Ceiling price increase after 11 sessions of deep decline

After 11 consecutive sessions of decline, including 7 floor sessions and 4 deep sessions, on July 29, QCG shares of Quoc Cuong Gia Lai Joint Stock Company rebounded, hitting the ceiling in the context that Mr. Nguyen Quoc Cuong (commonly known by the nickname Cuong Do La) officially became the legal representative, replacing Ms. Nguyen Thi Nhu Loan who was temporarily detained.

In the early morning of July 29, selling pressure continued to increase, causing QCG shares to hit the floor, at 5,890 VND/share. Unexpectedly, bottom-fishing demand appeared, causing Quoc Cuong Gia Lai real estate shares to skyrocket to the ceiling. At the end of the session, QCG maintained its increase to the maximum allowed margin, adding 440 VND to 6,770 VND/share.

Previously, QCG had a series of days of very deep decline, from nearly 18,000 VND/share (April 19) to 6,330 VND/share.

QCG shares had a long streak of price increases from about 8,000 VND/share in early February to about 18,000 VND/share in mid-April, even though this was the time when QCG received bad news, including information that it had to repay nearly 2,883 billion VND received from Ms. Truong My Lan and that the Phuoc Kien project was also subject to seizure.

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Mr. Nguyen Quoc Cuong was appointed CEO of Quoc Cuong Gia Lai, replacing Ms. Nguyen Thi Nhu Loan. (Photo: C-Holdings)

Quite surprisingly, after the above information, QCG shares were sold out again in the session of April 12 and increased sharply in the following 4 sessions. Before that, QCG also had 2 ceiling price sessions. In total, QCG increased sharply from 12,300 VND/share (April 8) to 17,850 VND/share (April 19).

On June 30, Quoc Cuong Gia Lai held the 2024 Annual General Meeting of Shareholders (AGM) unsuccessfully due to Ms. Loan's absence due to health reasons.

Mr. Nguyen Quoc Cuong takes power, what is the prospect of QCG?

On July 23, Mr. Nguyen Quoc Cuong was appointed as the general director to replace his mother. QCG also announced that it will hold its second annual general meeting of shareholders on July 30.

QCG shares increased to the ceiling price again on July 29, in the context that this stock has decreased by about 30% (from 12,250 VND on July 12 to below 6,000 VND in the early morning of July 29) and many investors expect QCG to be able to improve after the General Meeting of Shareholders on July 30 with new CEO Nguyen Quoc Cuong.

With this return, businessman Cuong Do La will have to deal with the problems left by the old leadership.

So what is QCG's financial health and future prospects?

In the first quarter report, QCG recorded a consolidated profit of VND651 million, down more than 28% compared to the same period. In particular, revenue dropped sharply by nearly 77% to more than VND38.7 billion.

Explaining this poor result, Ms. Nguyen Thi Nhu Loan said at that time that revenue and profit decreased due to many difficulties in the real estate market, overlapping legal procedures for projects and still in the process of being revised for completion. Therefore, the procedures for implementing the projects were not resolved.

As a company with a capital scale of more than 2,750 billion VND, QCG has had very modest profits for many years, reaching nearly 3.2 billion VND in 2023, 31 billion VND in 2022... Total assets by the end of the first quarter of 2024 of QCG decreased slightly to 9,515 billion VND. Of which, the value of inventory is more than 7,033 billion VND. The company has 30 billion VND in cash.

Many people expect Mr. Cuong to replace Ms. Loan to be able to revive QCG in the future.

As of the end of the first quarter of 2024, businessman Cuong Do La's business recorded more than VND 5,100 billion in liabilities, of which VND 4,300 billion was in short-term loans and financial leasing debts.

Although he is a member of the Board of Directors and the Board of Management, Mr. Cuong holds very few shares, only 537,000 shares (0.2%), a very small number compared to the 37.05% holding ratio (equivalent to nearly 102 million shares) of Ms. Loan and 14.32% (nearly 39.4 million shares) of her sister Nguyen Ngoc Huyen My or 3.52% (nearly 9.7 million shares) of Ms. Loan's sister Nguyen Thi Anh Nguyet. Mr. Cuong's wife, Dam Thu Trang, does not own shares and has nothing to do with QCG.

Mr. Cuong has been a member of QCG's leadership and board of directors for more than a decade. He was appointed deputy general director in 2006 at the age of 24; in 2008 he joined the board of directors.

During the time Mr. Cuong was in charge of QCG, the "mountain town" enterprise recorded large debts and many violations. QCG was involved in a scandal with the 39-39B Ben Van Don project in 2014. QCG was also involved in a scandal with 2 Phuoc Kien projects, including the "failed purchase" of cheap prime land at nearly 1.3 million VND/m2 at the 32ha Phuoc Kien project, causing the leadership of Tan Thuan Company (under the Ho Chi Minh City Party Committee Office) to be disciplined.

In the past, Quoc Cuong Gia Lai has repeatedly announced incorrect information or delayed the organization of the General Meeting of Shareholders while Mr. Cuong was the person who announced the information for a long time. In June 2022, QCG was also unable to organize the 2022 Annual General Meeting of Shareholders. The 2021 General Meeting of Shareholders was also held 8-9 months later than usual. The 2021 General Meeting of Shareholders was held on the last day of the fiscal year (December 31, 2021).

After leaving Quoc Cuong Gia Lai in 2018, Mr. Cuong built his own career by simultaneously opening companies operating in fields from real estate, restaurants to car wash services. With real estate, Mr. Cuong established Chanh Nghia Quoc Cuong Joint Stock Company, now renamed C-Holdings Joint Stock Company (C-Holdings Company).

In the context of the general difficulties of the real estate market and QCG's own difficulties, shareholders still have the right to hope for the future of QCG under the leadership of businessman Nguyen Quoc Cuong, the answer will soon be available in the near future.

Ms. Nguyen Thi Nhu Loan was arrested, what role did Cuong Do La play in Quoc Cuong Gia Lai? Ms. Nguyen Thi Nhu Loan was prosecuted and detained in connection with the sale of prime land many years ago. When did Ms. Loan's son, Mr. Nguyen Quoc Cuong (Cuong Do La), withdraw from Quoc Cuong Gia Lai and what role did he play in QCG when the takeovers took place?