How is F88 of owner Phung Anh Tuan doing?

Police search scene of F88 company in Ho Chi Minh City.

F88 Trading Joint Stock Company was established on June 30, 2013, headquartered in Hanoi, with Mr. Phung Anh Tuan (a famous hacker) as Chairman and CEO of the company. This pawnshop system has received capital from two large investment funds in the world , Mekong Capital and Granite Oak.

According to the introduction, F88, in addition to providing super-fast loan services by car/car registration, motorbike/motorbike registration, phone, laptop..., also provides many other convenient financial services such as insurance, money transfer, payment, collection of electricity, water, internet bills...

F88 has more than 800 stores and points of sale nationwide. (Photo: Internet)

In early 2017, the F88 pawn shop chain began to attract media attention after the Mekong Enterprise Fund III (“MEF III”) announced the completion of its investment in the company.

Receiving a large amount of investment capital, Mr. Phung Anh Tuan began to develop a rapid development strategy by accelerating the opening of new locations with the goal of 300 stores by 2021.

In 2018, F88 continued to receive additional capital from the Granite Oak fund with a valuation of up to 1,000 billion VND. The capital was used to implement the "Southward expansion" plan, opening 50 new stores in Ho Chi Minh City.

In June 2019, after a series of deals from foreign investors, the shareholder structure of F88 Investment JSC - the parent company of F88 Business JSC was revealed.

Of which, foreign shareholders hold up to 53.4% ​​of shares, including: MEF III owns 39.6%, Bronze Blade Limited owns 12.2% and James Alan Barron - former CEO of First Cash Group with 2,000 pawn shops in the US, owns 1.6%. The remaining 46.6% of shares are domestic, of which Mr. Tuan owns 20% of shares.

In 2019, to continue to have more money to invest in opening new locations, Mr. Tuan and the company's board of directors decided to issue 100 billion VND in bonds. Right in this first offering, it attracted many interested investors.

Since then, bonds have been considered the most used capital mobilization channel by F88, earning thousands of billions of VND. In 2020, F88 earned 300 billion VND and in 2021, it earned 1,550 billion VND from bonds.

In 2022, the F88 pawn shop chain not only raised capital from bonds but also borrowed more from foreign organizations. In November 2022, the company announced the completion of a loan of 50 million USD from CLSA Capital Partners (HK) Limited (Lending Ark) through Lending Ark Asia Secured Private Debt Funds and this loan was secured. At the same time, Mr. Phung Anh Tuan's business also successfully borrowed 10 million USD from Lendable - a financial group headquartered in London.

Previously, the group also disbursed 10 million USD to the F88 pawn system in early 2022.

Although the speed and scale of capital mobilization of enterprises are increasing, the F88 system has only started to record positive profits since 2018.

According to the business results of 2016 - 2017, the F88 pawn shop chain system had strong revenue growth but still made a loss.

Specifically, revenue in 2017 recorded 23.05 billion, 5.4 times higher than 4.28 billion of the previous year. Due to the high cost of business management, the pre-tax loss was 9.2 billion and increased to 27.8 billion in 2017.

By 2018 - 2019, falling into the period after the 2018 World Cup season, revenue continued to grow exponentially, recording 63.89 billion and 215.7 billion VND.

At this time, F88 company has escaped the situation of operating below cost price, starting to have the first gross profit. However, because the cost of business management and interest is still too large, the net profit from F88's business activities is still negative.

Thanks to other income, the company's after-tax profit has improved to positive numbers, respectively 2.69 billion and 19.2 billion VND. During this period, the company's assets increased from 68.8 billion to 606 billion VND, but the majority of the total assets structure is short-term receivables.

Although the revenue on the books has increased continuously, the money received is low, so the F88 pawn chain has to borrow money to be able to turn around capital. If in 2017 the short-term debt was only 2.6 billion, by 2019 it had increased to 200.9 billion, in order to meet the growth target of 300 stores by 2021.

In 2020, when the COVID-19 pandemic began, F88's revenue still maintained a growth rate of more than 260%, reaching VND 578 billion, with after-tax profit 2.7 times higher than the same period at VND 44.8 billion. Although it continued to grow, business results did not meet initial expectations, only completing 68% of revenue and nearly 12% of after-tax profit compared to the plan.

But besides that, there are still some optimistic results such as: completing the target of 300 transaction offices 1 year earlier than the set vision, the ratio of profit after tax/equity (ROE) increased from 8.98% last year to 13.08%.

In 2022, within just 9 months, F88 recorded revenue of up to 1,310 billion VND, of which the insurance business brought in 217.5 billion VND and 42% of insurance contracts were sold independently from loans. With a stable cost-to-income ratio (CIR) of 78%, F88 achieved a net profit of about 60.7 billion VND in the first three quarters of the year, achieving an ROE of 10.3%.

Due to the continuous issuance of bonds and borrowing from foreign organizations since the beginning of the year, the company's debt/equity ratio is recorded at a high level. As of the third quarter of 2022, F88's total adjusted outstanding loans were nearly VND3,358 billion. During this period, F88 said it recorded a 246.4% increase in outstanding loans compared to the same period last year.

At the end of 2022, the company also successfully raised a secured loan worth 50 million USD, equivalent to 1,200 billion VND, from CLSA Capital Partners (HK) Limited (Lending Ark) through Lending Ark Asia Secured Private Debt Funds and an additional 10 million USD, equivalent to 240 billion VND, from Lendable.

Thus, in the whole year of 2022, F88 successfully raised 70 million USD from two international financial institutions in Asia and Europe. F88's goal is to IPO in 2024, when the number of transaction offices of the unit will reach 1,400 and the enterprise capitalization will reach 1 billion USD.

Thanks to strong business growth, Mr. Phung Anh Tuan has the ambition to list shares on the HOSE with a capitalization of billion USD by 2024.

On the morning of March 6, at Van Phon Tower building (Nguyen Oanh street, Go Vap district, Ho Chi Minh City), Ho Chi Minh City police carried out a blockade and search of F88 Trading Joint Stock Company. This move was carried out after a period of time when Ho Chi Minh City Police coordinated with Go Vap District Police to investigate and record reports that F88 Trading Joint Stock Company was conducting lending activities to extort property. Currently, F88 Company is lending at interest rates ranging from 1,500 to 2,000 VND/1 million/day (equivalent to 4.5 - 7.5%/month or 54 - 90%/year). On the afternoon of March 6, Ho Chi Minh City Police coordinated with the professional departments of the Ministry of Public Security to search many branches of F88 Company in Ho Chi Minh City. During the inspection, the police seized many documents, records and machines. The case is still under investigation by the police.

Thanh Lam (synthesis)