Saturday, 18 Nov 2017

Brand valuation, a shortcoming to be overcomed in SOEs restructuring

Updated at Thursday, 06 Jul 2017, 10:42
The Hanoitimes - Brand name is considered the core value of a business, as a brand can value of up to 70% of total assets. In Vietnam, most enterprises are still unable to assess fully their brand values, leading to undue obstacles in the development process.
At the seminar on Building, Developing, Valuing and Protecting Business Brand held on July 4, a representative from the Department of Corporate Finance under the Ministry of Finance said that many consulting businesses  involving in  the value assessment of   to-be-sold state  enterprises are still confused about the valuation of the brand.

Vietnamese enterprises unable to assess their brands

Many Vietnamese brands are among the world tops  such as VietinBank, Viettel, MobiFone. VietinBank has stepped up to the top 400 global brand names with a brand value of $249 million in 2016 according to  Brand Finance. Viettel’s brand value reached USD$2,686 billion, Vinaphone’s is USD$1.04 billion and MobiFone’s is valued at  USD$391 million.
MobiFone Vietnam ranks top in the world’s brandnames
MobiFone Vietnam ranks top in the world’s brandnames

According to  Dang Quyet Tien, the Deputy Director of the Department of Corporate Finance, many Vietnamese enterprises have not adequately assessed their band values, causing unnecessary obstacles in the development process.

The lack of brand values assessment have incurred many disadvantages to enterprises during the process of integration.  Many Vietnamese enterprises are able to manufacture  high-quality products but sold under foreign brand names in international market as they lack brand name assessment strategy. Other businesses, on the other hand, are  strongly investing in their brand names but unable to   assess the value of this intangible asset, eventually throwing their money out of the window. “As a result, the state will suffer losses  when selling state own enterprises. Enterprises are also in disadvantageous positions  as they enter a time of competition, franchise, merging and acquisition due to poor awareness on branding.” Tien said.

Lack of legal regulations

Many private Vietnamese enterprises do not pay attention to the value or franchising. According to economic experts,  the insufficient legal provisions in Vietnam on this issue is the main cause of the situation. Many regulations in Vietnam are not compatible to international practices with regard to intangible assets in general or the brand in particular, experts said.

 According to the State own enterprises  restructuring plan, may SOEs  will divest their capital, including equity shares of brand value. However, the withdrawal of capital contributed by the brand value is not guided by the Government or any other agencies, making the process of divestiture difficult.

To deal with this problem, representatives of the Department of Corporate Finance proposed that the State Securities Commission should work  with the Ministry of Planning and Investment (MPI) soon to develop guidelines allowing enterprises to withdraw capital contributed by  brand value.

Ngoc Thuy
(Nha Trang -
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