After more than a decade of difficulties and debt repayment, Hoang Anh Gia Lai Joint Stock Company (HAG), chaired by Mr. Doan Nguyen Duc (Bau Duc), recorded very positive results last year.

According to the consolidated financial report for the fourth quarter of 2023, Hoang Anh Gia Lai reported pre-tax profit in 2023 reaching VND 1,817 billion, an increase of 62% compared to 2022.

In the fourth quarter of 2023 alone, Hoang Anh Gia Lai (HAG) recorded revenue of nearly VND 1,900 billion and after-tax profit of VND 1,108 billion, respectively up 16% and nearly 4.8 times higher than the same period in 2022.

Accumulated for the whole year, HAGL achieved more than 6,930 billion VND in revenue and 1,817 billion VND in after-tax profit. This is the highest profit of the enterprise in the past 12 years.

HAGL's financial health has also improved significantly. By the end of 2023, total short-term and long-term debt will be more than VND7,900 billion, compared to VND28,000 billion in financial debt in 2018.

The reason for the sharp increase in profits and decrease in debt is because HAGL had good business operations last year, favorable for the fruit sector, especially durian which is sold at a very high price.

In 2023, HAGL will carry out a series of asset liquidations. In addition, Hoang Anh Gia Lai will also receive a loan interest exemption from Eximbank, thereby helping quarterly profits increase dramatically.

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Mr. Duc sticks with fruit trees after many ups and downs with hydropower and real estate

Specifically, HAGL sold Hoang Anh Gia Lai Hotel for 180 billion VND to pay off HAGL bonds issued in 2016 to the Joint Stock Commercial Bank for Investment and Development of Vietnam (BIDV).

On December 27, Bau Duc's company decided to sell the University of Medicine and Pharmacy Hospital - Hoang Anh Gia Lai to continue restructuring debt, fulfilling the commitment to be debt-free in the next few years. Accordingly, the Board of Directors approved the transfer of all 9.9 million shares (equivalent to 99%) of charter capital at the University of Medicine and Pharmacy Hospital Joint Stock Company - Hoang Anh Gia Lai to pay the principal of 2016 bonds. The University of Medicine and Pharmacy Hospital - HAGL was established in 2011, in Pleiku city (Gia Lai) with an initial investment capital of 250 billion VND.

In 2023, Hoang Anh Gia Lai Joint Stock Company paid off the debt of 750 billion VND to Eximbank and received a 1,000 billion VND interest reduction.

After a decade of difficulties due to real estate and rubber, HAGL is waiting for a breakthrough thanks to durian

Currently, fruit trees are HAGL’s main business. Among them, durian trees promise to bring in big profits. This is a fruit tree that “returns 4 times its original value” and has a very high price in both the world and domestic markets.

HAGL also said it will plant more durian and increase the area to 2,000 hectares. It is estimated that in 2024, this enterprise will have about 300-400 hectares of durian in Vietnam and Laos for harvest.

In the past few years, Mr. Duc has repeatedly shared with his friends that he felt ashamed because of his failed business and debt. Now, the once famous football boss feels much more comfortable because his debt is insignificant and his business is profitable. The HAGL boss said that he is determined to revive his business for the sake of honor.

Recently, HAGL's HAG stock price has increased sharply from VND 7,500/share in early November 2023 to nearly VND 15,000/share as of now.

The strong rise of HAG shares came after there were signs of cooperation with businesses related to Mr. Nguyen Duc Thuy (Bau Thuy). HAG is expected to shine in the new decade after 10 years of selling assets to pay off debts.

During the 10-year period (2013 to present), in 2023, HAGL is determined to reduce debt the most, beautify the financial report after a difficult decade. This move takes place in the context that HAGL has a major strategic investor, LPBank of Mr. Nguyen Duc Thuy (Bau Thuy) and LPBS Securities.

It can be seen that determination has helped HAGL pay off most of the debt that was previously formed. The money collected through the sale of HAGL Agrico shares as well as the sale of HAGL's assets has helped Bau Duc's business reduce its borrowing burden.

With more abundant cash flow, Mr. Duc is focusing heavily on growing durian trees. This fruit is priced up to hundreds of thousands of VND/kg thanks to favorable exports to China. It is estimated that by 2025, the capacity of the Chinese durian market could reach 20 billion USD.

With a yield of about 25 tons/ha and a high price of sometimes up to 200,000 VND/kg, each hectare of durian can bring growers a few billion VND in profit.

In 2023, HAG's durian area will reach 1,200 hectares, but only a few dozen hectares will be harvested. In 2024, HAGL's durian will be harvested on a large scale. About 700 hectares are expected to be harvested in the fourth quarter of 2024, contributing to HAG's profit of about 2,000 billion VND. By 2026, HAGL's durian growing area will be 2,000 hectares, of which 1,000 hectares will be harvested. HAGL also has 5,000 hectares that can grow more durian.

After many ups and downs, HAGL has gone from being a big player in the real estate sector to hydropower and then rubber. Now, HAGL may focus more on its new strengths after a decade of Bau Duc's management.

Also last year, HAGL finalized the plan to issue 130 million shares privately and is awaiting the decision from the authorities. Bau Duc's company will collect 1,300 billion VND. It is expected to use 700 billion VND to supplement working capital and restructure debt for its subsidiary, Hung Thang Loi Gia Lai Company Limited, through lending for business operations; 330.5 billion VND to pay part or all of the principal and interest of bonds issued by the company on June 18, 2012, code HAG2012.300; and the remaining 269.5 billion VND to restructure debt for its subsidiary, Lo Pang Cattle Joint Stock Company, through lending to pay off debts at Tien Phong Commercial Joint Stock Bank.

130 million shares issued privately to: LPBank Securities JSC (expected to buy 50 million shares); Thaigroup Corporation plans to buy 52 million shares, increasing ownership from 0% to 4.92% of charter capital; and investor Le Minh Tam plans to buy 28 million shares, increasing ownership from 0% to 2.65% of charter capital.

'Breakthrough 1 capital 4 profits', Bau Duc's business has ambition to make a profit of thousands of billions Bau Duc's business is expected to shine in the new decade after 10 years of selling assets to pay off debts and finding a business formula that can bring about a breakthrough. However, the next steps are still debt reduction.