Hoa Binh Construction shares subject to mandatory delisting

Hoa Binh Group is having accumulated losses many times greater than its equity. Photo: HBC

On July 26, Ho Chi Minh City Stock Exchange (HOSE) sent a notice to Hoa Binh Construction Group Joint Stock Company about the mandatory delisting.

According to Notice No. 1192/SGDHCM-NY, dated July 26, 2024, HOSE said that as of December 31, 2023, Hoa Binh Construction had an accumulated loss of VND 3,240 billion, exceeding the actual charter capital contributed by shareholders (charter capital at the end of 2023 was VND 2,741 billion).

Pursuant to regulations, HOSE announces that HBC shares are subject to mandatory delisting. HOSE will delist the Company's HBC shares according to regulations.

Notably, Hoa Binh Construction announced the 2023 Audit Report on March 30, 2024 to the Ho Chi Minh City Stock Exchange, but it was not until July 26, 2024 that HOSE decided to delist HBC shares.

In terms of business activities, in the second quarter of 2024, Hoa Binh Construction recorded revenue of VND 2,159.92 billion, down 4.8% over the same period, after-tax profit recorded a profit of VND 684.36 billion compared to the same period with a loss of VND 268.24 billion, an increase of VND 952.6 billion. In which, gross profit margin decreased from 17.2% to 4.6%.

During the period, gross profit decreased by 74.4% compared to the same period, equivalent to a decrease of VND 290.13 billion to VND 99.83 billion; financial revenue increased by 121.2%, equivalent to an increase of VND 25.3 billion to VND 46.18 billion. Most notably, business management expenses unexpectedly recorded a negative VND 220.06 billion compared to the same period, a positive VND 527.71 billion. Other profits increased by VND 513.81 billion.

Thus, the gross profit generated by Hoa Binh Construction in the second quarter was not enough to cover financial costs and sales costs. The company escaped losses due to negative business management costs, while other profits increased dramatically.

Hoa Binh Construction explained that the decrease in business management expenses was mainly due to the reversal of provisions of VND 292.8 billion compared to the same period of VND 412.4 billion; at the same time, other income increased due to recording income from liquidation and sale of fixed assets of VND 502.9 billion compared to the same period of VND 5.4 billion.

Accumulated in the first half of 2024, Hoa Binh Construction recorded revenue of VND 3,810.82 billion, an increase of 10.1% over the same period, after-tax profit recorded a profit of VND 740.91 billion, compared to the same period a loss of VND 713.21 billion.

As of June 30, 2024, Hoa Binh Construction had accumulated losses of VND 2,498.26 billion, equal to 71.95% of its charter capital. At the close of trading on July 26, HBC shares fell by VND 40 to VND 7,250/share.

According to many independent analysts, Hoa Binh Construction's business prospects still have many uncertain factors such as the relatively large cash flow from receivables, the civil real estate market has not yet recovered clearly, domestic work sources are still limited and finally, the strategy of expanding to foreign markets needs a long time to have a positive impact on profit margins.

Source: https://laodong.vn/kinh-doanh/co-phieu-xay-dung-hoa-binh-vao-dien-bi-huy-niem-yet-bat-buoc-1372044.ldo