Hoa Binh Construction talks about plans to take shares out of control
Mr. Le Viet Hai - Chairman of the Board of Directors of Hoa Binh Construction said that the Company has been implementing comprehensive restructuring to improve production and business performance and overcome the crisis.
Recently, Hoa Binh Construction Joint Stock Company (stock code: HBC) sent a document to the Ho Chi Minh City Stock Exchange regarding measures and roadmap to overcome the situation of securities being warned and controlled.
From January 19, 2024, the Ho Chi Minh City Stock Exchange decided to transfer HBC shares from restricted trading to controlled. In particular, HBC is being monitored due to the company's late submission of audited financial statements for 2021 and 2022. At the same time, this code is being put on warning status from July 13, 2023 because the undistributed profit after tax on the consolidated audit report for 2022 is a negative number.
The Company said that in the past time, the Company has closely coordinated with the auditing unit to complete and publish the audited financial statements for 2023 on time as prescribed on March 30, 2024. In addition, the Company has published the separate and consolidated financial statements for the second quarter of 2024 ahead of schedule. The Company is also trying to complete and publish the separate and consolidated audited financial statements for the 2024 half-year on time as prescribed.
Explaining how to overcome the stock market warning, Hoa Binh Construction said it has been carrying out comprehensive restructuring to improve production and business efficiency and overcome the crisis in an economic situation affected by many adverse events in the country and the world.
Specifically, the Company has issued debt-convertible shares with a total of 73.08 million shares, thereby increasing its charter capital by VND730 billion. The Company is aiming to expand its market for construction of industrial works, infrastructure, social housing and develop foreign markets.
For the infrastructure construction segment, the Company said it will participate in potential projects and increase the revenue proportion of this segment because the period 2024-2025 is the peak of public investment disbursement. For industrial construction, the Company said it will continue to implement the strategy of developing value in the processing and manufacturing industry market following the wave of investment shifting to Vietnam.
Civil construction used to be a key field, but due to the frozen and difficult real estate market, the Company is looking for reputable customers with good financial potential. The Company also wants to expand its construction services in the world market, cooperating to provide services related to construction, building materials and design.
In addition, Hoa Binh's leadership said it will mobilize human resources to collect outstanding debts, using many solutions such as resolving debt disputes through economic courts or international arbitration.
“We believe that we will succeed in the comprehensive restructuring strategy we have proposed,” Mr. Le Viet Hai, Chairman of the Board of Directors of Hoa Binh Construction, wrote in a document sent to the Ho Chi Minh City Stock Exchange.
In the second quarter of 2024, Hoa Binh Construction recorded revenue of VND 2,160 billion, down 4.8% year-on-year. Profit after tax reached VND 684 billion while in the same period it lost VND 268 billion, an increase of VND 952 billion. Gross profit decreased by 74.4% year-on-year, equivalent to a decrease of VND 290 billion to approximately VND 100 billion.
The gross profit generated by Hoa Binh Construction in the second quarter was not enough to cover financial expenses and sales expenses. The bright spot in this period came from the reversal of more than VND 220 billion in provisions for business management expenses, while in the same period last year this expense was VND 528 billion. Thanks to that, the Company reported a profit after tax of VND 684 billion, a significant improvement from the loss of more than VND 268 billion in the same period in 2023.
In the first half of 2024, Hoa Binh Construction recorded revenue of VND 3,811 billion, up 10.1% over the same period. Profit after tax reached about VND 741 billion, an improvement compared to the loss of VND 713 billion in the same period.
In 2024, Hoa Binh Construction plans to have total revenue of VND 10,800 billion, an increase of 43.3% over the same period, with an expected profit after tax of VND 433 billion compared to a loss of VND 1,110.7 billion in the same period. In the first half of the year, the Company has completed 35.3% of the revenue plan and 171% of the profit target.
On the stock exchange, HBC shares are currently trading at 5,320 VND, the lowest level in the past 4 years. The trading volume of this stock in the last 10 sessions is more than 712,000 units. The market capitalization is about 1,847 billion VND.
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