VIETNAM KIM VIET FOOTWEAR CO.,LTD

VIETNAM KIM VIET FOOTWEAR CO., LTD (CÔNG TY TNHH GIẦY KIM VIỆT VIỆT NAM) is a relatively young player in Vietnam’s footwear manufacturing industry, established in early 2019 and operating as a foreign direct investment (FDI) enterprise under the ownership of CÔNG TY TNHH GIẦY XIN LONG. Located in the Nong Cong Industrial Complex in Thanh Hoa Province, the company has shown promising expansion in physical scale but remains under pressure when it comes to financial sustainability and operational stability.

The company’s financial records for the fiscal year ending December 2023 paint a mixed picture. On the one hand, total assets increased to USD 47.01 million, a notable 16.98% year-on-year growth, indicating a willingness to invest in expansion. This growth in assets followed two consecutive years of double-digit increases, demonstrating that the company has consistently reinvested in facilities or equipment, which is positive in terms of long-term capacity development.

However, this expansion has not translated into stable profitability. Sales revenue in 2023 reached USD 52.88 million, representing a 10.44% decline compared to 2022. More concerning is the company’s swing into the red, posting a net loss of USD 1.14 million, compared to a modest profit of USD 774,922 the previous year. This dramatic 246.7% drop in profitability suggests operational inefficiencies, rising costs, or weakened demand in key markets. The company also reported negative working capital of USD -1.62 million, raising concerns about short-term liquidity and its ability to meet immediate obligations.

The equity base, while still at a relatively healthy level of USD 25.87 million, also declined by 4.21%, which breaks the upward trend from prior years. It indicates that losses are beginning to erode shareholder value and capital reserves. The rapid growth in paid-up capital from a charter level of just USD 493,000 to over USD 26.7 million by 2023 highlights a significant capital injection by the parent company, possibly to fund fast-tracked operations or offset early-stage losses.

Led by Chairwoman Luu Kim Thu (Liu Jin Shu), a Chinese national, Vietnam Kim Viet Footwear focuses solely on the manufacture of footwear without diversification into other product segments. While this specialization can be advantageous for developing production expertise, it may also limit the company’s ability to hedge risks during downturns in global footwear demand.

In summary, VIETNAM KIM VIET FOOTWEAR CO., LTD shows characteristics of a high-potential but currently underperforming manufacturing firm. Its asset base is growing steadily, and its backers appear committed to capital support, which bodes well for long-term resilience. However, declining revenue, emerging losses, and liquidity strain suggest that the company must urgently address operational efficiency, cost management, and market strategy if it is to transition from expansion to profitability. Stakeholders, including creditors, partners, and potential buyers, should monitor its short-term financial discipline closely while recognizing its still-developing role in Vietnam’s competitive footwear export industry.