Despite reporting VND 1.373 trillion (approx. USD 54 million) in outstanding debt and holding just VND 294 billion in cash reserves (approx. USD 11.6 million), Saigon Water (SII) has sparked investor concern after lending more than VND 770 billion (over USD 30 million) to outside businesses - often at interest rates lower than its own borrowings.

According to its audited 2024 financial report, Saigon Water posted a surprise after-tax profit of VND 552 billion thanks primarily to a one-time gain from divesting stakes in Enviro Engineering JSC and Tan Hiep Water Investment JSC. The firm also recorded over VND 660 billion in financial income, with nearly VND 557 billion coming from those share transfers.

While its core business of clean water supply accounted for 95% of its VND 266 billion in 2024 revenue, operational profit remained modest. Saigon Water still incurred VND 65.7 billion in loan interest, VND 14.9 billion in selling costs, and VND 31.3 billion in administrative expenses.

By year-end 2024, Saigon Water had borrowed VND 233 billion from its parent firm, DNP Water, at an interest rate of 10.5%.

Yet the company simultaneously extended large loans to external firms, including:

VND 220 billion to ANA Investment and Development JSC at 11%
VND 160 billion to Binh An An Co., Ltd. at 11%
VND 71 billion to VII Land JSC at 8.5%
VND 50 billion to T&D Vietnam Investment JSC at 8.5%
VND 120 billion to Sai Gon - Pleiku Water Supply JSC at 10.5%

And in early 2025, VND 150 billion to Bao Phuc Business JSC at 11%

Altogether, Saigon Water had lent more than VND 770 billion by early 2025.

The practice raises red flags as the company’s debts continue to mount. As of December 31, 2024, Saigon Water owed more than VND 1.373 trillion, including VND 295 billion in short-term borrowings, VND 465 billion in long-term debt, and VND 493 billion in other long-term payables.

Investors are questioning why the company borrows at steep rates while lending out large sums at lower returns, especially when sitting on high-interest debt and limited liquidity.

Saigon Water’s shareholder structure reveals further complexity. It has two major foreign shareholders - Manila Water (nearly 38%) and VIAC (No.1) Limited Partnership (approx. 10.9%). The company still owes Manila Water over VND 165 billion and VIAC over VND 154 billion in long-term payables.

After several years of losses, SII was delisted from Ho Chi Minh Stock Exchange (HoSE) in May 2023 and now trades on UpCom.

DNP Water and the Saigon Water ecosystem

Founded in 2004, Saigon Water is a notable player in Vietnam’s clean water industry. In 2023, DNP Water acquired a controlling 50.61% stake in SII, becoming its parent company. This followed a major share purchase of 20.4 million shares based on an extraordinary general meeting resolution.

DNP Water, a member of DNP Holding, has also been active in corporate bond issuance. In December 2023, it issued four bond tranches totaling VND 300 billion with interest rates of 11% and terms between 12 and 38 months. DNP Water had previously issued and redeemed VND 300 billion worth of bonds in 2020.

In 2023, DNP Water posted a profit of VND 247 billion but still carried an accumulated loss of VND 81 billion.

DNP Holding - linked to business leader Vu Dinh Do until his resignation in May 2024 - is a key player in both plastics and clean water. Do retained a 10.75% stake in DNP Holding as of year-end 2023.

The leadership of Saigon Water reflects heavy DNP influence. Hoang Minh Hung serves as both Chairman of Saigon Water and CEO of DNP Water. Meanwhile, Leu Manh Huy is CEO of Saigon Water and Deputy CEO at DNP Water. Ngo Duc Vu, Chairman of DNP Water, is also Vice Chairman of DNP Holding.

Adding to the puzzle, VII JSC - owner of nearly 15.7% of DNP Holding - shares a near-identical name with VII Land JSC, one of Saigon Water’s borrowers.

Manh Ha