A textile company is about to pay dividends 10 times higher than its market price.

Phan Thiet Garment Export Joint Stock Company (PTG) decided to pay this year's dividend to shareholders at a rate of 50%, equivalent to VND5,000, while the stock price on UPCoM is at VND500.

The Board of Directors of Phan Thiet Garment Export Joint Stock Company (stock code: PTG) has just announced a resolution agreeing to pay the first cash dividend in 2024 at a rate of 50%, meaning that each shareholder owning a share will receive 5,000 VND. The record date for shareholders is May 13 and payment is on June 13.

With more than 4.9 million shares in circulation, it is estimated that this company will spend about 25 billion VND to pay interim dividends.

This decision was made after the company's annual general meeting of shareholders approved this year's dividend payment plan of 20-100% of charter capital, meaning the total dividend payment could be up to 50 billion VND.

On the stock exchange, Phan Thiet Garment Export Joint Stock Company shares are currently at VND500, up 20% from VND400 at the beginning of the year. This means that the value of the interim dividend that shareholders are about to receive is 10 times higher than the market price. This is the historical peak of this stock because the dividend payment over many years has caused the market price to adjust to a very low level.

Attractive dividends, but PTG shares have almost no liquidity because there are only 287 shareholders (according to the 2023 annual report). The last time the company's shares recorded a successful order matching was in early February this year with 45,000 shares changing hands.

Phan Thiet Garment Export Joint Stock Company has been trading on the stock exchange since 2010 with a market price of VND 10,000. The company currently has a charter capital of approximately VND 50 billion and has always maintained cash dividends since its listing.

In 2023, the company recorded revenue of VND460 billion, down more than 10% year-on-year. Pre-tax profit reached VND57.4 billion and after-tax profit reached VND46.7 billion, a slight difference compared to the same period. Last year's dividend rate was 20%, meaning the company spent VND10 billion to pay dividends to shareholders.

This year, the company targets revenue of VND506 billion, up 9.87% over last year. Pre-tax profit is expected to reach VND56.8 billion and after-tax profit to reach VND45.5 billion.

The Board of Directors said that this goal was built on the assessment that the world economic situation has many unpredictable fluctuations and that natural disasters and unusual epidemics can affect the company's production and business activities.

In addition, the company believes that competition for garment processing orders with developing countries in Asia is increasingly fierce and the lack of skilled labor is also having a significant impact. However, the company also recognizes that there are some favorable factors such as the increasing image and position of Vietnam, and favorable geographical location, so there is a high possibility that there will be positive changes in orders.

Source