Hoa Sen wants to use up to 5,000 billion VND to expand into new fields

Hoa Sen Group Joint Stock Company (code HSG - HoSE) announced additional documents for the Annual General Meeting of Shareholders on March 18, 2024, the Meeting is expected to be held in Ho Chi Minh City.

First, Hoa Sen Group added a proposal for the employee stock issuance program (ESOP) for leaders, administrators, executives, managers, and key personnel.

Of which, Hoa Sen Group will issue 5 million ESOP shares at a price of VND10,000/share and the shares will be restricted from transfer for 1 year.

With the closing price on March 1 being VND23,050 /share, Hoa Sen Group's Board of Directors will buy shares at a discount of 56.6 % compared to the current market price.

In the second supplementary report, Hoa Sen Group submitted to shareholders for approval policies related to investment in expanding industries and fields. In particular, through the policy of researching, promoting, and implementing investment in expanding new industries and fields with potential and feasibility in many fields including finance; banking; securities; insurance; real estate; precision mechanics; mechanical engineering; semiconductor technology; development of office projects, housing, residential areas, urban areas; education, training; health care; tourism, ecology, resorts, etc.

Hoa Sen Group added that the total maximum investment for the expanded field will not exceed VND5,000 billion.

Hoa Sen aims to increase profits by several times in the 2023-2024 fiscal year and plans to list a series of subsidiaries.

Previously, in the documents of the upcoming General Meeting of Shareholders, in the 2023-2024 fiscal year (from October 1, 2023 to September 30, 2024), Hoa Sen Group set out a business plan with two scenarios. In which, scenario 1 with a consumption output of 1,625 thousand tons, an increase of 13.3% over the same period, expected revenue of VND 34,000 billion, an increase of 7.4% over the same period and expected after-tax profit of VND 400 billion, an increase of 12.33 times compared to the implementation in the 2022-2023 fiscal year.

Scenario 2, total estimated consumption output is 1,730 thousand tons, up 20.7% over the same period, estimated revenue is 36,000 billion VND, up 13.7% over the same period, and expected after-tax profit is 500 billion VND, up 15.67 times compared to the implementation in the 2022-2023 fiscal year.

Previously, in the 2022 - 2023 fiscal year (from October 1, 2022 to September 30, 2023), Hoa Sen Group recorded revenue of VND 31,650.7 billion, down 36.3% over the same period and profit after tax of VND 30.06 billion, down 88% over the same period. In which, gross profit margin decreased from 9.9% to only 9.7%.

It is known that in the fiscal year 2022 - 2023, Hoa Sen Group sets a business plan based on two scenarios.

In the first scenario with a finished product output of 1.4 million tons, the Company plans to have revenue of VND34,000 billion, down 32% year-on-year, and expected after-tax profit of VND100 billion, down 60% year-on-year.

The second scenario is more positive with finished product output of 1.5 million tons, estimated revenue of VND36,000 billion, down 28% year-on-year, and expected after-tax profit of VND300 billion, up 20% year-on-year.

Thus, at the end of the 2022-2023 fiscal year, with a profit of only VND 30.06 billion, Hoa Sen Group completed 30.1% of the conservative plan of VND 100 billion and completed 10% of the aggressive plan of VND 300 billion in profit.

With only 30% of the cautious plan and 10% of the aggressive plan completed, in the upcoming General Meeting, Hoa Sen Group will present to shareholders a plan to pay dividends for the 2022-2023 fiscal year at a rate of 5% in cash.

Continue restructuring to soon list Hoa Sen Plastics JSC

In addition, in the upcoming Congress, Hoa Sen Group will also submit to shareholders for approval the restructuring and specialization of the steel pipe production and business sector. In particular, Hoa Sen Plastic Joint Stock Company, after receiving the transfer of the plastic production and business sector, has been operating effectively, demonstrating high initiative in the management and operation of the plastic production and business sector.

In the future, Hoa Sen Plastics Corporation will issue shares to the public and list shares on the Stock Exchange.

Therefore, Hoa Sen Group submitted to shareholders for consideration the conversion of Hoa Sen Phu My One Member Co., Ltd. into Hoa Sen Steel Pipe Joint Stock Company, with Hoa Sen Group owning 99% of the charter capital. The unit will receive all infrastructure serving steel pipe production and business activities, with the expected implementation time and roadmap from 1 to 5 years.

After Hoa Sen Steel Pipe JSC completes the acquisition of the steel pipe manufacturing sector and puts it into stable and profitable operation, the Company will submit to shareholders for consideration and approval of the plan to issue shares to the public and list.

For the Hoa Sen Home system, Hoa Sen Group will continue to consolidate and improve operational efficiency, production and business efficiency, and prepare the best conditions for converting the Hoa Sen Home system into Hoa Sen Home Joint Stock Company.

Regarding personnel, after the end of the 2018-2023 term, Hoa Sen Group will also re-elect the Board of Directors for the new term 2024-2029.

Source