VNG (VNZ) continues to lose another 200 billion VND in 2022 after audit

After auditing, the loss in 2022 of VNG Corporation (VNZ) has reached thousands of billions

VNG Corporation, once considered Vietnam's technology unicorn, when it moved to UPCoM in February 2023, stunned investors with its skyrocketing price increase from VND240,000/share to VND1.35 million/share. This is also the record price that a stock has ever achieved on the Vietnamese stock market.

However, in contrast to this unusual price increase, VNG's business situation is extremely dire with a loss of hundreds of billions of dong recorded in 2022.

Stocks hit record highs, Vuong continues to lose another 200 billion dong in 2022 after auditing image 1 — VNG Corporation (VNZ) lost another 200 billion VND in the audited financial statements for 2022 (Photo TL)

Most recently, the company's audited financial statements were re-published, further confirming this as the company's net loss increased by 200 billion VND.

Specifically, VNG's net revenue in 2022 was recorded at VND 7,800 billion, cost of goods sold accounted for VND 4,364 billion. The company's gross profit reached VND 3,437 billion, equivalent to a gross profit margin of 44%.

Although gross profit reached thousands of billions, the huge selling costs and business management costs, respectively at 2,728 billion VND and 1,579 billion VND, eroded all profits, causing VNG to record a net loss of up to 1,077 billion VND.

This post-audit loss increased by VND200 billion compared to before the audit. The majority of the difference lies in the business management costs, which increased by 9% compared to the self-prepared financial statements. In addition, VNG is also setting aside nearly VND2.7 trillion for its subsidiaries.

VNZ shares of VNG Corporation are restricted from trading

Recently, the stock code VNZ of VNG Corporation was put on restricted trading list by Hanoi Stock Exchange (HNX) due to late submission of audited financial statements for 2022 from May 25, 2023. With this decision, VNZ shares will only be traded on Fridays every week.

Before the above announcement, VNG explained the reason for the delay in submitting audited financial statements was because the company had to prepare financial statements in parallel according to two accounting standards: Vietnamese (VAS) and International (IFRS).

The above information also caused VNZ stock price to fluctuate slightly. In the trading session on May 31, 2023, VNZ stock price was recorded at VND 771,900/share, down nearly half compared to the peak of more than VND 1.3 million/share last February.

Stock price hits ceiling when chairman is dismissed, company suffers losses of thousands of billions of dong

VNG's loss situation is in stark contrast to the company's stock price increase, which peaked with a loss of VND547 billion in the fourth quarter of 2022. By the first quarter of 2023, the company's after-tax loss had decreased to only VND90 billion.

By the end of the first quarter of 2023, the company's total assets reached VND 8,976 billion, a slight decrease compared to the beginning of the year. Of which, liabilities accounted for VND 3,954 billion, equity accounted for VND 5,022 billion. Short-term debt accounted for about VND 2,749 billion.

Another notable development that occurred right before the unusual price increase of VNZ code was that in early February 2023, the Chairman of the Board of Directors of VNG Corporation, Mr. Le Hong Minh, was suddenly dismissed, and his replacement was Mr. Vo Sy Nhan, who was appointed to replace Mr. Minh from February 1, 2023.

Mr. Le Hong Minh was the founder and has held the position of Chairman of the Board of Directors and General Director of VNG since 2004. Mr. Minh is also the largest shareholder of the company with up to 10% of shares, and represents 8% of shares.

As for Mr. Vo Sy Nhan, who replaced Mr. Minh, Mr. Nhan is also one of the four independent members of the Board of Directors elected at the Extraordinary General Meeting of Shareholders in 2022. Mr. Nhan is also the CEO of Empire City, co-founder of GAW NP Capital fund, and Vice Chairman of Tien Phuoc Company.

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