The three listed confectioners on the Ho Chi Minh Stock Exchange are eagerly looking forward to the Mid-Autumn Festival, which usually provides a boost to bakeries’ bottom line.

It is because mooncakes are traditionally eaten and gifted during the festival which falls on the 15th day of the eighth lunar month.

It falls on September 14 this year.

For listed Kinh Do Corp., North Kinh Do Food Joint Stock Company, two of the biggest producers of the cakes, third quarter earnings by far exceed that of others because of mooncake sales.

In 2007, Kinh Do Corp.’s third quarter net profit was VND91.8 billion (US$5.57 million) against VND75.8 billion in the fourth, the best of the other quarters.

For its smaller associate North Kinh Do, based in Hung Yen Province near Hanoi, the third quarter numbers every year are equal to the sum of the first two.

The slowdown in the economy this year meant the two companies’ first half earnings were middling.

Kinh Do Corp. announced after-tax profit of VND68.3 billion, a year-on-year fall of 6.3 percent, while North Kinh Do reported a net income of VND22 billion, a year-on-year decrease of 30.6 percent.

In this scenario, the Mid-Autumn Festival becomes even more significant for the two.

The third listed confectioner Bibica Corp., in contrast, usually pins its hope on the Christmas Season.

But a first-half loss of VND5.2 billion this year has forced Bibica to focus on mooncakes too.

It has raised output by 10 percent to 400 tons.

Stocks up

Efforts to cash in on the confectioners’ Mid-Autumn Festival bonanza saw investors buy shares of Kinh Do Corp., North Kinh Do and Bibica Corp. heavily this month.

Kinh Do has risen 38.2 percent to VND76,000 from VND55,000 on August 5.

North Kinh Do gained 35 percent to VND66,000, and Bibica rose 66.5 percent to VND31,800.

An increase of 10 to 20 percent in mooncake prices due to rising raw material and transport costs this yearhas, however, triggered worries of a slowdown in sales.

But to counter that, Kinh Do and Bibica have said they will mainly target medium- and high-income consumers with top-end products.

Output of mooncakes for this year’s festival by Kinh Do and Vinabico, a confectioner in which Kinh Do holds a 51 percent stake, is up to 1,800 tons.

Bibica has increased its premium mooncake output this year to 80 tons, or 20 percent of its total output.

Kinh Do’s public relations manager Nguyen Thi Ngoc Lien said her company would produce 40 percent more of its premium gourmet mooncake brand, Golden Moon.

It is estimated that 7,500 to 8,000 tons of mooncakes, worth about VND2.3 trillion ($139.6 million), will be sold in Vietnam during the Mid-Autumn Festival this year.

Reported by Tuong Chau   

Story from Thanh Nien News
Published: 29 August, 2008