Profits rebound
According to the Hanoi Stock Exchange (HNX), Trung Nam Solar Power Joint Stock Company (Trung Nam Solar Power) has just reported its financial situation in 2023 with profits no longer decreasing but reversing to increase by 11%, to more than 278 billion VND.
Other financial indicators have improved. The debt-to-equity ratio decreased from 2.17 times to 2.15 times. The bond debt-to-equity ratio also decreased sharply from 1.81 to 1.45 times. Return on equity increased from 19.87%/year 2022 to 21.53%. Equity also increased slightly.
The positive changes of Trung Nam Solar Power took place right after the energy giant Trung Nam Group announced the sale of controlling rights in its largest solar power project to a familiar partner.
Previously, Trung Nam Solar Power JSC was a member of Trung Nam Group and the investor of the Trung Nam Solar Power Plant project. The project has a capacity of 204MW, maximum electricity output of about 450 million kWh/year, using more than 700,000 solar panels. This project has a total investment of nearly 5,000 billion VND and is one of the largest solar power projects of Trung Nam.
In recent years, Trung Nam Group has been facing cash flow difficulties. Many businesses in the group’s ecosystem have been slow to pay bonds, while profits have been on a downward trend.
Perhaps due to cash flow difficulties, Trung Nam Group was recently forced to sell controlling interest in a solar power project that is considered a "golden goose" to a familiar partner.
Specifically, in early July, Trung Nam Group announced information about the transfer of control rights at Trung Nam Solar Power, selling 19.9 million shares in this enterprise.
Trung Nam Renewable Energy JSC (a subsidiary of Trung Nam Group) has transferred all 19.9 million shares of Trung Nam Solar Power to Asia Renewable Energy Investment and Development Company Limited (receiving 18 million shares) and Mr. Nguyen Thanh Binh, who has just become Chairman of the Board of Directors of Trung Nam Solar Power JSC (receiving 1.9 million shares)...
Asia Renewable Energy and Mr. Nguyen Thanh Binh will become the guarantors for 12 bond packages worth VND 1,900 billion (due from 2026-2028).
Previously, in June, Trung Nam Solar Power announced a change in its legal representative. Accordingly, Mr. Nguyen Thanh Binh (1981) replaced Mr. Nguyen Dang Khoa and Mr. Nguyen Tam Thinh (Chairman of Trung Nam Group) in this position and Mr. Binh also became Chairman of the Board of Directors of Trung Nam Solar Power.
Withdrawing from the "golden goose", what is left for Trung Nam Group?
Thus, it can be seen that there has been a change in ownership and leadership at Trung Nam Solar Power.
Asia Renewable Energy Investment and Development is a subsidiary of Asia Industrial Technology Corporation (ACIT). ACIT previously owned 49% of the shares of Trung Nam Solar Power Plant.
Therefore, with ACIT receiving additional shares, it is likely that Trung Nam Group has lost control of Trung Nam Solar Power.
ACIT specializes in manufacturing medium and low voltage electrical cabinets for electrical construction. This is a construction company for many renewable energy projects of Trung Nam Group.
Previously, on July 12, Trung Nam Solar Power was fined for not disclosing information on the payment of interest and principal on bonds and financial reports on capital use for a number of years.
Over the past two years, the Trung Nam group has repeatedly requested extensions and delayed repayment of bonds related to renewable energy projects. The group's business results have declined.
In May, Trung Nam Group Chairman Nguyen Tam Thinh was asked to temporarily suspend his exit from the country due to his failure to fulfill his tax obligations. However, the Khanh Hoa Provincial Customs Department later sent a document to the Immigration Department, Ministry of Public Security, requesting that the temporary suspension of Mr. Thinh's exit be lifted.
According to the introduction, Trung Nam Group was established in 2004, focusing on the fields of energy, infrastructure - construction, real estate, electronic information industry. This is a business that started from the infrastructure construction sector, then invested in real estate and hydropower, and recently in the renewable energy sector, with a series of solar and wind power projects. Some major projects such as Trung Nam Thuan Nam solar power (Binh Thuan, Ninh Thuan), Ea Nam wind power, Trung Nam - Tra Vinh wind power...
According to Trung Nam Group's website, by October 2021, Trung Nam Group had contributed 1.63GW of energy to the national grid, leading the private sector in this industry.
However, over the past 2 years, Trung Nam Group and its member businesses have encountered many difficulties.
A member unit of Trung Nam Group, Trung Nam Thuan Nam Solar Power Company Limited, has sent an urgent request to the Government due to the risk of incidents and interruptions in the operation of the Thuan Nam 500kV transmission system. Accordingly, this enterprise has not been able to negotiate with EVN to increase revenue from power generation sources, while having to pay bank interest.
In 2022, Trung Nam Thuan Nam Solar Power Company Limited reported that after-tax profit decreased by 80% compared to the previous year to VND81 billion.
At the end of November 2023, Trung Nam Construction Investment Joint Stock Company (Trung Nam Group) announced information about the late payment of interest due of nearly VND 107 billion for a bond lot with a total value of VND 2,000 billion.
By the end of 2022, Trung Nam Group's equity reached more than VND 27,900 billion. Total liabilities amounted to more than VND 68,100 billion (equivalent to nearly USD 2.8 billion). Total bond debt was about VND 24,270 billion.
In 2022, Trung Nam Group recorded a sharp decrease in profit, only 255 billion VND, compared to 1,635 billion VND in 2021.
Many other member units of Trung Nam Group are also facing difficulties. Trung Nam Dak Lak 1 Wind Power Joint Stock Company (investor of the 600ha Ea Nam wind power plant project) lost 390 billion VND in the first half of 2023, after losing 858 billion VND in 2022. This enterprise is also in a state of late debt to pay bond interest. Trung Nam Solar Power, Trung Nam Tra Vinh Solar Power, Trung Nam Ninh Thuan... all recorded a decrease in profits compared to the previous year.
The surprising reason why EVN suddenly stopped buying Trung Nam solar power . Because the investor constructed the project not according to the approved design, the Department of Construction of Ninh Thuan province handled violations in construction that were not in accordance with regulations and requested the removal of the violating part.
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