GIC announced that it had withdrawn all of its holdings in Vietnam Sun Corporation – Vinasun (VNS).
Previously, in 2014, GIC bought 5.4 million of VNS shares with the adjusted price at about VND30,000 ($1.32) each. The investment of more than VND200 billion ($8.78 million) made GIC become the third biggest investor in Vinasun, holding a 7.96 per-cent stake.
However, on May 25, GIC decided to sell all the 5.4 million shares held in Vinasun at price of VND80 billion ($3.5 million), equivalent to VND14,700 ($0.65) per share.
As a result, GIC suffered a loss of about VND120 billion ($5.27 million) on its four-year investment in Vinasun.
GIC’s move came at a time when Vinasun was struggling given the rise of ride-hailing technology players like Grab and had to scale down its operations.
Although Vinasun set a very modest business target at the beginning of this year, its business operation was below expectation.
Revenue from passenger transport by taxi in the first quarter of this year decreased sharply, reaching only VND202 billion ($8.87 million), down 80 per cent compared to the same period last year.
This is due to Vinasun switching from taxicab ownership model to franchise one. Most of Vinasun's taxicabs are owned by its drivers. Revenue from advertising on taxi fell sharply, from VND7.9 billion ($346,947) to VND4.8 billion ($210,803).
Besides, after-tax profit of Vinasun dropped also strongly. Vinasun reported its after-tax profit in the first quarter of this year at only VND11.6 billion ($509,442), decreased 5 times over the same period. This figure is only equivalent to 12 per cent of the annual plan set by the company.
For taxi firms, the liquidation of old vehicles is simply a way to maintain the quality of their operations. The thing that Vinasun has actively sold its taxicabs over the past time solves the problems temporarily but fails to control the competition with ride-hailing firms.
Vinasun's increasingly narrowed operations make its drivers less supportive. Statistics show that in the year 2017, the number of calls per day to Vinasun dropped by more than 12,000 calls, only reaching 36,300 calls. On average, each driver of Vinasun received only 6.2 calls per day, a significant decrease compared to 2016 and previous years.
At the current price of VND14,000 ($0.61) per share, the market capitalization of Vinasun is just over VND900 billion ($39.6 million).