At the close of trading on 25/7, SCD shares of Chuong Duong Beverage JSC (Chuong Duong Sarsaparilla) rose to the ceiling price of 14,700 VND per unit. This represents a 30% increase compared to the lowest price in early June.

The share price increase came despite the company reporting continued losses. In Quarter II, the company's revenue was nearly 27.7 billion VND, a decrease of more than 27% compared to the same period in 2024. Management explained that this is the low season of the year, and the early arrival of the rainy season also affected beverage consumption.

Chuong Duong Sarsaparilla reported a post-tax loss of over 25.4 billion VND, a 62% increase compared to the same period last year. This marks the 18th consecutive quarter the company has recorded a loss. The accumulated loss up to the end of June reached over 313 billion VND. Consequently, the company's equity fell to a negative 124 billion VND.

In the explanation of the second quarter financial report, management stated they are striving to improve and overcome losses by increasing coverage and distribution channels to boost sales volume, focusing mainly on adding more distributors. At the same time, the company is also optimizing operating costs.

Chuong Duong, formerly known as Usine Belgique, was part of the B.G.I Group (France). It was the largest beverage factory in southern Vietnam at the end of the last century. Chuong Duong's strength lies in carbonated soft drinks, with the most stable consumption being its sarsaparilla product line. Thanks to this product line, the business results from 2007 to 2016 were consistently stable with profits of 20-30 billion VND annually.

However, as numerous beverage brands flooded the market, Chuong Duong Sarsaparilla, with its outdated technology from the 2000s, gradually lost ground. After its parent company, Sabeco, was acquired by ThaiBev, SCD experienced a revival before the pandemic hit. The new management chose to minimize operating costs and sought solutions to improve sales by expanding distribution channels, investing heavily in packaging, and implementing promotions.

A can of Chuong Duong sarsaparilla. Photo: SCD

A can of Chuong Duong sarsaparilla. Photo: SCD

Since 5/2024, the Ho Chi Minh City Stock Exchange (HoSE) announced the mandatory delisting of SCD shares due to the company's three consecutive years of losses from 2021 to 2023 and negative charter capital. The stock then moved to the UPCoM exchange.

Subsequently, the Hanoi Stock Exchange (HNX) placed the stock under trading restrictions for over a year, allowing trading only on Fridays. This was due to the negative equity reported in the audited financial statements of 2023 and 2024.

This year, Chuong Duong expects revenue to reach 260 billion VND, a 42% increase compared to 2024. This plan is based on estimated consumption of over 4 million liters with the expansion of the distribution network in southern and central Vietnam and the launch of new products. Despite this, the company forecasts a continued loss of 80.5 billion VND, 20 billion VND more than last year.

In the annual general meeting documents at the end of this month, management stated that operating costs will be optimized, but substantial losses are expected due to high-interest rates on previous loans and land rental costs of nearly 50 billion VND per year. According to the company, the assumption of continued operation depends on Sabeco's continued financial support to pay off maturing debts. However, they believe "there's no reason for the parent company not to support them".

In the future, Chuong Duong will focus on expanding and strengthening its distribution system, while diversifying its products. Their goal is to "reassert their once-famous position as the 'king' of sarsaparilla drinks in Vietnam".

Tat Dat