Trade brand stuff with little profit, the airport service is really a profitable business for Mr. Johnathan Hanh Nguyen

Despite trading in luxury goods, it is surprising that DAFC’s profit is quite low, both in absolute numbers and profit-to-sales ratio. In 2018, DAFC reached approximately VND 1,200 billion in revenue and VND 31 billion in profit before tax, or a margin of only 2.6%.

Nguyen Thao Tien, the daughter of “King of the Brand” Johnathan Hanh Nguyen and Mrs. Le Hong Thuy Tien announced on Instagram that her father had arranged a special plane to fly back to Vietnam to isolate Covid-19. It is estimated that the cost of this flight could be up to 10 billion.

Earlier, the young business woman attended Milan Fashion week in Italy during the day period from 18-24 February. Thao Tien’s attendance at luxurious fashion weeks in Europe is not surprising when she is the Vice President of Luxury Fashion Development of IPP Group.

The key IPP positions are made by Mr. Hanh Nguyen and his children

IPP Group is known primarily for brand stuff business in Vietnam, the Group’s website states that IPP accounts for nearly 70% of the international brand name market distributed domestically.

IPP’s fashion and brand stuff business is operated through 3 companies, namely DAFC, ACFC and CMFC. DAFC – the company in charge of IPP’s luxury brand distribution segment – is currently the distributor of high-end brands such as Rolex, Bvlgari, Armani Exchange, Burberry, Cartier … And ACFC and CMFC distribute intermediate fashion with Nike, Mango, Tommy Hilfigher, Levi’s brands …

In addition, IPP also operates in many other fields such as aviation (investing in Sasco, Cam Ranh international terminal), fast food franchise to lesser known businesses such as IPP Sprits. wine business), IPP Leaf (trading in tobacco materials), logistics, technology retail …

IPP Group business segment system

 

Despite trading in luxury goods, it is surprising that DAFC’s profit is quite low, both in absolute numbers and profit-to-sales ratio. In 2018, DAFC reached approximately VND 1,200 billion in revenue and VND 31 billion in profit before tax, or a margin of only 2.6%.

ACFC, an intermediate fashion distribution company, also had similar revenue but had a profit before tax of VND 107 billion.

Profit before tax Unit: VND billion | Source: VIRAC, CAFEF

Meanwhile, Tam Son – another big name in the field of brand name distribution in Vietnam – has a turnover ranging from 1,300-1,500 billion / year and a profit being up to 200 billion / year. Big brands distributed by Tam Son include Hermes, Patek Philippe, Chopard, Bottega Veneta, Boss …

If the profit of the branded business segment is modest, the aviation service will be the “leading factor” of IPP Group.

Holding company IPP Group, together with DAFC and ACFC, holds 45% of Sasco’s shares of Tan Son Nhat Airport Services JSC (Sasco) – one of the largest enterprises operating non-aviation services at airports. The company’s main sources of income come from duty-free goods, merchant lounge services, food, restaurants and hotels at the airport … Sasco’s annual profit is over VND 400 billion, of which more than a half came from the VIP lounge business at the airport.

Profit before tax of SASCO (billion VND)| Source: VIRAC, CAFEF

IPP is also a major shareholder of Cam Ranh International Terminal Corporation (CRTC). In 2018, the first year of operation, CRTC – one of the first private units to invest in the airport terminal – achieved revenue of VND 560 billion and VND 52 billion.

An indispensable business segment of IPP is restaurant business. IPP franchises a number of fast food brands such as Domino’s Pizza, Burger King, Popeyes fried chicken and several airport restaurant brands. Like many other popular names, the fast food business of IPP has not had profit after many years of operation.

 


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