Hoa Binh Construction and HAGL Agrico are about to be delisted from HOSE.

While Hoa Binh Construction recorded undistributed profit after tax as of December 31, 2023 exceeding its charter capital, HAGL Agrico has suffered losses for three consecutive years. The two stocks HBC and HNG are at risk of being transferred to trading on the UPCoM floor.

HOSE announced mandatory delisting of HAGL Agrico due to 3 consecutive years of losses.

The Ho Chi Minh City Stock Exchange (HoSE) has just sent a notice of compulsory delisting to Hoa Binh Construction Group Joint Stock Company (HBC) and Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico, HNG). “HOSE will delist the company’s shares according to regulations,” the notice from the Department said.

The Hanoi Stock Exchange (HNX) also announced that all 34.8 million SD6 shares of Song Da 6 Joint Stock Company will be subject to compulsory delisting. The delisting date is August 23 and the last trading date is August 22.

After being delisted, according to regulations, HBC, HNG and SD6 will move down to trading on the UPCoM floor.

In the 2023 consolidated audited financial statements, the undistributed profit after tax as of December 31, 2023 of Hoa Binh Construction Group was negative VND 3,240 billion, exceeding the actual contributed charter capital of VND 2,741 billion. According to Article 120 of Decree 155/2020/ND-CP regulating the delisting of shares, the total accumulated loss exceeding the actual contributed charter capital or negative equity in the most recent audited financial statements before the review period is one of the cases where shares of a public company are delisted.

Meanwhile, HAGL Agrico and Song Da 6 are subject to delisting due to production and business losses for 3 consecutive years. HAGL Agrico reported losses for 3 consecutive years from 2021 to 2023 of VND 1,119 billion, VND 3,576 billion and VND 1,098 billion, respectively. Song Da 6's after-tax losses in the last 3 years were VND 2.3 billion, VND 11 billion and VND 160 billion, respectively.

As of December 31, 2023, HAGL Agrico's accumulated loss amounted to more than VND 8,100 billion, while its charter capital was VND 11,085 billion. The value of equity reached nearly VND 2,257 billion, accounting for a small proportion of the total capital structure of nearly VND 14,100 billion of this agricultural enterprise. Similarly, Song Da 6's undistributed profit after tax was approximately VND 278 billion, "eroding" up to 80% of its charter capital. A larger proportion of capital comes from bank loans, loans from supplier partners, etc.

Latest update on business situation, Song Da 6 continued to suffer losses in the second quarter, but the loss decreased by 77% compared to the same period last year.

“In recent years, the company’s financial situation has faced many difficulties, there is a lack of jobs while debt collection has been affected due to the lack of capital for payment from investors. Meanwhile, late interest payments to credit institutions have also increased costs, affecting business results,” said a company representative.

Also operating in the construction sector, Hoa Binh Construction Group's revenue and gross profit both decreased. However, thanks to the reversal of nearly VND 293 billion in bad debt provisions, while in the same period last year it had to make large provisions, Hoa Binh earned VND 684 billion in after-tax profit in the second quarter of 2024 and VND 741 billion in the first half of the year. By the end of the second quarter, undistributed after-tax profits were no longer negative, exceeding charter capital, reducing the accumulated loss from VND 3,239 billion to VND 2,498 billion.

However, the regulation for delisting is based only on the most recent year's audited financial statements. Not to mention, in many enterprises, there may be large differences in the business results between the self-prepared reports and the audited/reviewed reports. In many cases, this is due to differences in the assessment of provisions.

In early 2024, the Ministry of Finance is soliciting comments on the draft Decree amending and supplementing a number of articles of Decree No. 155/2020/ND-CP of the Government detailing the implementation of a number of articles of the Securities Law. The draft proposes to supplement regulations on delisting. Specifically, adding "Special cases requiring the maintenance of listing shall be considered and decided by the Government". Up to now, the Decree amending and supplementing a number of articles of Decree No. 155/2020/ND-CP of the Government detailing the implementation of a number of articles of the Securities Law has not been amended.

Also related to Decree 155, the State Securities Commission is reviewing regulations and plans to amend Decree 155 to integrate IPO and listing. Currently, IPO and listing are two separate processes, leading to a long time between paying for shares and listing the shares, possibly 3 months or more. The amendment of regulations aims to shorten these two processes, thereby creating more favorable conditions for investors wishing to trade shares and encouraging businesses to list their shares.

Source: https://baodautu.vn/xay-dung-hoa-binh-hagl-agrico-sap-bi-huy-niem-yet-tren-san-hose-d220903.html