APEC group stocks are continuously hitting the ceiling price, so should you hold onto them or take profits?

Nearly a year after Mr. Nguyen Do Lang, the "heart and soul" of Apec Group, was embroiled in a scandal regarding stock market manipulation in June 2023, the trio of Apec group stocks have recently attracted attention with soaring trading sessions and consistently high investment inflows.

Notably, API, the stock of Asia Pacific Investment Joint Stock Company, has seen five consecutive days of hitting the upper limit. At the close of trading on May 23rd, the stock increased by 8.86% to 8,600 VND per share. In just the past month, API has increased 2.2 times, from 4,700 VND per share to its current price.

Notably, this stock consistently had no sellers and millions of units of buy orders at the ceiling price. Average liquidity doubled compared to the previous period, reaching approximately 1.2 million units per session. May 22nd saw the highest trading volume with over 4 million shares traded.

This surge coincides with the appearance of Mr. Nguyen Do Lang - former Chairman of Apec Group and former member of the API Board of Directors - at API's Annual General Meeting on May 10th, following a recent controversy.

API price movements over the past year (Source: TradingView).

Within the APEC ecosystem, APS shares of Asia Pacific Securities Joint Stock Company and IDJ shares of IDJ Vietnam Investment Joint Stock Company also had positive trading sessions following Mr. Lang's arrival.

In just one month, IDJ's share price increased by 56.52%, from 4,600 VND/share to 7,200 VND/share. Average daily trading volume exceeded 2.5 million units, with nearly 8 million shares changing hands on May 14th alone.

Similarly, APS also increased by 46.3% from VND 5,300/share to VND 7,900/share in the past month. Average liquidity was approximately 1.4 million units/day, with May 22nd having the highest trading volume at 3.7 million shares.

The price movement of APS over the past year (Source: TradingView).

Is it time to take profits?

According to Mr. Nguyen The Minh, Director of Analysis at Yuanta Vietnam Securities, the reason for the sharp increase in stock prices stems from two issues. Firstly, it concerns the story related to the stock itself. At Apec Group, the stock price had previously fallen sharply due to controversies surrounding the company's leadership. However, after Mr. Lang returned, the stock price rose because the issues were resolved.

Secondly, there's the FOMO syndrome. When a stock hits its upper limit for the third consecutive session, it attracts the attention of investors, causing many to chase the price with FOMO, regardless of the company's business results.

Mr. Minh assessed that the three stocks belonging to the Apec group have the "character" of highly speculative stocks. However, in the coming period, these stocks are likely to move in line with the overall market. Accordingly, after a period of strong market growth and heading towards the previous peak of 1,300 points, the pressure for correction is likely to increase.

Therefore, investors who are day trading hot stocks, in this case the APEC trio, need to be cautious. However, Mr. Minh emphasized that whether to hold or sell depends on the investor's risk tolerance.

Poor business results

Since Mr. Nguyen Do Lang was prosecuted and detained, all Apec-affiliated companies have recorded a sharp decline in business results in 2023. In fact, API and APS even reported losses.

In 2023, API recorded net revenue of over VND 197 billion, a 75% decrease compared to the previous year. After deducting expenses, the company incurred a record after-tax loss of VND 50 billion since its listing, compared to a profit of over VND 121 billion in 2022.

Explaining the above results, API stated that the macroeconomic real estate market during the period was negatively impacted, leading to a sharp decline in demand. In addition, the company's inventory was low, limiting customer choices, and the prolonged negative state of the real estate market also contributed to the decrease in profits.

For 2024, API plans to achieve total revenue of VND 354 billion, with pre-tax profit and after-tax profit at VND 51 billion and VND 38 billion respectively.

At the end of the first quarter of 2024, the company was still quite far from its plan, with consolidated revenue decreasing by nearly half compared to the same period last year, reaching only 34.9 billion VND, equivalent to completing 10% of the target. After deducting taxes and fees, API reported a net loss of 11.7 billion VND, while it had a profit of 4.4 billion VND in the same period last year. This is the fourth consecutive quarter that API has reported a loss; previously, in the fourth quarter of 2023, the company also lost 19.45 billion VND.

For Apec Securities, in 2023 the company recorded operating revenue of VND 435 billion, an increase of 3.3% compared to the same period. However, it incurred a net loss of VND 180 billion due to the revaluation of its proprietary trading portfolio.

For 2024, Apec Securities plans to achieve revenue of VND 123.4 billion, a 71% decrease compared to the same period last year, and after-tax profit of VND 49 billion, a significant improvement from the VND 180 billion loss in the same period. At the end of the first quarter, the company recorded revenue of nearly VND 24 billion, an 81% decrease compared to the same period last year, and only 14% of the plan was completed. After-tax profit was VND 8.1 billion, a 75% decrease compared to the same period last year and only 16% of the target was achieved.

Regarding IDJ, in 2023 the company recorded revenue of over VND 862 billion, a 6% increase compared to the previous year, and pre-tax profit of nearly VND 142 billion, a decrease of over 20%. Over the past year, the majority of IDJ's revenue came from the handover of products from the Apec Diamond Park Lang Son project, the Apec Mandala Wyndham Hai Duong project, and the Apec Mandala Wyndham Mui Ne project.

Regarding its 2024 business plan, IDJ projects revenue of VND 331 billion and pre-tax profit of VND 65 billion, representing decreases of 60% and 54% respectively compared to 2023 results. In the first quarter, IDJ recorded revenue of VND 67.7 billion, a 61% decrease year-on-year and only 20% of the target. Pre-tax profit reached VND 19.2 billion, a 50% decrease year-on-year and only 29% of the target .

Source: https://www.nguoiduatin.vn/co-phieu-api-tang-gan-gap-doi-sau-su-xuat-hien-cua-ong-nguyen-do-lang-a664979.html