Continuing the decade-long debt reduction journey.

At the beginning of 2024, Hoang Anh Gia Lai Joint Stock Company - HAGL (HAG), chaired by Mr. Doan Nguyen Duc (Chairman Duc), registered to sell 13.31 million HNG shares of Hoang Anh Gia Lai International Agriculture Joint Stock Company - HAGL Agrico (HNG) between January 9th and February 7th. The purpose of the sale was to repay BIDV Bank bonds.

The transaction is expected to be favorable given the recent sharp rise in HAGL Agrico's share price and the significant influx of capital it has attracted.

In the last 10 trading sessions, HAGL Agrico shares, owned by billionaire Tran Ba ​​Duong Thaco, increased in 8 sessions, including 4 sessions hitting the ceiling price. HNG shares surged from 3,600 VND in mid-December 2023 to 5,250 VND/share in the early morning of January 5th, equivalent to a 46% increase in 3 weeks.

If the sale is successful, Hoang Anh Gia Lai, owned by Chairman Duc, could earn an additional 70 billion VND. After the transaction, HAGL will still hold over 91 million HNG shares (equivalent to 8.24%). This is also a source that could help HAGL continue to restructure its debt when needed.

Over the past decade, Hoang Anh Gia Lai, led by Chairman Duc, has struggled to reduce its massive debt of tens of trillions of dong, accumulated from large investments in agriculture, including rubber in Indochina, but without success due to plummeting rubber prices.

2023 was a year in which Hoang Anh Gia Lai (HAGL) aggressively dealt with its debt since HAGL Agrico secured a strategic partnership with Thaco in 2018. Tens of trillions of VND from Thaco, owned by Mr. Tran Ba ​​Duong, helped the company of Chairman Duc avoid bankruptcy.

Most recently, in the final days of 2023, HAGL decided to transfer all 2.75 million shares it held in Bapi Hoang Anh Gia Lai Joint Stock Company. This is a brand of banana-fed pigs that was established in 2022.

Over the past 10 years, from 2013 to the present, 2023 has been the year HAGL, under Chairman Duc, has been most determined to reduce its debt significantly, improving its financial statements after a decade of difficulties. This move comes at a time when HAGL has major strategic investors, LPBank, owned by Mr. Nguyen Duc Thuy (Chairman Thuy), and LPBS Securities.

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One of the turning points in HAGL's attempt to overcome difficulties was its cooperation with Thaco, owned by Mr. Tran Ba ​​Duong.

On December 27th, Chairman Duc's company decided to sell the University Medical Center - Hoang Anh Gia Lai Joint Stock Company to continue debt restructuring and fulfill its commitment to be debt-free within the next few years. Accordingly, the Board of Directors approved the transfer of all 9.9 million shares (equivalent to 99%) of the charter capital in the University Medical Center - Hoang Anh Gia Lai Joint Stock Company to repay the principal of the 2016 bonds. The University Medical Center - HAGL was established in 2011 in Pleiku City (Gia Lai province) with an initial investment of 250 billion VND.

Previously, in the third quarter of 2023, HAGL also sold the Hoang Anh Gia Lai Hotel, generating 180 billion VND, to repay the bonds HAGL issued in 2016 to the Vietnam Investment and Development Bank (BIDV).

Waiting for the results from the "breakthrough formula"

HAGL, under Chairman Duc, is aggressively selling off assets to pay off and is expected to clear its debts within the next few years, as committed by the football club owner. The situation is also quite positive, with the debt decreasing rapidly and HAGL's owner gaining a significant partner in Chairman Thuy, the chairman of the rising LPBank.

Previously, in 2018, HAGL recorded financial debt of up to 28,000 billion VND. By the end of the third quarter of 2023, the company still owed approximately 7,778 billion VND. This figure will be even lower if calculated by the end of 2023 after recent debt repayments.

It is clear that determination has helped HAGL repay a large portion of its previously incurred debt. The proceeds from the sale of HAGL Agrico shares and other HAGL assets have helped the company owned by Chairman Duc alleviate its debt burden.

In addition, the company's cash flow has brightened again after HAGL, owned by Chairman Duc, found a breakthrough business formula: planting durian trees with a 1:4 return on investment, leveraging the company's large land area.

Some forecasts suggest that HAGL, owned by Chairman Duc, could return to achieving profits in the trillions of VND per year.

Recently, a piece of news that helped HAG shares surge was Eximbank's reduction of interest payments by over 1,400 billion VND for Gia Lai Livestock Joint Stock Company - a subsidiary of HAGL. With this move, HAGL will be able to reverse this into its 2023 profits, thereby estimating full-year profits at 2,150 billion VND, double the planned target.

Mr. Duc will focus his money on planting durian trees – a fruit that fetched very high prices in 2023, reaching hundreds of thousands of VND/kg thanks to favorable exports to China. It is estimated that by 2025, the Chinese durian market could reach $20 billion.

With yields of around 25 tons/ha and prices sometimes reaching 200,000 VND/kg, each hectare of durian can bring growers several billion VND in profit.

According to HAGL, in the first durian harvest in the third quarter of 2023, the company earned 18 billion VND while investing only 3.6 billion VND. HAGL's durian cultivation area is up to 1,200 hectares, but in 2023, only a few dozen hectares were harvested.

In 2024, HAGL's durian crop will begin to be harvested on a large scale. Approximately 700 hectares will be ready for harvest in the fourth quarter of 2024, contributing to HAGL's profit of around 2,000 billion VND. By 2026, HAGL's durian cultivation area will reach 2,000 hectares, of which 1,000 hectares will be ready for harvest. HAGL also has 5,000 hectares available for further durian cultivation.

With profits skyrocketing to several trillion VND per year, the possibility of paying off all debt by 2026, as shared by Chairman Duc, is considered feasible. The sale of assets also contributes to a faster debt restructuring process. In addition, the planned sale of 130 million shares is expected to generate trillions of VND for HAGL.

Along with the debt settlement, the company's shares have surged nearly 70% since the beginning of November, from 8,000 VND/share to the current 13,300 VND/share.

The surge over the past two months has pushed HAG's share price to a three-year high. Selling pressure has also been quite strong. Nevertheless, many are still betting on the stock's future price movements after HAGL signed a comprehensive cooperation agreement with LPBank, owned by Chairman Thuy.

Many believe a sustainable agricultural empire will emerge by the time Chairman Duc is in his twilight years. After many ups and downs, HAGL has transformed from a giant in real estate to hydropower and then rubber. Now, HAGL may focus more on its durian strength after a decade of Chairman Duc's efforts.

Chairman Duc wants to sell off more of his banana-fed pig chain . Hoang Anh Gia Lai has decided to divest all its capital in the company specializing in distributing products from banana-fed pigs. It is expected that Chairman Duc's business will earn over 20 billion VND.