Econ
Brand valuation, a shortcoming to be overcomed in SOEs restructuring
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.
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.
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
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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.
