Becamex BCE shares suddenly increase when the business suffers losses

Despite its loss-making business, the stock price of Binh Duong Construction and Transport Joint Stock Company (Becamex BCE) unexpectedly increased by nearly 60% in nearly 3 months, thanks to expectations of cooperation in implementing the Green City Binh Duong individual housing project.

Becamex BCE shares unexpectedly rise as business suffers losses

Despite its loss-making business, the stock price of Binh Duong Construction and Transport Joint Stock Company (Becamex BCE) unexpectedly increased by nearly 60% in nearly 3 months, thanks to expectations of cooperation in implementing the Green City Binh Duong individual housing project.

BCE stock price soars

The end of 2024 - the beginning of 2025 witnessed a gloomy trading market, record low market liquidity and many stocks were sold heavily, leading to a depressed sentiment in the market. However, Becamex BCE's BCE stock suddenly attracted cash flow and increased sharply, although the business situation had not improved.

In particular, statistics from October 25, 2024 to January 10, 2025, BCE shares increased by 59.6%, from VND 5,640 to VND 9,000/share. During the same period, VN-Index decreased by 1.8%, to 1,230.48 points and market liquidity decreased sharply.

In fact, BCE shares have gone against the recent market trend mainly based on the expectation that the Company will cooperate with the Industrial Development and Investment Corporation - JSC (Becamex IDC) to implement the Green City Binh Duong individual housing project with a scale of 199,294 m2, providing the market with 1,355 houses, the total expected cooperation value is VND 1,426.1 billion and is expected to be handed over and put into use by the end of 2025.

According to research, the above project is invested by Becamex IDC, with products supplied to the market including villas, townhouses, and shophouses in Hoa Loi resettlement area (Thu Dau Mot city, Binh Duong province).

Becamex BCE was established in 2002, with an initial charter capital of only VND 7 billion and by the end of the third quarter of 2024, the only major shareholder is Becamex IDC, owning 44.4% of the charter capital. In the initial phase, Becamex BCE's main activity is to carry out construction projects related to Becamex IDC.

However, in recent years, Becamex BCE has become the investor of a series of projects such as commercial housing - service for workers in Bau Bang Industrial and Urban Park (Binh Duong); commercial housing - service for workers project in Chon Thanh district ( Binh Phuoc ) ...

Becamex BCE peaked its profit in 2019, with VND37.18 billion, then continued to decline. In 2022, the company recorded a loss of VND58.4 billion, then a slight profit of VND0.8 billion in 2023 and in the first 9 months of 2024, it continued to lose nearly VND26 billion.

With business losses returning in the first 9 months of 2024, as of September 30, 2024, Becamex BCE only had 28.5 billion VND in cash, while total debt was 89.2 billion VND.

It is known that Becamex BCE is facing many financial problems, as its business is losing money. As of September 30, 2024, the Company recorded an accumulated loss of VND 64.6 billion, equivalent to 18.5% of its charter capital; its asset size from December 31, 2019 to September 30, 2024 decreased by 28.3%, equivalent to a decrease of VND 241.9 billion, to VND 614.2 billion. Of which, short-term receivables from third parties alone amounted to VND 355.3 billion, accounting for 57.8% of total assets.

Despite the loss in the first 9 months of 2024, Mr. Nguyen Kim Tien, General Director of Becamex BCE, said that the Company will continue to expand and develop real estate projects, promote the issuance of land use rights and housing certificates for customers such as commercial housing projects for workers in Becamex - Binh Phuoc Industrial Park; R2A Ecolakes infrastructure project; construction of Bau Bang commercial housing for workers in Lai Uyen town, Bau Bang, Binh Duong; construction of infrastructure projects invested by Becamex IDC.

BCE stock valuation is no longer cheap

Returning to stock price movements, recently, after a series of hot increases, BCE stock has been trading in the overbought zone for a long time, and has shown signs of accelerating growth over the past two weeks.

Regarding valuation, because Becamex BCE is making a loss, it is not possible to use conventional valuation, but must use the valuation method based on P/Cash Flow (stock price per cash flow). In particular, according to data on iBoard of SSI Securities, the current P/Cash Flow of BCE stock is 54.48, much higher than the daily average of only minus 4.98. This shows that BCE stock valuation compared to the industry is not cheap.

Previously, due to declining business, Becamex BCE canceled the approved plan to pay 2021 dividends at a rate of 5% (about 17.5 billion VND) to cover losses in 2022, and did not pay dividends in 2022 and 2023.

Furthermore, regarding the new capital raising plan, although Becamex BCE planned to increase its charter capital from VND 350 billion to VND 700 billion to supplement capital for production and business activities, later, due to business losses and plummeting stock prices, the Company was unable to increase its capital as initially expected.

It can be seen that Becamex BCE is facing many difficulties in business since entering the real estate sector, and is also facing difficulties in its new capital raising plan, so it is not easy to mobilize capital to invest in new projects with Becamex IDC.

Source: https://baodautu.vn/co-phieu-cua-becamex-bce-bat-ngo-tang-cao-khi-doanh-nghiep-kinh-doanh-thua-lo-d240598.html