XDC stock, which once increased dozens of times in price in 1 month, has just been put on warning status.

XDC stock, which once increased in price dozens of times, has just been put on warning list by HNX.

Recently, the Hanoi Stock Exchange (HNX) has put XDC shares of Tan Cang Construction Joint Stock Company, the "most expensive stock" on the Vietnamese stock exchange, under warning from July 13, 2023 because this unit has not yet held the 2023 Annual General Meeting of Shareholders.

Within 15 days from the date the stock is put on warning list, XDC must send a written explanation to HNX about the above incident as well as propose a solution.

Not only has the stock code XDC been put on warning by HNX, it is also attracting great attention from many investors because this unit has witnessed a series of consecutive stock price increases within 2 months while its business results are nothing special, if not to say they are going backwards.

Stocks hit the ceiling continuously, price increased 63 times in just 2 months

Regarding the price movement of XDC shares of the Corporation, this stock code once reached 999,900 VND/share on the UPCoM floor, surpassing the most expensive stock on the Vietnamese stock exchange, VNZ.

In the last 35 consecutive trading sessions, XDC code recorded 28 ceiling price sessions. This series of ceiling price increases helped push the stock price from VND 15,500/share on April 24, 2023 to a peak of VND 999,900/share on June 29, 2023. Since then, this stock code has not generated any additional transactions.

XDC shares have increased in price dozens of times in the past 2 months and have just been put on warning screen, picture 1 — Business has gone down for 4 consecutive years, but XDC shares still increased in price 63 times in just 2 months (Photo TL)

Thus, in just 2 months, XDC stock price has increased 63 times compared to the price on April 24, 2023.

Despite the ceiling price increase, XDC's liquidity is actually extremely low. XDC stock transactions are small, with only a few hundred shares traded per transaction. This reflects investor indifference despite the stock's continuous price increase.

Business has declined for 4 consecutive years, but stock prices continue to increase abnormally.

In fact, Tan Cang Construction's business results reflect a picture completely opposite to the stock's meteoric rise.

Specifically, in the last 4 years from 2019 to 2022, XDC shares have declined in both revenue and profit. Net revenue in 2019 reached 523 billion VND, down to only 279.8 billion VND in 2022. Thus, XDC's revenue has decreased by nearly half in just 4 years of business.

The company's after-tax profit also had a similar development, decreasing gradually each year and only reaching 7.6 billion VND in 2022. Compared with the target plan for 2022, XDC has only completed 65.7% of the revenue plan and 76.7% of the annual profit plan.

The company's management explained the decline in revenue as being due to the impact of the Covid-19 pandemic, which caused construction site operations to stagnate. XDC's projects will only resume normal operations in the second quarter of 2023.

In terms of asset structure, by the end of 2022, XDC's total assets were recorded at VND 228.7 billion, down about 4.3% compared to the beginning of the year. Of which, a large part of the assets are in the form of receivables, accounting for VND 172.2 billion. It should be noted that assets in the form of receivables mean that these are assets that are only recorded on paper and XDC has not actually received the money.

The recorded receivables from customers in 2022 at XDC increased from 140.1 billion to 162.6 billion VND. The most significant receivables were 63.7 billion VND from the Navy Command; LB Vietnam Construction JSC with 36.3 billion VND; Hung Thanh Phat Production, Trading, Import-Export Services and Construction LLC with 13.6 billion VND.

Regarding the capital structure, XDC has payable debts accounting for 138.7 billion VND, equivalent to 60.6% of total capital. The amount of money that buyers pay in advance in the short term has decreased by nearly half compared to the beginning of the period, from 67.3 billion VND to 33.6 billion VND, while short-term payables have increased from 25.4 billion to 42.2 billion VND. Payable debts account for 138.7 billion VND, equivalent to 60.6% of total capital, showing an existing risk in the capital structure of XDC.

Source