VNG (VNZ) short-term debt increased 14 times, just had to ask shareholders' opinions

VNG Corporation (VNZ) has strong fluctuations in the number of shares of existing shareholders.

In recent days, the shareholder structure of VNG Corporation (Code VNZ) has changed quite significantly. Typically, on July 28, 2023, BigV Technology Corporation bought 1,742,525 VNZ shares to increase its ownership ratio from 5.72% to 11.78% of charter capital.

By August 3, 2023, BigV Technology JSC had purchased an additional 1,741,524 VNZ shares, increasing its ownership from 11.78% to 17.84% of charter capital.

On the other hand, VNG Limited, the parent company of VNG, also sold a large amount of shares up to 3,483,048 shares to reduce its ownership ratio at VNZ from 61.12% to only 49% of charter capital.

vng vnz no ngan han increased 14 times just had to close immediately to get opinion with image 1 — VNG (VNZ) just escaped a loss in Q2, large stock fluctuations, the company is having to seek shareholder opinions (Photo TL)

After the above transactions, VNZ stock price increased rapidly, from the bottom of VND 700,000/share on August 2, 2023 to VND 940,400/share on August 10, 2023. Thus, within just 1 week, VNZ stock price increased by VND 240,400.

Faced with major fluctuations in shareholding ratios and stock prices, VNG has just announced that it will finalize the shareholder consultation on August 29. The specific contents of this consultation have not been clearly announced, but will certainly affect the company's upcoming business orientation.

Continuous losses, VNG just escaped losses in the second quarter of 2023

Not only has there been a major change in the shareholder structure, VNG's business situation also shows many remaining problems as the company has been continuously losing money for many consecutive quarters.

Specifically, VNG has been losing money from Q1/2022 to the end of Q1/2023. In these business periods, the peak loss fell in Q4/2022 with a negative VND547.4 billion. Entering Q1/2023, VNG's revenue reached VND1,852.5 billion but the after-tax loss decreased to only negative VND90.1 billion.

In the second quarter of 2023, VNG's revenue reached VND 2,245.9 billion, an increase of more than 11% over the same period. Gross profit reached VND 1,099.3 billion. Gross profit margin reached 48.9%.

Financial revenue in the period only reached 24.4 billion VND, down half compared to the same period. Meanwhile, financial expenses increased 11 times, from 7.5 billion to 83.7 billion VND. Business activities at affiliated companies also recorded a loss of up to 22.1 billion VND.

VNG's selling expenses and administrative expenses are relatively large, at VND554.3 billion and VND344.4 billion, respectively. Profit after corporate income tax reached VND50.2 billion. Although this is a large number, compared to the scale of revenue and profits achieved before. Therefore, it can be considered that in the second quarter, VNG just barely "escaped losses".

Short-term debt increased by 13.9 times in the first half of 2023 alone

VNG's asset structure as of the end of the second quarter of 2023 also recorded many fluctuations. Of which, VNG's total assets reached VND 9,569.4 billion, an increase of 7.5% compared to the beginning of the period. Cash and cash equivalents were recorded at VND 3,455.3 billion. The company currently has VND 103.2 billion in deposits at the bank.

VNG's capital source has seen an increase in short-term debt, increasing from VND2,786 billion to VND3,284.5 billion. Of which, short-term payable expenses increased by one and a half times to VND1,325.5 billion. Most of which is software copyright costs, doubling compared to the beginning of the year, accounting for VND699.5 billion.

VNG's short-term debt also increased dramatically from 44.4 billion to 615.6 billion VND, equivalent to an increase of 13.9 times. Long-term debt increased from 399.6 billion to 577.9 billion VND. Thus, it can be seen that there is a significant increase in debt in VNG's asset structure. Previously, the proportion of these debts was relatively small.

Owner's equity as of June 30, 2023 was recorded at VND 5,066.2 billion. Of which, equity capital accounted for only VND 358.4 billion. Current undistributed profit after tax accounted for VND 5,152.2 billion.

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