Pomina Steel (POM) shares lose 44% value due to sell-off by chairman's family

POM shares lose 44%, chairman's family continuously divests capital

Recently, the family of Mr. Do Duy Thai - Chairman of the Board of Directors of Pomina Steel Corporation (Code: POM) has continuously divested capital and sold millions of shares. This move has caused POM shares to continuously fall in price and has now fallen by nearly half compared to the peak it reached.

Specifically, Ms. Do Thi Kim Ngoc, sister of Chairman Do Duy Thai, registered to sell 5,531,835 POM shares to reduce her ownership ratio from 2.82% to only 0.84% of charter capital. The transaction was conducted from December 7, 2023 to January 4, 2024.

This is not the first time that Chairman Thai's family has registered to sell a large amount of shares, affecting POM's stock price. Previously, in August 2023, Ms. Ngoc also sold 2.3 million POM shares, reducing her ownership ratio from 3.64% to only 2.82% of charter capital. Also in August, Ms. Do Thi Kim Cuc, Mr. Thai's sister, also sold 3 million shares, reducing her ownership ratio to 1.83% of charter capital.

Pomina steel shares price 44 before the chairman's draft board photo 1 — POM shares lost 44% in price due to 'flood' of sell-offs by the chairman's family (Photo TL)

Another sister of Mr. Thai, Ms. Nhung, from November 15, 2023 to December 14, 2023, also registered to divest all 6,571,727 POM shares, reducing her ownership ratio from 2.35% to 0%.

Also at the end of November, Ms. Nguyet, Mr. Thai's sister, registered to sell 3.5 million POM shares, reducing her ownership ratio from 1.64% to 0.39% of charter capital. The transaction period is from November 22, 2023 to December 20, 2023.

In addition, another sister of Mr. Thai, Ms. Do Thi Kim Lang, registered to sell 353,788 POM shares, reducing her ownership ratio to 0% of charter capital.

Before the consecutive divestment transactions of Chairman Thai's family, POM code price decreased from 8,450 at the peak on July 18, 2023 to only 4,740 VND/share on December 5, 2023, equivalent to a decrease of nearly 44% after only a few months.

Losing 647 billion in the first 9 months of the year, POM is sure to fail its 2023 business plan

The Thai chairman's family's stock sell-off took place in the context of Pomina Steel's business results continuously recording losses.

In the most recent Q3 financial report, the company only recorded revenue of VND503.5 billion, down 83.1% year-on-year. The cost of goods sold was as high as VND508.7 billion, causing the company to have a gross loss of VND5.2 billion.

Financial revenue decreased by 32.3% to VND11.3 billion. Financial expenses also decreased by half, to VND58.9 billion. Sales expenses accounted for only VND1.2 billion due to the sharp decline in revenue. Meanwhile, business expenses also recorded a negative VND6.9 billion. POM's net loss from business activities was VND47.1 billion.

After deducting other expenses and taxes, POM recorded a loss after tax of VND110.4 billion. In the same period, the company lost VND715.6 billion and although the loss has decreased sharply, it still shows a gloomy picture of the company's business situation.

In the first 9 months of the year, POM's cumulative revenue reached VND2,948 billion, down 73.5%. The company lost VND647.4 billion after tax. Compared to the plan, POM has currently completed 21% of the annual revenue plan and will certainly break the profit plan due to the deep loss.

Increased long-term debt, cash flow declines sharply

A notable point is that in the asset structure, by the end of the third quarter of 2023, POM's total assets reached VND 10,688.9 billion, down 3.1% over the same period. The company's cash "evaporated" by 93% in the first 9 months of the year, down from VND 206.3 billion to only VND 14.3 billion.

In POM's asset structure, long-term assets are dominating with a large proportion, about 7,343.8 billion VND. Unfinished basic construction costs account for 5,796.9 billion VND.

Regarding capital structure, payables currently account for 81.3% of total capital. The company is borrowing short-term debt of VND5,205.1 billion and long-term debt of VND1,146 billion. Notably, long-term debt tends to increase by 55% in the first 9 months of the year.

Due to business losses, POM's net cash flow from operating activities also recorded a negative VND253.2 billion. Notably, the amount of cash paid for loans amounted to VND168.8 billion, showing that the interest pressure on the company's cash flow is very large.

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