Gold price hits new heights, surprising profits of gold trading giants

DOJI Gold and Gemstone Group Joint Stock Company of tycoon Do Minh Phu has just announced information on its business situation in 2023 to bondholders. Accordingly, DOJI recorded a profit after tax of more than 491 billion VND, equivalent to about 1.3 billion VND/day.

DOJI's profit in 2023 will decrease by about 50% compared to VND1,017 billion in 2022, but is still much higher than in 2021.

DOJI has recorded high profits in the past two years in the context of economic difficulties, paralyzed bond market, sluggish real estate, and rapidly decreasing bank deposit interest rates. Gold is the choice of many people.

Although profits decreased, DOJI recorded an increase of nearly VND400 billion in equity by the end of 2023 compared to the end of 2022, to more than VND6,745 billion. However, the total liabilities of this enterprise increased sharply compared to the end of 2022, to more than VND15,850 billion.

By the end of 2023, DOJI had paid off all its bond debt. In the 2020-2021 period, the gold giant had issued many bond lots worth several trillion VND with interest rates around 9-10%/year. Of which, many lots matured in 2026. However, the bond market collapsed after the Tan Hoang Minh incident, causing many business owners to turn around and buy back bonds before maturity.

In the Vietnamese gold market, there are not many large gold trading companies. The few that can be mentioned are SJC, Bao Tin, PNJ and DOJI. The rest are all gold brands that are not well-known in the localities and do not have a large chain of stores like the above-mentioned companies.

Apart from SJC which has state capital, the remaining 3 enterprises are private. PNJ and DOJI are later developed enterprises but have very fast growing store systems.

DOJI has a large revenue but compared to the same industry, the gold and jewelry retail giant - Phu Nhuan Jewelry Joint Stock Company (PNJ), DOJI's profit is quite modest. In 2023, PNJ recorded a profit of VND 1,971 billion, an increase of nearly 9% over the previous year.

In the first two months of 2024, PNJ achieved 550 billion VND in profit after tax. PNJ's profit exceeded 1,000 billion VND in 2019 and has been maintained since then.

For DOJI, it is quite surprising that this business's profits will decline in 2023 when the gold price increases sharply. In 2023, the gold price will increase by about 10 million and reach over 76 million VND/tael at the end of the year. The gold market is also bustling in the last month of the year.

Gold trading companies often record increased profits in the context of rising gold prices, strong price fluctuations and a vibrant market. Gold trading companies benefit from the widening difference in buying and selling prices (up to 2-3 million VND/tael during peak times) and increased revenue.

PNJ's business results in the second half of 2023 and the first months of 2024 show this.

PNJ is a company with shares listed on the stock market and has many foreign shareholders. DOJI is a private enterprise, owned by Mr. Do Minh Phu's family.

Mr. Do Minh Phu handed over the gold empire to his son and moved to the banking sector, becoming Chairman of Tien Phong Bank ( TPBank ).

Currently, Mr. Do Minh Duc is the Standing Vice Chairman, and Ms. Do Vu Phuong Anh is the General Director of DOJI. Both are children of Mr. Do Minh Phu, Chairman of the DOJI Founding Council. In October 2023, Ms. Do Vu Phuong Anh - the eldest child of Mr. Do Minh Phu - was elected as the General Director of DOJI.

*The soaring gold price and the huge difference with the world price can bring huge profits to gold traders. Photo: Minh Hien*

DOJI Group has 15 member companies operating under the parent-subsidiary model, 5 joint ventures and 61 branches, nearly 200 centers and stores nationwide, along with more than 400 agents and points of sale nationwide.

According to DOJI, at this group, as of early March 2022, Ms. Do Vu Phuong Anh is one of 3 shareholders contributing capital along with her father and younger brother Do Minh Duc. Of which, Mr. Do Minh Phu owns 70% of the capital, the remaining 30% is divided equally between Do Vu Phuong Anh and Do Minh Duc.

With the group's equity at the end of 2023 at VND 6,745 billion, the assets of Ms. Phuong Anh and her younger brother Do Minh Duc at DOJI, if at the above ratio, would be worth VND 1,012 billion each.

In addition to DOJI, Do Vu Phuong Anh and Do Minh Duc are also among the largest individual shareholders at TPBank, owning nearly 24.5 million shares each, equivalent to 1.11% of charter capital/person.

Mr. Do Minh Phu's family is ranked by Forbes in the list of top 20 business families in Vietnam.

Source