First Vietnamese company to list in Tokyo aims high

The market capitalization of Hybrid Technologies, an information technology solutions provider that listed last December, was almost 8.17 million yen ($70,900), at the time of the initial public offering.

After the IPO CEO Tran Van Minh had said he would use the money raised to recruit more staff, improve brand recognition, expand markets, and target larger customers.

“The important thing to do now is to increase our company’s value.”

Minh, a former employee of Vietnamese IT giant FPT in Japan, said Japan’s rapidly aging population offers big business opportunities with demand for digital transformation solutions on the rise.

The digital technology segment is expected to grow to nearly 3 trillion yen by 2030, but the country faces a shortage of human resources, he said.

While Hybrid Technologies’ sales and system design are done in Japan, development and programming are done in Vietnam, and over 90 percent of its employees are Vietnamese.

The company is developing IT systems for some 250 customers, including large firms such as Yahoo Japan and DoCoMo, the country’s largest telecom services provider.

It was established in 2016 with capital of VND1 billion, and broke even within three months, Minh said.

After starting with four employees, the head count surged at one time to 700 before Covid hit, and its profits were growing at 200-300 percent a year.

When the pandemic broke out in the first quarter of 2020, the company suffered its first ever losses because 30 percent of its revenues came from airlines, tourism companies, restaurants, and hotels.

“Our company racked up losses of VND7-8 billion a month,” Minh said.

The payroll declined to 500. “It was our biggest loss, losing nearly 200 people.”

But with business remaining steady for other industries and even growing during the pandemic, it actively expanded into new areas.

“Every cloud has a silver lining; the pandemic made the need for digital transformation greater,” Minh said.

Only 0.08 percent of Japan’s 4.21 million businesses were listed on the Tokyo Stock Exchange as of September 2021.

At the time of its IPO, Hybrid Technologies was a five-year-old startup compared to the average age of 19 when Japanese businesses go public. Similarly, Minh was only 36 years old, compared to the average CEO age of 50 at other listed companies.