Three consecutive leaders of Vinh Hoan (VHC) resigned in just three days.

Three senior leaders of Vinh Hoan (VHC) resigned in just three days.

Last week, three leaders of Vinh Hoan Corporation submitted their resignations at the same time, causing a stir among the company's shareholders.

Specifically, on April 12, 2023, Mr. Nguyen Van Khanh, an independent member of Vinh Hoan's Board of Directors, submitted his resignation for personal reasons and due to lack of time for work. Mr. Khanh is also the Deputy Director in charge of operating the Ho Chi Minh City branch of Bao Viet Securities Corporation.

Labor export revenue 69 consecutive 3 leaders of Vinh Hoan VHC resigned in just 3 days picture 1 — Vinh Hoan (VHC) recorded a sharp decline in export revenue, and at the same time, 3 senior leaders resigned in just 3 days (Photo TL)

The very next day, April 13, 2023, Ms. Phan Thi Kim Hoa, who is holding the position of member of the Board of Supervisors, also submitted her resignation on the grounds that she is not regularly present in Vietnam and therefore cannot assume the position.

Continuing on April 14, 2023, Mr. Le Van Nhat, an independent member of Vinh Hoan's Board of Directors, also submitted his resignation due to the reason of not being able to arrange time for work.

Thus, it can be seen that within just 3 days, 3 senior leaders of Vinh Hoan have submitted their resignations. This incident coincidentally happened right when Vinh Hoan was facing a business difficulty that caused negative growth and a serious decline in export revenue.

Growth momentum cools down from Q4 2022, predicting upcoming difficulties for Vinh Hoan

Despite a prosperous 2022 and favorable business operations, Vinh Hoan's growth momentum showed signs of cooling down with a sharp decline in the fourth quarter of 2022.

Specifically, sales and service revenue in the fourth quarter of 2022 was recorded at VND 2,484.1 billion, down 23.8% compared to the previous third quarter. The decline also continued for after-tax profit, recorded at VND 199.6 billion, down about 56.6% compared to the third quarter, and also down 56.4% compared to the same period last year.

The profit decline was partly due to the relatively high cost of goods sold, accounting for a large proportion of the revenue structure, reaching VND2,010.1 billion. Financial revenue also recorded strong growth from VND60.9 billion to VND117.9 billion.

Labor export revenue 69 consecutively 3 leaders of Vinh Hoan VHC resigned in just 3 days picture 2

In addition, financial expenses also increased from VND 16.1 billion to VND 136.6 billion, putting great pressure on the company's profits. Selling expenses also increased from VND 93.3 billion to VND 133.2 billion, an increase of 30%. Business management expenses also increased from VND 61.2 billion to VND 88.1 billion, an increase of 44%.

However, thanks to the positive business performance in the first three quarters of the year, Vinh Hoan's annual revenue still reached VND13,472.5 billion, up 48.7% over the same period. Profit after tax nearly doubled, reaching VND2,014.6 billion.

However, it should be noted that Vinh Hoan's slowing growth in the fourth quarter, along with fluctuations in the macroeconomic situation in 2023, will cause many difficulties for the company's business plan this year. This has also been partly reflected in Vinh Hoan's business results in the first two months of the year.

Negative growth in February, exports to the US plummeted

The negative growth momentum of the fourth quarter continued into the first months of 2023 and was reflected in the business results of the first two months of 2022.

Specifically, in February 2022, Vinh Hoan recorded revenue of VND 758 billion, down about 29% compared to the same period last year. In particular, the company's most important market, accounting for a high proportion of revenue, the US, is in serious decline. Revenue from the US market was only VND 197 billion, down 69% compared to the same period.

In the Chinese market, revenue reached 70 billion VND, down about 3%. Meanwhile, the domestic market did not grow, reaching only 189 billion VND in revenue, down about 2%. The European market, on the other hand, recorded an increase of about 116% over the same period, reaching 194 billion VND in revenue.

In the previous January, Vinh Hoan also recorded negative growth when export revenue reached VND462 billion, down about 45% compared to the same period. Of which, the US export market also decreased by 65%, domestic revenue also decreased by 34% compared to the same period.

Continuously declining export revenue, high cost of goods sold and increasing expenses from 2022 show a difficult picture for Vinh Hoan's business plan. In addition, the resignation of Vinh Hoan's senior leaders in 3 consecutive days also makes the company's shareholders worried.

Regarding the price movement of VHC shares, in the trading session on April 18, 2023, VHC shares recorded a price of VND 61,000/share. Although it has recovered compared to the end of March, it is still losing nearly half of its value compared to the peak reached in May 2022.

Source