Garmex Saigon during normal operation period, the number of workers is up to thousands of people - Photo: QUANG DINH
Ho Chi Minh City Stock Exchange (HoSE) said it will have to carry out mandatory delisting of GMC shares of Garmex Saigon Joint Stock Company according to regulations.
GMC shares slide to 7,000 VND, about to be "kicked" off the floor
Currently, GMC is a controlled securities company according to the decision of HoSE from April 2024 to present. The reason is that the after-tax profit on the audited financial statements of the last two years (2022 - 2023) of GMC is negative.
According to Decree No. 155, shares of a public company are delisted when the following cases occur: the listed organization stops or is forced to stop its main production and business activities for 1 year or more.
In the audited separate and consolidated financial statements for the 2024 semi-annual period of Garmex and document No. 735 dated December 16, 2024 of Southern Accounting and Auditing Financial Consulting Services Company Limited (AASCS), it was confirmed that GMC has been temporarily suspended from its main business production from May 2023 to present.
This garment company headquartered in Ho Chi Minh City does not generate revenue and production costs for orders, only incurring some insignificant costs for retained direct and indirect department staff, maintenance costs, and maintenance of fixed assets and inventories.
Therefore, HoSE said that it will “implement compulsory delisting of GMC shares”. On the stock exchange, the current price of each share is only 7,400 VND, down 75% compared to the beginning of 2021 and down nearly 80% compared to 2018.
Garmex Saigon used to be a famous textile and garment export enterprise in Ho Chi Minh City with a staff of up to 4,000 people.
Looking back at business results data, before the COVID-19 pandemic, Garmex Saigon reached a peak in after-tax profit when it exceeded 100 billion VND in both 2018 and 2019. Also at this time, GMC stock price climbed to the peak of 35,000 VND.
Stock prices often depend largely on the business results as well as the growth potential of the enterprise. From 2023 to now, GMC has had a continuous lack of orders, making the business situation difficult, forcing it to lay off workers to only a few dozen people, and the stock price has also plummeted.
What do investors do when stocks are delisted?
Before Garmex Saigon’s GMC, many stocks were also subject to mandatory delisting on the HoSE, such as HNG of Hoang Anh Gia Lai International Agriculture Joint Stock Company and HBC of Hoa Binh Construction Group Joint Stock Company. After that, HNG and HBC were transferred to the UpCOM floor for trading.
The economy is in trouble, many businesses are continuously losing money or cannot meet the listing conditions, so the number of stocks that are being "kicked out" from the Ho Chi Minh City Stock Exchange tends to increase.
However, investors do not need to worry too much about losing all the money invested in that stock. Because according to current regulations, investors can still trade stocks that are delisted and transferred to another exchange, or request the company to issue a shareholder book if the delisting does not transfer to another exchange.
However, investors must note that when stocks are forced to be canceled, the market price will face the possibility of "unstoppable decline", even losing liquidity even though they are still traded on the UpCOM system.
To avoid risks, investors are advised to consider carefully when buying stocks of businesses that are operating at a loss, are not transparent about information, or are under control...
In addition to mandatory delisting, enterprises can proactively and voluntarily do this. Accordingly, enterprises voluntarily delist if more than 50% of the voting shares of shareholders (not major shareholders) agree to delisting.
After the approval decision of the stock exchange, the company's shares will be canceled.
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