Hoa Sen Group’s newest dissident is major foreign shareholder Tundra, which has officially sold 1.36 million stocks, equaling 0.4 per cent of the charter capital of one of the Vietnamese largest steel makers.
******** stated that foreign investor Tundra Vietnam Fund is not a large shareholder of Hoa Sen Group (code: HSG) since June 5, as its current ownership rate is 4.78 per cent (large shareholders are counted from 5 per cent). Tundra’s divestment from Hoa Sen Group took place as the HSG stock has increased value three times to reach VND12,850 on June 5, after hitting the low-point in the past 52 weeks at VND10,600 on May 31. It is estimated that Tundra could earn VND17.5 billion ($770,925) from the divestment.
Reacting to the falling stock price, at Hoa Sen Group’s shareholders' meeting in this January, Le Phuoc Vu affirmed that the firm is at the peak of its development. However, some products are losing market share, while the firm’s debts are constantly increasing. Many large shareholders of the steel giant have been completely divesting HSG despite the low stock price, as they were unoptimistic of the company’s future performance.
Most recently, Tam Thien Tam One Member Ltd., managed by Hoang Thi Hoang Xuan (the wife of Hoa Sen Group’s chairman Le Phuoc Vu), sold its entire 19.24 million HSG shares, equaling 5.49 per cent of the charter capital. The transaction was performed with the value of VND230 billion ($10.1 million).
In this February, Amersham Industries Limited sold 600,000 HSG stocks. The foreign investor made quite a deal, as the divestment took place quickly and earned about VND14 billion ($616,740).
In 2014, Vietnam Enterprise Investment Ltd. sold 300,000 stocks. After the transaction, the firm retained 7.9 million HSG shares, equaling 2.25 per cent of Hoa Sen Group’s charter capital, officially leaving the group of the firm’s largest shareholders.
In 2018’s first five months, Hoa Sen Group’s stock fell by 51.8 per cent, going from VND23,976 ($1.05) to VND11,550 ($0.5), scaring away shareholders. Thus, its market capitalisation was reduced by VND4.347 trillion ($191.4 million).
The firm’s first quarter financial report shows that its revenue growth increased by 23 per cent on-year but profit only reached VND87 billion ($3.83 million), only one-fifth of the figure from the same period last year.
Experts said that raising debts to maintain its market share (from 33.1 per cent in 2016 to 34.7 per cent in 2017) has reduced Hoa Sen Group’s rates of return.