Which door was open to the Gia Lai land tycoons of that day?

Profit differentiation, Mr. Duc's businesses "strive"

Hoang Anh Gia Lai (stock code: HAG), Quoc Cuong Gia Lai (stock code: QCG) and Duc Long Gia Lai Group (stock code: DLG) all started from small wood workshops in Gia Lai (old) several decades ago. After many years of ups and downs, the development of each enterprise to date is clearly different.

The most typical is the rise of Hoang Anh Gia Lai, associated with the story of investing in the agricultural sector. From pigs and banana trees, Mr. Duc's company has grown with revenue and profit of thousands of billions of VND from 2023 to 2024 and is expected to continue to maintain growth momentum this year. In the first half of the year alone, Hoang Anh Gia Lai achieved net revenue of 3,707 billion VND, after-tax profit of nearly 880 billion VND, up 34% and 76% respectively over the same period last year.

Riding on the momentum, Hoang Anh Gia Lai is ready to adjust its business plan for the whole year. Accordingly, the new plan is for net revenue of VND7,100 billion and after-tax profit of VND1,550 billion, up 29% and 39% respectively compared to the previously set targets. If the new plan is implemented, the company will achieve its highest profit in 15 years.

The rapid increase in profits over the past 2.5 years has helped Hoang Anh Gia Lai officially erase its accumulated losses on June 30. According to the report, the company's accumulated profits were over 409 billion VND, officially erasing the "pain" that has been suffocating Mr. Duc for the past decade.

The captain also declared that he wanted to lead the group back to its golden age in 2008 based on the expectation that from now on Hoang Anh Gia Lai will grow, be stable, and not diversify.

Meanwhile, Quoc Cuong Gia Lai is also gradually arranging capital and taking back the vital Bac Phuoc Kien project related to the Van Thinh Phat case.

Quoc Cuong Gia Lai's second quarter financial report shows that the company paid 100 billion VND to Van Thinh Phat. The semi-annual audited financial report stated that on July 3, the company paid another 500 billion VND to the Ho Chi Minh City Civil Judgment Enforcement Department. In total, the company paid 600 billion VND in 2 payments. The remaining amount to be paid is 2,283 billion VND.

According to Quoc Cuong Gia Lai's plan, debt repayment will take place over about 2 years, starting from the third quarter of this year and ending in the first half of 2027. If cash flow is stable, the company can pay earlier.

Enterprises are also focusing on payment cash flow, with solutions such as handling inventory, divesting hydropower projects, selling products at the Marina Da Nang project...

The company’s business results also improved significantly in the first half of the year. Net revenue reached nearly VND243 billion, nearly four times higher, and after-tax profit was more than VND10 billion, much more positive than the loss of nearly VND17 billion in the same period last year.

However, this year, Quoc Cuong Gia Lai set a big plan with a target of net revenue of VND2,000 billion and pre-tax profit of VND300 billion, increasing by 274% and 306% respectively compared to the previous year. Although the business results have improved, after half a year, the company has only achieved 12% of revenue and 7% of profit.

As for Duc Long Gia Lai, the first half of the year's business results also showed positive changes when after-tax profit increased by 13% to nearly VND69 billion. The company said that production and business activities during the period were positive, with income from selling commercial electricity and BOT toll stations both increasing.

However, the accumulated loss of more than VND 2,411 billion still weighs heavily on the enterprise's shoulders, causing DLG shares to not be able to escape the warning status.

Auditor's concerns

Despite their efforts, all three Gia Lai real estate giants have one thing in common: their semi-annual audited financial reports all recorded doubts about their ability to continue operations from auditors.

For Hoang Anh Gia Lai (stock code: HAG), auditor Ernst & Young Vietnam still noted that the group's short-term debt exceeded short-term assets by more than VND2,767 billion.

On the same issue, at Quoc Cuong Gia Lai, as of June 30, the total short-term assets of the enterprise were 1,844 billion VND while short-term debt was nearly 3,815 billion VND (of which the main debt was 2,783 billion VND related to Van Thinh Phat).

Similarly, at Duc Long Gia Lai, in addition to the accumulated loss of VND2,411 billion, the auditor also emphasized that the company's short-term debts exceeded its total short-term assets by nearly VND530 billion.

However, Duc Long Gia Lai's Board of Directors affirmed that the business situation is gradually stabilizing and improving and believes that the preparation and presentation of the first half financial report on the basis of continuous operation is appropriate.

Specifically, in the first half of the year, the company's operating cash flow continued to be positive. The company restructured its business, contributing to reducing accumulated losses; paying principal and interest of more than VND207 billion to banks.

