KDF Seeks IPO Cash and 50% of Vietnam Ice Cream Market
The Ho Chi Minh City, Vietnam-headquartered Kido Group aims to list its Kido Frozen Foods (KDF) unit on the UPCoM Index of the Hanoi Stock Exchange after completion of an initial public offering (IPO) to sell 20% the subsidiary. The transaction, scheduled to be finalized by April 19, will be followed by a 15% divestment to company employees and partners.
Shares in the IPO are priced at VND 52,000, which values KDF at approximately VND 3 trillion (US $132 million). However, Viet Dragon Securities, which is advising the Kido Group, values the shares higher at VND 64,700 each. It estimates that the company’s sales volume will rise 27% to approximately VND 1.8 trillion this year, which could result in a net profit of VND 202 billion.
The Kido Group, which makes ice cream, yogurt, cooking oil and instant noodles, acquired the Wall’s ice cream brand from Unilever in 2003 to establish KDF. It formerly produced mooncakes, crackers, chips, crackers and cookies as well, but sold that operation to Mondelez for $460 million.
The focus now is increasingly on ice cream, as this business is generating a sweet revenue stream and steady profits. KDF’s goal is to capture 50% of the ice cream market in Vietnam and to double its frozen food distribution points by 2020.
“KDF currently has more than 70,000 points of sale in the country and we plan to increase this by 10,000 to 20,000 each year,” commented General Director Tran Quoc Nguyen during an information event attended by potential investors last month in Hanoi.
The company’s ice cream brands include Celano and Merino, while Wel Yo yogurt targets the children’s market. Flavors range from vanilla, chocolate and strawberry to cranberry, green tea and many more. Distribution is in multiple sizes, from hand-held cones and sticks to 400ml tubs.
The frozen food business reportedly accounted for substantial profits at KDF in 2016. According to a report from the Ho Chi Minh Securities Corporation (HSC), net revenue amounted to VND 1.4 trillion ($61.6 million), up 34.8% over the previous year. After-tax profit was VND 143 billion ($6.3 million), up 85% and accounting for 63% of total profit.