SAB shares hit 12-month low for first time, despite market rally
Last weekend, when green covered the trading floors due to strong cash flow into the Vietnamese stock market, the code SAB of Saigon Beer - Alcohol - Beverage Corporation hit its lowest point in the past 12 months.
Specifically, at the end of the trading session on July 14, 2023, SAB shares were only traded at VND 153,300/share. This bottoming out marks SAB's lowest price in the past year, corresponding to a capitalization value of VND 98,600.
Unsatisfactory business results have caused Sabeco's (SAB) stock price to fall to its lowest level in the past 12 months.
In the first trading session of the new week, July 17, 2023, SAB had a slight recovery to the threshold of 154,500 VND/share but still could not recover compared to the price range of 190,000 VND/share reached in mid-March.
The decline in SAB shares occurred in the context of the company's first-quarter business results falling sharply compared to the same period last year, creating a bleak picture for Sabeco's economic outlook in 2023.
Q1 profit drops 18.8%, part of profit comes from financial revenue
According to the first quarter 2023 business results report, Sabeco's revenue from sales and service provision reached VND6,213.9 billion, down about 15% over the same period. Revenue decreased but cost of goods sold remained high at VND4,298.9 billion.
Sabeco's financial revenue during the period reached VND358.4 billion, an increase of nearly one and a half times compared to the same period last year. This revenue mainly comes from large deposits that Sabeco is holding at banks. Meanwhile, financial expenses, mostly interest expenses, only accounted for VND17.5 billion.
It is noteworthy that although the revenue scale decreased, the selling expenses increased from 755.3 billion VND to 861.4 billion VND, corresponding to an increase of about 14%. The business management expenses also increased from 164.9 billion VND to 182.2 billion VND.
The increase in expenses has reduced Sabeco's profit after corporate income tax to only VND1,004 billion, down 18.8% over the same period.
In fact, it can be seen that the results from the company's main business activities have declined much more than at present. Because during the period, an additional financial rescue was recorded. This financial revenue comes from a large amount of cash recorded in the company's short-term financial investment index.
With tens of thousands of billions deposited in the bank, SAB still issues shares to increase capital
There are few units with as much cash reserves as Sabeco. By the end of the first quarter of 2023, the company's total assets reached VND 31,480.3 billion, down about 8.7% compared to the beginning of the year. Notably, more than half of Sabeco's assets are in the form of cash. This includes VND 2,994.9 billion in cash and cash equivalents.
In addition, SAB also has 17,367.5 billion VND in financial investments held to maturity. Although this deposit amount has decreased by more than 2,000 billion compared to the beginning of the period, it still accounts for a large amount of the company's assets.
With such flexible financial potential, in the recent annual general meeting of shareholders, SAB still decided to approve the plan to issue nearly 641.3 million additional shares to existing shareholders to double its charter capital. The issuance ratio is 1:1 and will be implemented in 2023 after being approved by the State Securities Commission.
Source
Comment (0)