Dong Hai Ben Tre (DHC) issues 16 million more shares below market price

Dong Hai Ben Tre (DHC) issues shares at 41% lower than market price, with no transfer restrictions

Dong Hai Ben Tre Joint Stock Company (Code: DHC) has just added a document asking for shareholders' opinions on the plan to offer shares to existing shareholders at an issuance rate of 20%. Thus, each shareholder owning 100 shares will have the right to buy 20 additional shares offered for sale.

With the current number of shares, Dong Hai Ben Tre is expected to issue an additional 16 million shares to offer to shareholders. The offering price will be VND25,000/share, 41% lower than the market price. Thus, if this offering is successful, Dong Hai Ben Tre will collect VND402.5 billion.

The board of directors has just successfully initiated a two-way public offering of DHC shares, with the company issuing 16 million more shares at a price of 1. — Dong Hai Ben Tre (DHC) plans to issue 16 million shares at 41% below market price without transfer restrictions. (Photo TL)

It is worth noting that the shares issued this time will not be subject to transfer restrictions. This means that a large number of shares with a market price 41% lower than the market are about to be released.

In addition to offering newly issued shares, Dong Hai Ben Tre also plans to issue ESOP at a rate of 2.48% at a price of VND25,000/share to employees in the company. However, these shares will be restricted from transfer for 3 years.

Regarding DHC stock price movements, at the trading session on June 16, 2023, DHC shares were priced at VND 42,200/share, a relatively strong recovery compared to the bottom at VND 29,000/share recorded in November 2022.

Revenue decreased by 17.8%, profit after tax decreased by 27% compared to the same period

Regarding the business situation of Dong Hai Ben Tre, in the first quarter of 2023, the company recorded net revenue of VND 848 billion, down about 17.8% over the same period last year. The company's after-tax profit reached VND 86 billion, down 27% over the same period.

Cost of goods sold remained high at nearly VND701 billion, causing gross profit from sales to fall to only VND147 billion. Expenses during the period, including selling expenses and administrative expenses, decreased slightly, to VND29 billion and VND19 billion, respectively. In contrast, financial expenses, mostly interest expenses, increased from VND6 billion to more than VND9 billion.

At the end of the first quarter of 2023, Dong Hai Ben Tre's total assets reached VND 2,972 billion, most of which were short-term assets. Of which, short-term receivables from customers amounted to VND 620 billion, showing a large amount of revenue from customers that the company has not yet collected.

Meanwhile, inventories increased sharply from VND 629 billion to VND 744 billion, an increase of 18.3%.

In the capital structure of Dong Hai Ben Tre, short-term debt also increased from VND 518 billion to VND 552 billion in just the first 3 months of the year. The company has no long-term loans recorded in the financial statements.

In equity, Dong Hai Ben Tre is accumulating undistributed profit after tax of up to 713 billion VND, a slight decrease compared to the beginning of the period.

Board member successfully "buys the bottom" of his own company's stock

In early 2023, DHC shareholders received information about notable insider transactions. In particular, Mr. Nguyen Thanh Nghia, a member of the Board of Directors, registered to buy 500,000 DHC shares from February 14 to March 13. At this time, DHC shares fluctuated around VND 36,000/share.

Also at this time, DHC's fourth quarter 2022 revenue report recorded a 15.5% decrease in revenue over the same period, with after-tax accounting profit reaching VND 82 billion, down about 11.2% over the same period last year.

Up to now, DHC shares have increased to the price range of 42,000 VND/share. Thus, it can be seen that the member of the Board of Directors, Mr. Nguyen Thanh Nghia, has successfully "caught the bottom" of his own company's shares.

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