Losing hundreds of billions due to stock investment, where does Tri Viet Asset Management get money to buy treasury stocks?

Tri Viet Asset Management (TVC) approved the repurchase of 10 million shares

Recently, at the Tri Viet Asset Management Group's General Meeting of Shareholders held on June 24, 2023, the company's shareholders approved the repurchase of up to 10 million shares. This repurchase amount corresponds to 8.43% of the total outstanding shares. The repurchase plan will be carried out in 2023.

Lost hundreds of billions of dollars in stock investment, Tri Viet Asset Management, where did it get the money to buy shares in category 1? — TVB and TVC plan to spend tens of billions of dong to buy back shares (Photo TL)

It is expected that to buy back these 10 million shares, TVC will need to spend about 68 billion VND.

Regarding the price movement of TVC shares, in the trading session on July 6, 2023, this code is still recording a price of VND 6,400/share. Although this price has recovered from the bottom of VND 4,000/share created in November 2022, compared to the peak of VND 9,800 reached in early August 2022, it is still quite far.

In addition, a company in the same ecosystem as TVC, Tri Viet Securities (TVB), has also planned to buy back 5 million shares, equivalent to 4.46% of the total outstanding shares. It is estimated that TVB will have to spend 28 billion VND.

Q1 revenue down 76%, profit only recorded thanks to provision reversal

In the consolidated financial report for the first quarter, TVC's net revenue reached 18 billion VND, down 76% compared to the same period last year. Cost of goods sold also decreased but only by 66%. This caused the gross profit in the period to only reach 14 billion VND, the gross profit margin decreased from 83% to only 76%.

In the first quarter, the company recorded almost no financial revenue. Meanwhile, financial expenses recorded a negative 79 billion VND thanks to the reversal of securities depreciation provisions of up to 83 billion VND. Thanks to this financial target, the company's after-tax profit reached 80 billion VND, 2.6 times higher than the first quarter of last year.

With the fluctuations in revenue in the first quarter, TVC said that the reason was because brokerage and margin lending activities were showing signs of decline, recording only 4 billion and 13 billion VND respectively. Meanwhile, financial revenue also decreased sharply, causing the company's profits to be significantly affected.

Another reason that many shareholders are concerned about is that the Chairman of the Board of Directors of TVC, Mr. Pham Thanh Tung, has also been prosecuted for stock market manipulation due to his involvement in the manipulation of two stock codes BII and TGG.

Temporary loss of 292.9 billion VND in stock investment due to portfolio price decrease

According to the first quarter 2023 financial statements, Tri Viet Asset Management's total assets were recorded at VND 2,248.5 billion, with the structure accounting for the majority of short-term assets. Meanwhile, cash and cash equivalents accounted for VND 81.6 billion.

In TVC's asset structure, recorded securities investment amounts to VND 1,301.5 billion. However, at the end of the first quarter of 2023, the provision for risks of devaluation of trading securities recorded a negative VND 292.9 billion. This means that Tri Viet Asset Management is temporarily recording a loss of VND 292.9 billion due to the devaluation of securities.

Regarding Tri Viet Asset Management's stock portfolio, most of the codes have decreased in price. Most notably, the investment of VND897.4 billion in HPG code of Hoa Phat Group, the original value recorded was VND897.4 billion but the fair value recorded in the first quarter only reached VND622.6 billion.

WithFPT stock code, the amount of holding recorded at the original value is 289.4 billion VND, the provision for depreciation is about 1.8 billion VND. Other significant stock codes in the portfolio include: MWG, TDH, MBB, NKG, DDV...

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