Real estate tycoon's profits plummet, burdened by trillion-dollar bonds

The Ho Chi Minh City Stock Exchange (HOSE) has just decided to remove HPX shares of Hai Phat Investment JSC from the warning list from November 3. The reason is that HPX has overcome the cause that led to the stock being warned.

HPX shares were put on warning since July 4, because the 2023 annual general meeting of shareholders has not been held for more than 6 months from the end of fiscal year 2022.

On September 11, HPX shares were suspended from trading from September 18 due to late submission of the 2022 audited financial report. After that, Hai Phat announced the 2022 audited report, the 2023 semi-annual report and the third quarter 2023 financial report.

However, Hai Phat's business situation still faces many difficulties. In the third quarter of 2023, Hai Phat recorded revenue of VND 301.14 billion, down 58.5% year-on-year, and after-tax profit of VND 4.33 billion, down 95.3% year-on-year.

The company said that because some projects were not qualified to hand over houses to customers to account for revenue, revenue decreased, leading to a decrease in profits. In addition, product selling prices in 2023 decreased significantly compared to 2022.

In the first 9 months of 2023, Hai Phat had revenue of VND 1,196.99 billion, down 8.5% over the same period and after-tax profit recorded VND 61.5 billion, down 50.1% over the same period.

In the first half of 2023, HPX delayed interest payments on 3 bonds with a total face value of up to VND 1,250 billion. The total late interest payment was VND 44.34 billion.

The reason for not paying interest on time to bondholders is that the real estate market is facing difficulties in the context of tightening credit sources for real estate and reduced liquidity affecting cash flow from projects.

The company has negotiated with bondholders on the interest payment period, committing to fully pay the interest on time and overdue interest to all bondholders.

Listed company news

The stock market has a number of other important events of listed companies.

* HOSE announced that as of October 31, only 4 enterprises have not submitted their Q3/2023 Financial Reports, including Vinh Hoan Corporation (VHC), Dong A Plastics Group Corporation (DAG), Apax Holdings Investment Corporation (IBC) and Sao Thai Duong Investment Corporation (SJF).

* HUT : Mr. Pham Van Dung, former General Director of Ford Vietnam, has held the position of Chairman of SVC Holdings Company Limited (SVC Holdings), a member company of Tasco, since November 1.

Mr. Nguyen Thien Minh, former architect of Be Group system, has been Chairman of the Board of Members of VETC Automatic Toll Collection Company Limited (VETC) and Chairman of Tasco Technology Council since November 1.

* TTF: Truong Thanh Wood Industry Group Joint Stock Company recorded a loss of VND 6.3 billion in the third quarter, an accumulated loss of VND 42.74 billion in the first 9 months of 2023, bringing the total accumulated loss to VND 3,128.9 billion, equal to 76.1% of charter capital.

* VJC: Vietjet Aviation Joint Stock Company announced unusual information through the plan to issue 3,000 billion VND in corporate bonds, with a face value of 100 million VND/bond. The issuance term is 60 months, is a type of regular corporate bond, non-convertible, without warrants and without collateral.

* EVF : Electricity Finance Joint Stock Company approved the plan to issue more than 3.51 million ESOP shares, equivalent to 1% of total outstanding shares, at a price of VND 10,000/share.

* CAV : On November 23, Vietnam Electric Cable Corporation closed the transaction without the right to receive the second interim dividend of 2023. Dividends will be paid in cash at a rate of 20%, payment starting from December 8.

* VNE : HD Securities Corporation sold 121,200 VNE shares of Vietnam Electricity Construction Corporation by order matching method from October 25 to October 26.

* GMD : Gemadept Corporation approved the transfer of all 999,800 shares owned, equivalent to 99.98% of capital at Nam Hai Port Corporation, par value 100,000 VND/share.

* VNL: Vinalink Logistics JSC agreed to divest more than 878,000 shares owned at Central Transport and Logistics JSC by negotiation and order matching on UpCoM.

* CKG: Mr. Nguyen Xuan Dung, a major shareholder of Kien Giang Construction Investment Consulting Group Corporation, bought 1.2 million shares on October 26. Mr. Dung holds more than 9.16 million shares, accounting for 9.62%.

VN-Index

At the end of the session on November 2, VN-Index increased by 35.81 points (+3.44%), to 1,075.47 points. Total trading volume reached more than 772.1 million units, worth VND14,637.2 billion.

HNX-Index increased by 8.32 points (+3.97%), to 217.97 points. Total matched volume reached more than 116.1 million units, worth VND2,036.6 billion.

UpCoM-Index increased by 2.27 points (+2.78%), to 83.97 points. Total matched volume reached more than 43.2 million units, worth VND567.4 billion.

Market commentary, Vietcombank Securities believes that from a technical perspective, the VN-Index continues to extend its recovery momentum after a large decline. Bottom-fishing demand has reappeared.

With the current developments, the closest resistance level that VN-Index has to face is the 1,080-1,100 point range and the probability of selling pressure suddenly returning around the above score range as well as in the next few sessions, when stocks hit bottom and return to investors' accounts, is something that needs to be taken into account.

Investors who successfully caught the bottom on November 1st, limited further disbursement to chase stocks, should continue to maintain a cautious mindset, plan short-term transactions to be able to realize profits in time if selling pressure suddenly returns around the 1,080 point area.

Vietnam Construction Securities (CSI) continues to maintain its stance of holding the previously purchased portfolio, and may open new buying positions when the general market fluctuates. Prioritize stocks with strong growth such as securities, real estate, and construction.

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