The high share price of Dak Lak Rubber Investment Joint Stock Company (code DRI) at the beginning of the year encouraged internal shareholders and the parent company to register to sell large quantities.
The high share price of Dak Lak Rubber Investment Joint Stock Company (code DRI) at the beginning of the year encouraged internal shareholders and the parent company to register to sell large quantities.
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| The rubber plantation of Dak Lak Rubber Investment in Laos is planted in an area where tornadoes often occur, with many trees falling down. Photo: Le Toan |
Parent company wants to reduce ownership to 36% of charter capital
In the early 2025 period, with natural rubber prices continuing to increase and positive business results of natural rubber enterprises in the second half of 2024, cash flow tends to participate and push up the stock prices of this group.
From January 13 to March 4, 2025, the group of 4 natural rubber stocks including DPR (Dong Phu Rubber Joint Stock Company), PHR (Phuoc Hoa Rubber Joint Stock Company), TRC (Tay Ninh Rubber Joint Stock Company) and DRI (Dak Lak Rubber Investment Joint Stock Company) increased in price by 38.2% in less than 2 months.
As for Dong Phu Rubber and Phuoc Hoa Rubber, in addition to benefiting from the increase in natural rubber prices, they also benefit from the potential to convert rubber land into industrial land, when the planning of Binh Duong and Binh Phuoc provinces has been approved, industrial real estate projects on existing rubber land have been announced.
Specifically, according to the Binh Duong Provincial Planning for the period 2021-2030, Phuoc Hoa Rubber can convert a total of 2,800 hectares of rubber land into industrial park land, about 1,150 hectares into urban land and other uses. Meanwhile, Dong Phu Rubber has the potential to convert rubber land into industrial land when expanding the Bac Dong Phu Project with a scale of 317 hectares and Nam Dong Phu with a scale of 480 hectares.
Meanwhile, Dak Lak Rubber Investment mainly benefits from the natural rubber industry wave, thereby increasing its valuation. In particular, with a price increase of 33.6% from January 13 to March 4, from VND 11,900 to VND 15,900/share, DRI shares are trading at a P/E valuation of up to 10.69 times, higher than the normal period of 2021-2022 from 6.25 to 6.8 times and a P/B valuation of 1.99 times, higher than the normal period of 2016-2022 from 0.49 to 1.25 times.
With the valuation no longer low, it is understandable that after the hot increase at the beginning of the year, DRI shares have shown signs of slowing down around 15,700 - 16,700 VND/share for over a week now. At the same time, a series of leaders and major shareholders have shown signs of wanting to sell a large amount of shares.
Specifically, Ms. Nguyen Thi Hai, Deputy General Director of Dak Lak Rubber Investment, registered to sell all 175,000 DRI shares, equivalent to 0.24% of charter capital from February 25 to March 26; Mr. Bui Quang Ninh, Vice Chairman of the Board of Directors and independent member of the Board of Directors, registered to divest all 150,000 DRI shares, equivalent to 0.2% of charter capital from February 25 to March 20.
In particular, the parent company Dak Lak Rubber Joint Stock Company (code DRG) also registered to sell 18.19 million DRI shares to reduce its ownership from 60.84% of charter capital to 36% of charter capital. The transaction was conducted from February 3 to March 4 (the results of the offering have not been announced). If the divestment is successful, Dak Lak Rubber will no longer be a shareholder of the parent company of Dak Lak Rubber Investment, changing the accounting method from investment in subsidiaries to investment in associates.
Difficult to attract workers
Dak Lak Rubber Investment operates mainly in the field of rubber latex exploitation and processing and fruit trees. The company is managing rubber plantations in two provinces of Champasak and Salaval (Laos) through its subsidiary, with a total area of 10,186.6 hectares. The productivity of the company's rubber plantations is not high because the trees are planted in areas where tornadoes often occur, causing many rubber trees to fall.
With about 86% of the total rubber area of Dak Lak Rubber Investment planted in the period 2005-2008, the average age of the trees is 17-20 years old, so in the next few years, the Company's rubber garden will still produce high productivity. However, in the long term, in the next 5-7 years, the Company will face pressure to plant and care for new trees when the trees are old, the exploitation productivity decreases and the cost of new investment increases.
According to Phu Hung Securities Company, although rubber trees are in the exploitation stage, Dak Lak Rubber Investment is facing difficulties due to labor shortages, and the Lao currency is continuously depreciating, leading to a tendency for workers here to move to work in Thailand. Therefore, maintaining labor at the Company's rubber construction site is facing difficulties.
To solve the problem of labor, Dak Lak Rubber Investment has shared the implementation of paying workers in USD, implementing material rewards and improving workers' lives. However, with the USD strengthening in the early stages of 2025, the Company continues to face increasing risks of devaluation of the Lao currency and the problem of retaining workers.
Source: https://baodautu.vn/co-phieu-dri-dung-truoc-thach-thuc-lon-d251254.html
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