Fecon (FCN) stock 'evaporates' 26% of value in just two weeks of trading
In just two trading weeks from September 18, 2023 to September 28, 2023, shares of Fecon JSC's FCN code have had consecutive sessions of deep decline.
Specifically, in the 9 trading sessions from September 18 to September 28, there were only 2 sessions of price increase on September 20 and September 27. The remaining 7 sessions had price decrease, of which 4 sessions hit the floor.
Fecon (FCN) stock price has been continuously decreasing over the past 2 weeks.
The floor price drop occurred continuously in the trading sessions on September 19, September 22, September 25 and September 26 amid market panic. The closing price of FCN code fell from the peak of VND19,400/share on September 18 to only VND14,350/share, losing 26% in just 2 weeks of trading.
The downward trend has shown no signs of stopping, especially as Fecon's business operations have recently revealed a number of problems.
After half a year of operation, Fecon only completed 1% of its target.
In early 2023, Fecon set a business target of VND 3,800 billion in revenue, an increase of 24% compared to the previous year. The target profit after tax is VND 125 billion, an increase of 142.2%. However, the operating results of the first 6 months of the year show that the above target is still out of reach for Fecon.
In the first quarter of 2023, the company's revenue reached 609.1 billion VND, and its after-tax profit was only 2.8 billion VND. Entering the second quarter of 2023, the situation did not improve at all but even went backwards.
In the first half of the year, Fecon (FCN) only completed more than 1% of the annual profit plan (Photo TL)
Fecon's revenue in the second quarter of 2023 reached VND674 billion, down 35.1% year-on-year. Cost of goods sold accounted for VND549 billion, resulting in after-tax profit of only VND124.9 billion, equivalent to a gross profit margin of 18.5%.
Financial revenue in Q2 decreased by half, to only VND5.2 billion, while interest expenses increased by 33.7%, to VND70.6 billion. Sales expenses and administrative expenses reached VND5 billion and VND49.5 billion, respectively. After deducting all expenses, Fecon had a loss after tax of VND1.4 billion in Q2.
Fecon's accumulated revenue in the first 6 months of the year reached 1,282.7 billion VND, equivalent to 33% of the revenue plan. Profit after tax reached 1.3 billion VND, completing only 1% of the profit plan.
Negative net cash flow from business, increased debt by 324 billion, where does Fecon get capital to do 4 new projects that won bids?
Recently, Fecon announced the winning bid for 4 new projects with a total value of up to 500 billion VND. The bid packages include:
The package "providing, constructing mass piles and testing piles" at Nhon Trach 3&4 power plant project with a total value of 179 billion VND; the package "constructing the southern diaphragm wall of station 11" worth more than 62 billion VND under the pilot urban railway project (metro line 3) of Hanoi City; a contract worth 75 billion VND at Vung Ang II thermal power plant project (Ha Tinh); the package "constructing the section Km91+800 - Km114+200" worth 147 billion VND.
Winning four consecutive bids took place in the context of Fecon's declining business results, and its asset structure also revealed some issues that need attention.
At the end of the second quarter, Fecon's total assets reached VND 7,686.2 billion. Of which, the company is holding a large amount of assets in the form of receivables, accounting for VND 3,017.4 billion, equivalent to 39.2% of total assets.
Accounts receivable from customers also accounted for 1,741 billion VND. Inventory also increased from 1,669.3 billion to 1,739.3 billion VND.
Fecon's capital structure also shows that the majority of capital used is debt, accounting for VND4,278.3 billion, equivalent to 55.7%. Notably, short-term debt is showing a strong increase of VND324.3 billion, reaching VND2,091 billion.
Owner's equity at the end of the second quarter reached VND3,407.9 billion. Of which, VND1,574.4 billion was contributed capital by owners. Undistributed profit after tax only accounted for VND91 billion, development investment fund accounted for VND343.6 billion.
At the end of the second quarter, Fecon's net cash flow from operating activities also recorded a negative VND101.9 billion. Of which, the largest cash outflow was interest, amounting to VND137.1 billion. This shows the pressure from debt and interest on Fecon's cash flow and business results.
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