This update was shared by TNG’s leadership with the research analysis team of Joint Stock Commercial Bank for Investment and Development of Vietnam Securities Company (BSC, HOSE: BSI) in their latest report.
The Children’s Place, a traditional client of TNG
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According to BSC, The Children’s Place (TCP), a US-based clothing retailer, currently accounts for approximately 10-15% of TNG‘s FOB orders. However, TCP has been facing challenges in the first half of 2024, with the sixth loss in the last eight quarters. This is due to a 15-20% decline in both online platform visits and physical store customers compared to the previous year. Additionally, TCP is in the process of closing down inefficient stores as part of their restructuring efforts.
Amid concerns about potential business risks associated with TCP, TNG has planned to reduce the number of sewing lines dedicated to this client starting in Q4 of 2024, making room for other customers.
The analysis team is confident that TNG can secure alternative orders to compensate for the loss of TCP’s orders and maintain growth in 2025. Major clients, such as H&M, Walmart, and Lidl, have completed their inspections at TNG‘s factories and are expected to increase their orders next year.
Furthermore, Decathlon, the world’s largest sports retailer, has elevated their strategic partnership with TNG, placing them among their top three suppliers, with expectations of increased orders.
Regarding the accounts receivable from TCP, totaling VND 376 billion as of Q2 2024, TNG‘s leadership assured that they are not facing any challenges in collecting these payments. TCP continues to have access to loans from major US banks like Well Fargo and National Association, as well as the Mithaq Fund, an investment fund based in Arabia and TCP’s largest shareholder.
Additionally, the retailer is committed to improving its operations by reappointing experienced individuals to several senior positions within the company.
TNG‘s leadership remains confident in achieving their business plan for 2024, with projected net revenue of VND 7,900-8,000 billion and a minimum net profit of VND 310 billion. These figures would be record-breaking for the company. This confidence is supported by their highly successful first half of 2024, as reflected in their audited semi-annual financial statements for 2024. During this period, TNG recorded net revenue of nearly VND 3,527 billion and a net profit of VND 130 billion, exceeding the same period last year by 6% and 35%, respectively. The company attributed this success to their focus on exploiting challenging product lines and optimizing costs.
| TNG Achieves Most Effective First Half-Year Performance to Date |
In the stock market, TNG‘s share price is currently trading at VND 25,600 per share (as of the morning session on September 18), an 8% decrease from a month ago but still 45% higher than the beginning of the year. The average trading volume since the start of the year has been nearly 2.6 million shares per session.
| TNG Share Price Movement Since the Beginning of 2024 |
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