Losses and trading suspension

VietNamNet•09/09/2023

A series of hot stocks have had their trading suspended.

The Ho Chi Minh City Stock Exchange (HOSE) has just issued a series of decisions to suspend trading of once-popular stocks that have also seen sharp price increases recently due to violations of information disclosure regulations.

The stocks added to HOSE's "blacklist" this time include: Hai Phat Real Estate (HPX) of Chairman Do Quy Hai, Apax Holdings of Mr. Nguyen Ngoc Thuy (Shark Thuy), and Louis Capital (TGG), formerly of Do Thanh Nhan.

Currently, these businesses are all subject to restrictions and continue to violate regulations on information disclosure, having failed to submit their audited semi-annual financial statements for 2023.

This is not surprising to those who closely follow the activities of the aforementioned companies, but it is quite unexpected for investors who buy and sell stocks based on the ups and downs of hot stocks on the stock market.

Recently, many stocks in the real estate and financial sectors (including securities companies) have rebounded quite strongly amidst the government's efforts to introduce various policies affecting capital channels, legal frameworks, and supply-demand balance to support the market.

Many bottlenecks are being aggressively removed, and the reduction in interest rates is expected to help thaw the real estate market. The vibrancy of the stock market, meanwhile, is driving strong gains in financial stocks.

*Trading of HPX shares owned by Mr. Do Quy Hai has been suspended.*

In just the past month and a half, Hai Phat Invest (HPX) shares have surged, nearly doubling from around 4,000 VND/share to 7,310 VND/share on September 8th.

Apax Holdings (IBC) shares also increased from 1,750 VND/share in mid-July to 2,520 VND/share on September 8th. On September 5th, IBC even recorded a 7% increase, hitting the upper limit of the trading session.

TGG shares of The Golden Group Joint Stock Company (formerly Louis Capital) remained unchanged at the reference price of 3,380 VND/share.

Hai Phat Invest is known as a major real estate developer in Northern Vietnam, having risen to prominence over the years. However, like many other real estate companies, HPX faced liquidity problems when the real estate market experienced a prolonged downturn and the bond market went into crisis following the events involving Tan Hoang Minh and Van Thinh Phat.

Similar to the family of Novaland Chairman Bui Thanh Nhon, HPX Chairman Do Quy Hai has been selling off tens of millions of HPX shares over a long period, reducing his stake from over 40% (approximately 120 million shares) to just over 14% currently. HPX shares have fallen from over 26,000 VND/share at the end of October 2022 to around 4,000 VND/share at one point.

The shareholder structure at Hai Phat has also undergone significant changes. On November 30, 2022 alone, more than 54% of HPX's outstanding shares changed hands.

Shark Thủy's Apax Holdings also collapsed when it ventured from the education sector into real estate. Over the past year, Shark Thủy's company restructured, using both real estate and household goods as collateral for investor debts. However, IBC's share price remained below rock bottom, falling more than tenfold in just over a year.

The Golden Group (TGG) has also changed its name and appointed a new chairman. However, its share price remains very low, not even worth a bunch of vegetables.

A major shock, businesses are struggling.

Previously, investors witnessed many stocks being suspended from trading, and these were all companies facing difficulties, often linked to setbacks involving their leaders.

In early March 2023, KLF shares of CFS Investment, Trading and Import-Export Joint Stock Company were suspended from trading by the Hanoi Stock Exchange (HNX). The reason was that KLF was more than six months late in submitting its audited semi-annual financial statements for 2022 compared to the stipulated deadline.

In fact, KLF, like many other "FLC group" stocks, fell into crisis after the company's leaders were arrested.

Since Trinh Van Quyet, former Chairman of FLC, and his accomplices were arrested for their involvement in stock price manipulation, stocks within the "FLC group" ecosystem, including FLC, GAB, ROS, BOS, AMD, HAI, KLF, etc., have been struggling. Most of the "FLC group" stocks have been delisted (AMD, GAB, FLC, ROS, HAI) and trading has been suspended or restricted.

For Hai Phat Invest, the liquidity shock caused by the frozen real estate market and the corporate bond market crisis has plunged the company into prolonged difficulties. After several delays in submitting its audited financial statements for 2022, on September 5th, Hai Phat finally released its audited financial statements for 2022 with several notable changes. HPX shifted from a profit of over 140 billion VND to a loss of over 60 billion VND after the 2022 audit.

For the "Louis family" businesses, the situation is also quite dire following the events involving Mr. Do Thanh Nhan and the Louis Holdings group. VKC Holdings (VKC) announced in early October 2022 that it was unable to repay a 200 billion VND bond issue. All members of the board of directors, supervisory board, and general management board resigned before the annual general shareholders' meeting on July 20, 2022.

Following Do Thanh Nhan's arrest, most of the "Louis family" businesses recorded poor business results and plummeted stock prices, in contrast to the surge in the second half of 2021. Mergers and acquisitions had transformed many businesses within the Louis ecosystem into companies with very positive financial reports.

Over the years, the stock market has seen numerous cases of companies that were once giants in the real estate and financial sectors facing difficulties due to imbalances in cash flow and debt.

Ten years ago, companies like Hoang Anh Gia Lai (HAG), owned by Doan Nguyen Duc (Chairman Duc), Quoc Cuong Gia Lai (QCG), and Sacomreal (SCR) faced difficulties and have yet to fully recover. More recently, companies like Novaland (NVL), owned by Bui Thanh Nhon, and Hai Phat Invest (HPX), owned by Do Quy Hai, have also fallen into a situation of heavy debt burdens.

Recently, Novaland has shown signs of recovery, but its debt burden remains very large. According to HNX, in the first half of 2023, Novaland had 9 bond issues due for principal repayment, with a total value of nearly 5,200 billion VND.

Not only in the real estate sector, but many businesses in the construction, finance, and energy sectors are also facing cash flow crises. Hoa Binh Construction (HBC), chaired by Mr. Le Viet Hai, recently reported a profit decrease of over 800 billion VND after auditing, turning from a profit into a significant loss.

Real estate stocks surge, is the property market about to heat up? Real estate stocks have been rising sharply recently. The property market has brighter prospects as bottlenecks are gradually being removed.

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