Businesses record billions of USD in idle cash.

According to 2024 financial reports, many listed companies on the stock market, excluding the banking sector, are holding enormous amounts of cash and deposits.

A surprise has emerged: the market recognizes a new "king of cash." After many years at the top, Vietnam Gas Corporation - PV GAS (GAS) has dropped in rank, replaced by Vingroup (VIC) of billionaire Pham Nhat Vuong.

In 2024, Vingroup recorded a surge in cash and cash equivalents and short-term financial investments, rising from nearly 34 trillion VND at the end of 2023 to nearly 49 trillion VND (approximately 1.9 billion USD). This is considered a rare breakthrough, pushing the gas giant PV GAS down significantly after many years of dominating this position.

Another major real estate company within billionaire Pham Nhat Vuong's ecosystem, Vinhomes (VHM), also recorded a dramatic increase in cash reserves, doubling to over 32 trillion VND.

In second place is the familiar name Binh Son Refinery ( BSR ), this giant recorded a fairly strong increase of 13%, reaching over 43 trillion VND.

Other major corporations that consistently rank in the top 10 in terms of cash reserves include: FPT Group (31 trillion VND), Hoa Phat Group (HPG) (nearly 26 trillion VND), Mobile World Group (MWG) (24.6 trillion VND), Vietnam Airports Corporation (ACV) (26.5 trillion VND), VEAM, Duc Giang Chemicals, Vinamilk, Sabeco (SAB), Masan (MSN), PNJ, BVH...

In particular, many businesses recorded a sharp increase in idle cash. FPT recorded an increase of nearly 28% compared to the end of 2023. MWG increased by 16%...

Conversely, besides PV GAS, HPG recorded a nearly 25% decrease due to investing in production expansion with the large-scale Dung Quat 2 project. ACV also showed a downward trend…

The accumulation of a large amount of idle cash may reflect good business performance and strong cash flow during the year, but it could also reflect two strategies. One is that businesses are being cautious in the face of economic fluctuations. Or, the business is preparing resources to seize major investment opportunities in the future.

Vingroup, MWG, and FPT recorded better cash flow last year, while HPG and ACV are focusing their efforts on major projects (Dung Quat and Long Thanh airport)... ACV recorded a decrease in idle cash from VND 28.8 trillion at the end of 2023 to VND 26.5 trillion at the end of 2024.

Having plenty of money: is it an advantage or a disadvantage?

Assessing the amount of cash available is relative, as it depends on the size of the business. Abundant cash allows businesses to be more proactive in investing, repaying debt, and coping with market risks, as exemplified by Hoa Phat Group's success in overcoming difficulties in 2022-2023, or Vinhomes' ability to launch real estate projects even during challenging times. HPG and ACV's ample cash reserves help ensure the continuation of large ongoing projects.

Having readily available cash also helps businesses quickly seize business opportunities and enhances their financial credibility in the eyes of investors, partners, and credit institutions.

However, holding too much cash without a proper plan for its use can cause businesses to miss out on higher-profit opportunities. Capital utilization efficiency will also be low. Idle cash deposited in banks typically yields lower returns than borrowing.

In the case of VIC, out of 48 trillion VND, the group deposited 42 trillion VND in banks with various maturities and interest rates ranging from 1.9% to 7.1%. This generated several trillion VND in interest income throughout the year.

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A number of companies listed on the Vietnamese stock exchange have recorded a sharp increase in cash reserves, reaching very high levels, even billions of USD. Photo: CV

In fact, most large corporations like Vingroup, HPG, MWG, etc., have very large loans. There are cases where bank deposits encounter problems, such as some deposits at banks undergoing restructuring.

In addition, there may also be some instances of manipulating cash balances by increasing short-term borrowing before the reporting period, transferring short-term investments, recognizing revenue before actually receiving the money, selling assets and leasing them back, etc.

A large amount of cash may not fully reflect a company's financial health. It also depends on the company's asset size, total debt, etc. The cash-to-total-assets ratio is high for some companies such as GAS, BSR, SAB, FPT, PNJ, MWG, and REE. This ratio is low for others such as VIC, VHM, NVL, MSN, and VRE.

Many businesses have reduced cash reserves but good prospects, and vice versa. Some businesses have large cash reserves to accelerate investment progress, such as HPG, VHM, BSR…

Cash is often considered "king," but using it most effectively is what matters. Accumulating large amounts of idle cash isn't always a good thing. Sometimes, economic difficulties cause businesses to delay expansion and investment. Nevertheless, a healthy cash flow is something many businesses aspire to.

Vietnamese tycoons hold billions of dollars in cash, ready to invest in massive projects . Many businesses owned by Vietnamese tycoons hold enormous amounts of cash, reaching billions of dollars. This large sum of money is ready to be poured into ambitious projects.