VKC Holdings Pivots to Garment Manufacturing, Plans 9x Capital Increase

Overview

VKC Holdings, a Vietnamese cable and wire manufacturer, has announced a radical strategic pivot to garment manufacturing. The company plans to increase its charter capital ninefold, borrow VND 3,000 billion, and build a large-scale garment factory in Lam Dong province. The move follows the appointment of Do Thanh Nhan, a former market manipulator, to the board of directors. The new factory targets exports to Europe, North America, and Japan starting in 2028.

Key Facts

• VKC Holdings plans to increase charter capital from VND 200 billion to VND 1,900 billion by issuing 170 million shares to Thien Hoang Holdings, a company linked to Do Thanh Nhan.
• The company intends to borrow an additional VND 3,000 billion, prioritizing bank loans.
• A new garment factory in Lam Dong province will have a design capacity of 80 million products per year and employ 12,000 workers.
• Total investment for the factory is estimated at VND 7,600 billion.
• The company targets commercial production for export to Europe, North America, and Japan by 2028.
• VKC Holdings has posted losses for four consecutive years, with accumulated losses of VND 516 billion and negative equity of nearly VND 300 billion as of end-2023.
• The company plans to divest from two subsidiaries, including its core plastic cable production unit, via auction.

What Happened

VKC Holdings, formerly known as Vinh Khanh Plastic and Rubber Private Enterprise, has been a cable and wire producer since 1993. At its annual general meeting in late June, the company elected Do Thanh Nhan to the board of directors. Nhan, born in 1981 in An Giang, previously chaired several listed companies and was sentenced to four years in prison for stock market manipulation in 2021-2022. His return has triggered a sweeping transformation.

The company has approved the divestment of two subsidiaries, including its plastic cable manufacturing unit, to restructure operations. It has added new business lines and plans to rename itself Velora Garment Group. The centerpiece is a garment factory in Lam Dong with a capacity of 80 million products annually, targeting children’s and adult fashion. Management expects the factory to begin operations in the second half of 2025 and start commercial production for export by 2028. Revenue is forecast to reach VND 14,300 billion by 2035.

Market Context

VKC shares closed at VND 1,300 on June 28, 2026, up 8.33% on volume of 249,400 shares, trading on the UPCOM exchange. The stock has been under pressure due to the company’s prolonged losses and negative equity. The pivot to garment manufacturing, a sector with strong export growth and tariff advantages, may offer a turnaround narrative, but execution risks are high given the company’s financial distress and the controversial background of its new leader.

Strategic Significance

The shift from cable manufacturing to garment production represents a complete strategic overhaul. The garment industry in Vietnam benefits from free trade agreements and growing global demand, but it is also highly competitive with thin margins. VKC’s plan to build a massive factory with 12,000 workers and target premium export markets suggests an ambition to scale quickly. However, the company’s weak financial position, including negative equity and reliance on related-party share issuances and debt, raises questions about funding and governance. The involvement of Do Thanh Nhan, with his prior conviction, adds regulatory and reputational risk.

What to Watch

• Completion of the share issuance to Thien Hoang Holdings and the resulting ownership structure.
• Progress on legal approvals and land acquisition for the Lam Dong factory.
• Q2 2024 earnings report to assess current cash flow and debt levels.
• Any regulatory scrutiny related to Do Thanh Nhan’s role or the related-party transactions.
• Export orders or partnerships announced with European, North American, or Japanese buyers.