A new motorcycle model of Honda Vietnam. Photo: Honda.com.vn
Vietnam, a subsidiary of Japanese motor manufacturer, posted a profit of 11 trillion dong ($492 million) in 2015, rising an estimated 10% from a year earlier, according to a prospectus released by state-owned Vietnam Engine & Agricultural Machinery Corporation (VEAM).
The firm raked in revenue of 68 trillion dong ($3.04 billion) last year, marking a year-on-year increase of 12%, while its total assets remained little changed at $1.4 billion.
Honda Vietnam's financial indicators. Source: VEAM's prospectus
Honda Vietnam now takes the lion’s share of 70% in the local motorcycle market and has become a favorite brand name among Vietnamese consumers. The firm sold 2.1 million motorbikes in 2015, up 6% from a year earlier.
Foreseeing the strong growth of the local automobile market, Honda Vietnam in 2005 invested $65 million to build a car manufacturing plant in northern Vietnam with an annual capacity of 10,000 units.
Its car sales soared 23.38% year-on-year to 8,057 units last year. However, its market share was modest at 4.7% in the year, staying far behind that of Toyota Vietnam, at 25.5%.
With three motorcycle factories having a combined investment of $475 million and one automobile plant, Honda has launched nearly 20 million motorcycles and 44,000 cars over the last two decades of presence in Vietnam.
Honda Vietnam has a registered capital of $62.9 million, in which VEAM takes a 30% stake. The other stakeholders are Japan-headquartered Honda Motor and Thailand-based Asian Honda Motor.
VEAM plans to launch an initial public offering (IPO) on August 29 where it will offer 167 million shares, or a 12.57% stake, to the public at a starting price of 14,290 dong ($0.64) each.
Another 36% holding will be offered to strategic investors. The state ownership will stay at 51% post-IPO and will be cut to 36% by 2018.
The firm earned a consolidated net profit of $149 million on revenue of $227.8 million in 2014, rising 14.28% and falling 12.7% from a year earlier, respectively.