SMC shares fall to 8-year low

Five consecutive sessions of decline caused SMC shares of SMC Investment and Trading Joint Stock Company to fall to 6,310 VND, marking the lowest price since October 2016.

SMC shares closed on October 16 at VND6,310, down 4.39% from the reference price. This is the 5th consecutive decline of this code, bringing the market price from VND7,110 to the current level. This level is lower than the price of VND7,040 recorded at the end of 2022, thereby becoming the 8-year bottom of SMC.

Since the beginning of October, SMC's market price has evaporated by more than 20%. Compared to the peak set since the beginning of the year at VND20,200 in July 2024, this stock has lost nearly 69%. With about 73.7 million shares listed on the Ho Chi Minh City Stock Exchange, SMC's market capitalization is VND464 billion.

SMC stock price chart from October 2016 to present.

SMC is in a long-term downtrend as it is beset by negative news about its business and stock.

Specifically, in mid-April, SMC was put under warning and control by the Ho Chi Minh City Stock Exchange because its undistributed after-tax profit in the 2023 audited report and the after-tax profit of the parent company's shareholders in 2022 and 2023 were negative.

At that time, the management board said that it had increased the application of business solutions to achieve high efficiency, including liquidating financial investments and liquidating assets. The company successively approved the plan to transfer an area of ​​6,197 m2 at SMC Binh Duong - Dong An Industrial Park, 9,096 m2 at Tan Tao A Industrial Park, 329.5 m2 in Binh Thanh District (HCMC).

In the context of major partners facing cash flow difficulties, the company had to restructure and reduce its workforce. Compared to the end of 2022, SMC reduced its workforce by 32.6%, with only 810 employees remaining at the end of the second quarter of this year.

In the middle of this month, more than 250,000 SMC shares issued under the employee incentive program were transferred from restricted transfer status to free transfer status.

In the first half of 2024, SMC recorded profits from securities transfers, dividends distributed of about VND 196.3 billion and profits from liquidation and sale of fixed assets of about VND 106 billion. Profit from investment activities Securities and liquidation of fixed assets was VND302.3 billion, equal to 334% of pre-tax profit. SMC may continue to lose if excluding asset sales and securities investment sales.

Regarding bad debt settlement, at the 2024 General Meeting of Shareholders, Ms. Nguyen Ngoc Y Nhi, Vice Chairman of the Board of Directors of SMC said: “If the debt cannot be settled, the company will have to set aside an additional VND 90 billion in provisions in the second quarter, bringing the total provision to nearly VND 300 billion in the whole year of 2024. SMC must definitely settle the debt this year, settlement options include cash collection, stock swap, receiving assets to offset debt, and if the debt settlement plan is feasible, SMC will accept it.”

By the end of June, the company recorded a total bad debt value of more than VND1,309 billion, of which VND577 billion was set aside for provisions. Although bad debt remained stable in the first half of the year, SMC set aside an additional VND3.63 billion but still did not handle it as expected.

Source: https://baodautu.vn/co-phieu-smc-xuong-vung-gia-thap-nhat-8-nam-d227647.html