Hodeco's (HDC) Q1 profit drops sharply, chairman's family registers to buy 30,000 shares
Recently, Ba Ria - Vung Tau Housing Development Corporation - Hodeco (HoSE Code: HDC) has just announced information about insider transactions. Accordingly, Mr. Pham Van Bay, brother-in-law of Mr. Doan Huu Thuan, Chairman of the Board of Directors of Hodeco, registered to buy 30,000 shares, increasing the ownership ratio from 15 shares to 30,015 shares.
These shares correspond to an ownership ratio of about 0.02% of charter capital and the transaction is expected to be carried out from June 26, 2023 to July 24, 2023.
Hodeco (HDC) Q1 profit dropped 68.4%, the company continues not to pay cash dividends (Photo TL)
Mr. Bay's registration to buy 30,000 HDC shares took place in the context of this stock code having price increases despite the company's gloomy Q1 business results.
Specifically, from the end of the first quarter of 2023 to now, HDC code has continuously increased from the price range of VND 25,500/share to trading around VND 30,000/share. In the trading session on June 22, 2023, HDC is trading at VND 30,550/share.
In contrast to the price increase, Hodeco's Q1 business results showed a gloomy situation when net revenue reached only 177 billion VND, down 55.8% compared to the same period. The company's after-tax profit also decreased from 98 billion VND in the same period to 31 billion VND, a decrease of up to 68.4%.
Hodeco has not paid a single cash dividend for 6 consecutive years despite continuously reporting profits.
Hodeco operates mainly in the fields of real estate investment and business, construction materials production, and other tourism and real estate services. For 6 consecutive years since 2017, Hodeco has continuously reported profits of hundreds of billions of VND but has not paid out a single cash dividend to shareholders.
Hodeco's most recent cash dividend was in 2016 with a dividend rate of only 10%, meaning that each shareholder owning 1 share will receive 1,000 VND in dividends.
Instead, Hodeco continuously plans to pay dividends in shares at a rate of 20-25% per year. In 2023, according to Hodeco's business plan, the company aims for revenue of VND1,770 billion, an increase of about 13.6% over the same period last year. Profit after tax is expected to reach VND488 billion, an increase of 17.6% and the company will continue not to pay dividends in cash.
Another noteworthy thing is that since 2017, HDC shares have been "drowning" around the price of 10,000 VND/share and have only started to improve since the beginning of 2021, peaking in mid-2022 with a price of up to 43,585 VND/share. To date, HDC shares have dropped to only 2/3 of their peak value.
Losing stock investment, most of the revenue is still "on paper"
Regarding Hodeco's asset structure, at the end of the first quarter of 2023, the company's total assets reached VND 4,505 billion, a slight increase compared to the beginning of the year. However, cash and cash equivalents only accounted for VND 12 billion, and short-term financial investments were only VND 68 billion.
The company also recorded a provision for devaluation of trading securities of up to VND44 billion, showing that the company's securities investment is temporarily at a loss. Deposits held to maturity are only VND396 million.
Meanwhile, short-term receivables accounted for VND1,133 billion with the short-term receivables index of customers reaching VND740 billion. This shows that a large part of the company's assets are still in the form of receivables from customers and have not actually received money.
Hodeco's inventory index also increased slightly from VND1,092 billion to VND1,131 billion. The company is also recording nearly VND300 million in inventory price reduction provisions.
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