Haxaco targets pre-tax profit of 200 billion VND

The Mercedes-Benz distributor has not revealed this year's revenue target, but only announced a plan for consolidated pre-tax profit of VND200 billion, 4.1 times higher than the VND48 billion of last year.

Hang Xanh Auto Service Joint Stock Company (Haxaco, stock code: HAX) has just added documents to submit to the annual general meeting of shareholders, in which it announced the important business target for this year is pre-tax profit. Specifically, the company's board of directors set a target of consolidated pre-tax profit 4 times higher than the 2023 figure, reaching 200 billion VND. The company has not yet informed about its revenue target for this year.

According to Haxco's management, to implement this plan, the company will proactively propose flexible plans on competition, prices, and discount policies to maintain market share. In addition, the company also focuses on controlling financial leverage, strengthening risk management, and planning for possible scenarios. In addition, Haxco's management said that this year it will continue to expand its vehicle business and research and diversify its product portfolio.

“The company is making more efforts in distributing MG-branded cars and entering the electric vehicle segment with Mercedes-Benz and Vinfast ,” the company’s submission said.

Also according to the upcoming shareholder meeting documents, Haxaco will present to shareholders a plan to pay dividends and increase equity capital from equity sources. Specifically, Haxaco's board of directors said that the distributable after-tax profit according to the consolidated financial report as of December 31, 2023 is VND 150 billion and the equity surplus is more than VND 30.5 billion. The company plans to pay dividends and increase capital at a total rate of 18%.

Of which, the cash dividend is 3%, meaning that a shareholder owning 1 share will receive 300 VND. The total amount of money used to pay dividends is 28 billion VND. In addition, Haxaco plans to issue more than 14 million shares, equivalent to the par value of 140 billion VND, to increase its charter capital from 934 billion VND to 1,074 billion VND. The company will issue at a rate of 15%, meaning that a shareholder owning 1 share will have 1 right to receive an additional share and for every 100 rights to receive additional shares, they will receive 15 new shares. After distributing profits, Haxaco plans to retain 12.5 billion VND in profits to transfer to next year.

In an analysis report earlier this year, SSI Research expected Haxaco's sales to increase more strongly in 2024, lower interest expenses due to reduced current inventories and the subsidiaries (car dealers distributing the MG and VinFast brands) starting to make profits. The analysis team gave an expected profit of VND96 billion.

“We assess that the market will still be difficult in the first half of 2024 due to weak consumer demand and buyers' waiting mentality for new car models, but overall in 2024 the market will see a recovery in both quantity and value (thanks to the economic recovery in the second half of the year, new car models launched, the shortage of chips for cars being resolved, as well as more attractive lending interest rates compared to 2023),” SSI Research's report wrote.

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