Education stocks that have small capitalisation, low liquidity and ill-diversified products have been seriously affected by the COVID-19 pandemic.

The fourth strain of COVID-19 led to prolonged social distancing measures in provinces and cities, especially in HCM City and Ha Noi, which have the largest market shares of educational equipment and products.

Many book stores and stationery stores had to shut down, while businesses were halted. This affects not only suppliers of equipment and stationery for educational activities, but also book publishers.

Phuong Nam Culture Joint Stock Company (PNC) lost VND8.2 billion (US$360,600) in the first half of 2021, although revenue was 1.13 times higher than the same period last year, reaching VND246.3 billion.

Ho Chi Minh City Book Distribution Corporation (FHS), which has more than 110 bookstores in 46 provinces and cities, expects sales to continue to decline, as many stores in the system have to temporarily close.

The COVID-19 pandemic has forced schools in many provinces and cities to conduct distance learning, causing unprecedented difficulties for businesses in the field of education.

Book publishers said they focused on online sales during the social distancing period, but the delivery of products was disrupted because most of the delivery providers had to stop working.

At the same time, applying digital transformation in selling e-books is not easy, they said.

Some leading names in the industry in the education sector still performed well in the first half of 2021.

Ha Noi Education Development and Investment Joint Stock Company (EID) achieved VND499.4 billion in revenue and VND34.7 billion in profit after tax in H1, up by 1.28 times and 1.27 times, respectively.

Phuong Nam Education Development and Investment Joint Stock Company (SED) recorded VND364.6 billion in revenue and VND16.7 billion in profit after tax, 1.53 times and 1.24 times higher, respectively.

Thang Long Star Investment Joint Stock Company (DST) reported VND15.8 billion in revenue and more than VND4 billion in profit after tax, while Southern Book and Educational Equipment Joint Stock Company (SMN) attained VND274.2 billion in revenue and VND5.2 billion in profit after tax.

Thien Long Group Joint Stock Company (TLG) achieved revenue of VND1.43 trillion and profit after tax of VND176 billion in the first six months of 2021, up by 1.27 times and 10 times over the same period in 2020, respectively.

Future worries

Education and training are among the prioritised industries of the Party, State and the whole country. However, many businesses operating in the field of education admit that they are lagging behind the market's needs and requirements.

On the stock market, there are more than 20 businesses operating in the field of education, but most of them are in the field of publishing and stationery products, which are seasonal and highly affected by events such as COVID-19. Therefore, there are few activities to develop specialised educational training associated with technology infrastructure.

Except for Tan Tao University under FPT Corporation, there are very few enterprises on the stock exchange applying technology in education-related services.

There are some businesses starting to apply technology in their English teaching apps or self-study apps, but most of them are just start-up ideas with a modest scale.

In the first six months of 2021, FPT’s education segment revenue increased by 53 per cent compared to the same period last year, reaching VND1.36 trillion. However, FPT leaders themselves admitted that the work in the field of specialised education requires much more effort.

According to many securities companies, the demand for education products will increase sharply in the coming years as the market size increases, but now most businesses prefer stability and have not yet adapted to drastic changes in technology to meet demand. VNS