Profits plummet, Con Cung sells goods at 10 times higher prices, "pickpocketing" consumers

According to the Hanoi Stock Exchange (HNX), Con Cung Investment Joint Stock Company periodically announced information on its financial situation in 2022 (reporting period from January 1, 2022 to December 31, 2022) with a profit after tax in 2022 of nearly VND 4.7 billion, down 95% compared to the profit of nearly VND 90 billion in 2021.

As of December 31, 2022, Con Cung Investment's equity reached nearly VND 730 billion. Correspondingly, the after-tax profit margin on equity (ROE) fell sharply from 12.38% to only 0.64%. The debt-to-equity ratio increased sharply from 2.56 times at the end of 2021 to 3.55 times at the end of last year. Correspondingly, the total debt of this enterprise increased by VND 588 billion, to VND 2,444 billion, but there was no outstanding bond debt.

In 2021, Con Cung Investment has mobilized many bonds. In mid-January 2021, this enterprise successfully mobilized two bond lots with codes CCIH2122001 and CCIH2122002 with a total value of 115 billion VND, interest rate of 11%/year. Both of these bond lots matured in 2022, of which CCIH2122001 matured in January 2022, and CCIH2122002 matured in July 2022. Previously, in June 2019 and July 2020, Con Cung Investment also issued bonds twice with a total value of more than 137 billion VND, with interest rates of 11%/year.

Not only was Con Cung's business at a loss, it was also involved in a scandal involving the sale of products that were not registered for retail price declaration, with prices nearly 10 times higher, causing public outrage. Despite being reported for violations, the company's stores and online shops still brazenly sold the above products.

Reporters from the Journalist & Public Opinion newspaper recently reported on this incident. Specifically, many products show signs of violating the law on registering and declaring retail prices, with prices dozens of times higher than import prices in the articles "Imported at cheap prices, but a series of functional foods for children are 'inflated' in price thanks to the imported label"; "Penalties are not enough to deter, Con Cung still sells violating products regardless of customer damage"...

Reporters from the Journalists and Public Opinion newspaper met and talked with many customers who bought products with unlisted prices at Con Cung stores. All were surprised by the news that many of Con Cung's products were reported by the press to be illegal and had their prices raised many times over. Even after being reported by the press, Con Cung still ignored it and the products were still displayed on shelves, "carelessly" picking the pockets of customers.

The reporter even contacted the media department of this chain of stores many times to find answers about the process of handling, verifying and recalling the products. However, Con Cung seems to be deliberately silent, leaving the answer to this issue unanswered, with no feedback on the incident.

Through discussions with experts and lawyers on this issue, many opinions say that the reason why Con Cung still "closes its eyes" to sell products without declaring prices, forcing customers to buy at 10 times the price is because the sanctions are still light compared to the benefits gained.

Because, with the fines and corrective procedures as prescribed, when compared with the profits that mother and baby store chains like Con Cung can receive when selling overpriced products, it is truly a drop in the ocean.

Perhaps for that reason, up to now, Con Cung chain stores continue to sell products that show signs of violation. They even ignore the warnings sent to them without any feedback or measures to handle the violations that cause public outrage.

Origin of Con Cung Investment

Con Cung Investment was established on September 25, 2015, with three founding shareholders: Luu Anh Tien, Le Thai My Linh and Nguyen Quoc Minh (currently Chairman of the Board of Directors and legal representative of CCI). The company's main activities are market research and public opinion polling; located in Thu Dau Mot City, Binh Duong Province.

Con Cung Investment's initial charter capital was VND26.25 billion, of which foreign capital accounted for more than 33.4%. After many capital increases, this enterprise has increased its charter capital to more than VND33.5 billion. Of which, foreign capital accounts for 49.36% with investors including Daiwassiam Vietnam Growth Fund II LP holding 9.13% of capital, Felix Investment Holdings Pte. Ltd. 31.4% and Mr. Lee Young Hoon 8.83%.

Con Cung Investment is the parent company of 3 legal entities including Con Cung Joint Stock Company, Liam Trading Joint Stock Company and Sakura Group Joint Stock Company. In which, the core is Con Cung with a charter capital of 358 billion VND, chaired by Mr. Nguyen Quoc Minh, specializing in developing retail chains for mothers and babies such as Con Cung, Toycity, CF (Con Cung Fashion).

In early 2022, Con Cung received an investment of 90 million USD from Quadria Capital fund. After that, Con Cung launched a new business model Super Center, with the first store located in the "golden land" of Phu Dong 6-way intersection, District 1, Ho Chi Minh City.

Currently, the number of Con Cung stores, including 708 Con Cung, Toycity and CF supermarkets in more than 50 provinces and cities nationwide, is mainly concentrated in Ho Chi Minh City (207 supermarkets), Dong Nai (61 supermarkets) and Binh Duong (59 supermarkets). Con Cung aims to open 2,000 stores and own 200 - 300 Super Centers by 2025.