of restaurants (89 restaurants), followed by Kichi Kichi conveyor hotpot (73 restaurants), Sumo BBQ (27 restaurants s), Hutong ( 25 restaurants), Vuvuzela beer station (17 restaurants) …

In 2019, Golden Gate will continue to expand its nationwide restaurant network with a view to opening 80 new restaurants on the first floor in second-grade cities and provinces in Vietnam.

Brands and the number of restaurants owned by Golden Gate.

The profit after tax was 270 billion VND in 2018, outdistancing its opponent Redsun.

Mekong Capital’s investment and support is one of the driving force to make Goden Gate’s continuous growth. A series of main brands such as Kichi Kichi, Gogi House, Sumo BBQ, Vuvuzela,… were born during the time Mekong capital accompanied with the company.

In August 2014, Mokong Capital divested from Golden Gate, bringing the profit rate of 9.1 times of the initial investment value and the gross internal rate of return was 45.1% after 6 years.

After Mekong Capital’s divestment, Golden Gate continued to develop new brands such as Cowboy Jack’s, Hutong Hotpot Paradise, K-pub and getting brand rights from Singapore, Japan,..

Along with expanding new brands, Golden Gate’s revenue and profit have continued to grow recent years. Particularly in 2018, the net revenue and its profit after tax were 3.971 billion VND and 269 billion VND, increasing respectively by 16.5% and nearly 5% compared to 2017.

However, the financial numbers of 3 recent years showed that the profit margin of Golden Gate has gone on a downward tendency, from 8,7% of 2016 down to 6,8% of 2018. This means that Golden Gate’s profitability shows signs of decrease.

Golden Gate’s board of managers said that the temparatory lower profit margin was the result of one-time expense accrued for development initiatives to improve the company’s performance in the coming years.

According to the Resolution of the General Meeting of Shareholders in 2019, Golden Gate said that the company would forcus on improving the profit margin by cutting raw material expense and strengthening the operational data to continue ro bring in the strong growth in profit and net revenue targets.

In 2019, Golden Gate has set the revenue goal to nearly 4.822 billion VND, increasing by 21% compared to 2018, the profit after tax would to 345 billion VND, increasing by 28% in comparision with 2018.

Golden Gate business performance (Sources: VIRAC)

In the same field of grilled hot pot restaurant chain business and towards middle-class customer segment, Red Sun (Redsun) International Trade Investment Joint Stock Company is the next opponent of Golden Gate.

Born 3 years after Golden Gate, Readsun owned about 220 restaurants with high-grade brands, luxurious restaurant chains such as ThaiExpress, KingBBQ, KhaoLao, Seoul Garden… 

 However, the revenue and profit of Golden Gate have outdistanced its opponent Redsun. In 2018, Golden Gate’s net revenue was 6 times as much as Redsun-ITI. While the profit after tax of Golden Gate was three digits, Redsun-ITI was still modest at 1.4 billion VND.

Redsun, Pizza 4PS, Chao Do business performance (Sources: VIRAC)

Apart from Ggolden Gate, 2 other companies in restaurant sector noticed and supported by Mekong Capital are Chao Do Food Joint Stock Company (Wrap & Roll) and Pizza 4PS Joint Stock Company.

The precursor of Chao Do was Wrap & Roll Company which was established in 2006, did business in Vietnamese food restaurant chain. Born 1 year after Golden Gate, in 2017, Wrap & Roll was invested by Mekong Capital and changed its name to Chao Do Food Joint Stock Company.

Curently, Chao Do owns 14 Wrap& Roll restaurants and a chain of 12 Saigon beef hotpot restaurants, distributing mainly in Southern provinces. In 3 recent years, Chao Do has suffered from continuous loss. Particularly in 2018, Chao Do lost over 64 billion VND, accounting for over 34% of its net revenue.

Compared to Chao Do, Mekong Capital’s investment on Pizza 4PS is showing positive signs. Pizza 4PS which is the abbreviation of Pizza for Peace, is a pizza brand chain with self-producted cheese, has 7 restaurant in HCM City, Hanoi and Danang.

 Only 4 years after launch, Pizza 4PS business has been profitable and continuously growing. In 2018, the net revenue of Pizza 4PS was 411 billion VND, increased by 45% compared to 2017. After the profit after tax in 2018 was over 41 billion VND, increased by 61% in comparision with 2018. The company recorded a net profit margin of more than 10%, higher than the rate of 6.8% of Golden Gate in 2018.

In general, with nearly 15 years of presence in the market, Golden Gate has achieved an impressive result in restaurant sector with over 18 million times of service in 2018 and its revenue was nearly 4000 billion VND, the profit after tax was nearly 270 billion VND, outdistancing its opponents such as Redsun, Pizza 4PS or Chao Do.

Golden Gate Partners – The biggest shareholder of Golden Gate 

The founders of Golden Gate were Mr. Dao The Vinh, Mr Nguyen Xuan Truong and Mr. Tran Viet Trung.

Currently, Mr. Dao The Vinh is the chairman of the board and CEO of the company with 5,4% of Golden Gate’s Shares. Mr. Vinh has also been voted to be a member of Mobile World Investment Joint Stock Company’s board of directors in the term 2018-2019.

Mr. Nguyen Xuan Truong, a member of Golden Gate’s board of directors and Deputy General Manager owns 4,1% of the shares. Mr. Tran Viet Trung , a member of the board of directors owns 4,6$% of the shares. Golden Gate Joints Stock Company Parters (manged by Mr. Tran Viet Trung) owns 44,2% of the shares. Prosperity Food Concrepts Co., Ltd. holds 37.9% of the shares.

Golden Gate shareholder structure as of May 22, 2019.

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