The Board of Directors is still in the process of negotiating a plan to extend debt repayment to banks for the period 2025-2026 as well as other due payables. Most of the overdue debts with credit institutions have collateral.

At the same time, the company's board of directors also proposed a plan to improve business operations such as investing and cooperating in effective businesses and projects; handling collateral and guarantees so that the company can continue operating.

As for Hoang Anh Gia Lai, the group said that cash flow in the next 12 months is expected to come from liquidating part of financial investments, liquidating assets, recovering loans from partners, along with sources from issuing individual bonds, bank credit and debt restructuring plans.

Hoang Anh Gia Lai is also working with lenders to adjust the default terms and seek shareholder approval for a plan to convert part of the debt into equity.

This year, banana and durian export business continues to bring in large cash flows. The Board of Directors still prepares financial statements on the basis of meeting the going concern assumption.

As for Quoc Cuong Gia Lai, the auditors doubted its ability to continue operations related to the short-term debt of VND3,184 billion exceeding short-term assets, caused by the debt to Van Thinh Phat of VND2,783 billion.

The company said it is still implementing procedures to complete the legal documents of the Bac Phuoc Kien Residential Area project according to current regulations, in parallel with implementing compensation and site clearance for the remaining area.

The Enforcement Agency is seizing assets which are some original documents of compensation for site clearance of the project to serve the purpose of ensuring enforcement of the judgment related to the amount of 2,783 billion VND.

To ensure reasonable comparison figures according to regulations, the company temporarily reclassified and presented "short-term unfinished business production costs" with a value of VND 5,401 billion to "long-term unfinished business production costs" on the consolidated balance sheet when preparing the consolidated financial statements for the first half of the year.

After the company temporarily reclassified and presented “short-term unfinished business costs” (as explained above), short-term debt was greater than short-term assets, leading to information on going concern operations. On the other hand, in the first half of the year, the company’s after-tax profit was positive at VND10 billion; equity was positive at VND4,586 billion.

Quoc Cuong Gia Lai affirms that the production and business situation is stable. The enterprise still ensures payment of due debts and maintains the ability to operate continuously in the future.

What is the future?

After the accumulation, Hoang Anh Gia Lai is facing a new door, with another part of the work that needs to be improved: the debt burden. Mr. Duc once determined to pay off all debts by 2026, after being drowned in debt for a decade, being "despised by people", as he confided in an investor meeting in 2024.

Recently, Hoang Anh Gia Lai has a plan to restructure its debt by issuing 210 million shares to convert existing debt from BIDV Bank to the group of Huong Viet Investment Consulting Joint Stock Company and individuals.

As of June 30, Hoang Anh Gia Lai's total debt was nearly VND7,000 billion. If the debt swap is successful, the remaining debt will be about VND5,000 billion.

Bau Duc and Hoang Anh Gia Lai recovered after a decade of difficulties with unexpected short-term crops to create cash flow and escape the crisis.

From banana trees, Mr. Duc has repeatedly announced different pivot strategies such as "2 trees, 2 animals" (banana, durian, pig, chicken) then "2 trees, 1 animal", "4 trees, 1 animal" (banana, durian, coffee and pig). Recently, Mr. Duc has also focused on mulberry and coffee, aiming to plant 4,000 hectares of Arabica coffee and 2,000 hectares of mulberry for silk, aiming for export.

Mr. Duc explained that Arabica coffee costs about 9,000 USD/ton, twice as much as regular coffee, and Vietnam only has 10% of the area planted with this type.

Chairman of Hoang Anh Gia Lai expects that mulberry and coffee have short cultivation and harvest times (mulberry 7 months, tea coffee 2 years - only 1/3 of durian's time), easily creating continuous cash flow.

As for Quoc Cuong Gia Lai, this company is promoting measures to create cash flow, pay off debt with Van Thinh Phat and take back the Bac Phuoc Kien project. In the first half of this year, the company has released nearly 100 billion VND of real estate inventory.

The Marina Da Nang project was also restarted earlier this year, with complete legal documents and a sales license, expected to earn 700 billion VND. The divestment plan for hydropower projects will also continue to be implemented, expected to earn 900 billion VND. In the future, Quoc Cuong Gia Lai will move towards changing the company's name, aiming for international cooperation.

One of the solutions that Duc Long Gia Lai hopes to increase revenue and profit in the coming periods is to accelerate the completion of legal documents for renewable energy projects (solar power, wind power, hydropower) to be added to the National Grid Planning to attract investment capital. Recently, the group has approved the contribution of more than 430 billion VND in capital to establish 4 energy companies in the third quarter.

Source: https://dantri.com.vn/kinh-doanh/canh-cua-nao-cho-cac-dai-gia-dat-gia-lai-ngay-do-20250916080834854.htm