A textile company is about to pay dividends 10 times higher than its market price.

Phan Thiet Garment Export Joint Stock Company (PTG) has decided to pay an interim dividend for this year to shareholders at a rate of 50%, equivalent to 5,000 VND, while the share price on the UPCoM exchange is currently at 500 VND.

The Board of Directors of Phan Thiet Garment Export Joint Stock Company (stock code: PTG) has just announced a resolution to unanimously pay an interim cash dividend for the first quarter of 2024 at a rate of 50%, meaning shareholders will receive 5,000 VND per share. The record date for shareholders is May 13th and the payment will be made on June 13th.

With more than 4.9 million shares in circulation, it is estimated that this enterprise will spend about 25 billion VND to pay dividends.

This decision was made after the company's annual general meeting of shareholders approved a dividend distribution plan for this year ranging from 20-100% of charter capital, meaning the total dividend payout could reach 50 billion VND.

On the stock exchange, Phan Thiet Garment Export Joint Stock Company's shares are currently at 500 VND, up 20% from 400 VND at the beginning of the year. This means that the value of the interim dividend that shareholders will receive is 10 times higher than the market price. This is the historical peak of this stock because the dividend payment for many years has caused the market price to adjust to a very low level.

Despite attractive dividends, PTG shares are almost illiquid due to having only 287 shareholders (according to the 2023 annual report). The last time the company's shares recorded successful trading was in early February this year, with 45,000 shares changing hands.

Phan Thiet Garment Export Joint Stock Company has been trading on the stock exchange since 2010 with a market price of 10,000 VND. The company currently has a charter capital of approximately 50 billion VND and has consistently maintained cash dividends since its listing.

In 2023, the company recorded revenue of VND 460 billion, a decrease of more than 10% compared to the same period. Pre-tax profit reached VND 57.4 billion and after- tax profit reached VND 46.7 billion, showing negligible differences compared to the same period. Last year's dividend rate was 20%, meaning the company allocated VND 10 billion to distribute dividends to shareholders.

This year, the company aims for revenue of VND 506 billion, a 9.87% increase compared to the previous year. Expected pre-tax profit is VND 56.8 billion and after- tax profit is VND 45.5 billion.

The management stated that this target was based on the assessment that the global economic situation is highly volatile and unpredictable, and that unusual natural disasters and epidemics could affect the company's production and business operations.

In addition, the company believes that competition for garment processing orders with developing countries in Asia is increasingly fierce and the lack of skilled labor is also having a significant impact. However, the company also recognizes that there are some favorable factors such as Vietnam's growing image and position, and favorable geographical location, so there is a high possibility of positive changes in orders.

Source