Why is Century Real Estate's CRE stock margin cut?

DNVN - Ho Chi Minh City Stock Exchange (HoSE) has just announced a list of 86 listed securities on HoSE that are not allowed to be traded on margin (margin loans), as of May 9, 2024. Notably, there is the code CRE of Century Real Estate Joint Stock Company.

According to HoSE, the reason why the CRE code of Century Real Estate Joint Stock Company had its margin cut is because the after-tax profit of the parent company's shareholders on the audited financial statements for 2023 is negative and the audited consolidated financial statements for 2023 have an opinion that is not a fully acceptable opinion of the auditing organization.

Previously, on April 3, HoSE announced that CRE shares would be placed on warning status from April 10, 2024. The reason is that the auditing organization has an exception opinion on the 2023 audited financial statements of the listed organization, which is a case of securities being warned according to regulations.

The audit opinion except in the audited consolidated financial statements clearly stated that in the consolidated financial statements, CenLand presented that the investor of the Hoang Van Thu New Urban Area project (commercial name is Louis Hoang Mai project) has not fully paid the land use fee for phase 3 of the project. Therefore, the progress of the implementation of the business cooperation contract for this project may be slower than expected.

CenLand is headquartered on the 1st floor, Building B Sky City, 88 Lang Ha, Lang Ha Ward, Dong Da District, Hanoi.

In the report explaining the resolution of the situation of securities being periodically warned in the first quarter of 2024, Cenland said that Cenland, Galaxy Land and Trustlink are cooperating to develop the Hoang Van Thu New Urban Area project. In which, Hoang Mai Urban Development Investment Joint Stock Company is the project investor, while Cenland, Galaxy Land and Trustlink are the group that buys the investor's products in the project for further implementation.

With the land use fee payable for phase 3 of 1,426.8 billion VND, Hoang Mai Urban Development Investment Joint Stock Company - Investor of Hoang Van Thu New Urban Area project has paid 758.7 billion VND, meaning it still has to pay an additional 668.1 billion VND.

The reason why investors have not paid enough land use fees is due to a number of objective reasons such as the land use fees being too large, so investors need time to balance and arrange finances.

Cenland further explained that in the current difficult economic context, business and sales are affected, leading to the expected revenue to pay land use fees not being as planned.

As of April 26, 2024, the investor Hoang Mai Urban Development Investment Joint Stock Company has paid an additional 100 billion VND in land use fees, with a cumulative payment of more than 858 billion VND (still owing 568.8 billion VND).

Regarding the collection of receivables from Hong Lam Xuan Thanh JSC and related parties, Cenland said it has been actively working with Hong Lam Xuan Thanh JSC on financial capacity and reasons for tax arrears over the past period. Hong Lam Xuan Thanh JSC has a total tax debt and late payment of VND 70 billion, of which the late tax payment is mainly value added tax (the remaining deductible value is more than VND 40 billion).

Therefore, if deducted, the actual amount to be paid to the State budget is only about 30 billion VND.

Regarding business results, in the first quarter of 2024, CenLand recorded revenue of VND 493.66 billion, an increase of 826.5% over the same period. After-tax profit recorded a profit of VND 8 billion, of which the gross profit margin decreased sharply from 48.3% to 16.2%.

CRE shares have been falling for the past three consecutive trading sessions. At the close of trading on May 9, CRE shares fell 0.12% to VND8,140/share. Previously (on May 8 and 7), CRE shares were priced at VND8,150 and VND8,270, respectively.

Thu An

Source: https://doanhnghiepvn.vn/kinh-te/chung-khoan/vi-sao-co-phieu-cre-cua-bat-dong-san-the-ky-bi-cat-margin/20240510114003967