“GELEX: A Trusted Company with an A-Rating from VIS Rating”

VIS Ratings awards an ‘A’ rating to GELEX Joint Stock Group (stock code GEX – HoSE) amidst ongoing challenges in the global and Vietnamese economies. This is VIS Ratings’ first rating for GELEX.

According to the VIS Ratings report, the company’s competitive position and business diversification are rated as ‘Strong,’ largely due to the ‘Strong’ performance of its Industrial Real Estate and Electrical Equipment Manufacturing divisions. Most of the group’s subsidiaries are leading businesses in terms of market share and coverage.

GELEX is currently Vietnam’s top electrical equipment manufacturer, offering a diverse range of products and capturing 20-35% market share across various product categories.

Through its subsidiary, GELEX Power (stock code GEE), the company owns well-known national brands in the electrical equipment sector, including Vietnam Electrical Cable Joint Stock Company, EMIC Electrical Measurement Equipment Joint Stock Company, THIBIDI Electrical Equipment Joint Stock Company, Hanoi Electrical Machinery Manufacturing Joint Stock Company (HEM), and Vietnam Copper Wire Company (CFT).

In the field of industrial real estate, GELEX’s subsidiary, Viglacera Corporation – Joint Stock Company (stock code VGC), boasts the highest leased area in 2023 among listed companies in the industrial park sector. Viglacera has developed 15 industrial parks spanning over 4,000 hectares, with 1,000 hectares readily available for lease. The company is among the top five listed companies in industrial real estate and is also a leading enterprise in the building materials sector, holding 42% market share in construction glass and 30% in ceramic tiles.

Viglacera’s industrial parks experience stable growth.

VCW, specializing in clean water production with a capacity of 300,000 cubic meters per day, meeting around a quarter of Hanoi’s clean water demand, is another notable subsidiary. The company is currently investing in expanding its water supply chain system, aiming to double its capacity by 2025-2026.

GELEX is among the 30 largest listed companies on the stock exchange in terms of consolidated revenue over the past five years. VIS Ratings states in its report: “Our ‘Very Strong’ assessment of GEX’s Scale reflects its extensive and solid market presence in core business areas, a diverse range of products to serve market demands, and the ability to maintain good relationships with suppliers and financial institutions.”

VIS Ratings further adds, “We appreciate the business diversification of the GELEX Group, which has business and investment activities spanning across Vietnam and various industries. The company also has a track record of successfully executing business plans and consistently surpassing annual profit targets.”

The organization expects GEX to maintain its annual revenue at the ‘Very Strong’ level in the long term, backed by its solid market share in the Electrical Equipment Manufacturing group and its investment portfolio in the Industrial Real Estate group. GEX also has long-term expansion plans, including a project to increase clean water capacity, export electrical equipment products, and the Tran Nguyen Han Real Estate Complex project.

The group’s consolidated EBITDA margin (earnings before interest, taxes, depreciation, and amortization) stands at 19-23%, higher than the average for Vietnamese companies over the past five years. This high margin is mainly attributed to the Industrial Real Estate, Electricity, and Water business groups.

Meanwhile, GELEX’s total debt is relatively low compared to the average leverage ratio of Vietnamese businesses. The group’s main subsidiaries account for 55% of its total debt and have low debt-to-EBITDA ratios, with VGC at 1.0 times and GEE at 2.5 times.

Established in 1990, GELEX operates as a holdings company, primarily investing in two core areas: Electrical Equipment Manufacturing and Infrastructure. The company maintains its growth momentum through effective investment strategies and flexible solutions in a dynamic market environment. More recently, GELEX has focused on developing human resources, risk management, and upholding social responsibility.

VIS Ratings, licensed by the Ministry of Finance of Vietnam as a credit rating agency in September 2023, was established through a collaboration between Moody’s, the world’s most prestigious credit rating organization, and other organizations, initiated by the Vietnam Bond Market Association (VBMA). VIS Ratings provides independent credit rating services for domestic corporate bond issuers in Vietnam.