Merging with Tran Anh (code: TAG) may have been a big mistake by technology retail giant Mobile World, as the Hanoi Stock Exchange (HNX) has just announced approving its decision to delist from the stock exchange due to its negative performance.
Accordingly, nearly 25 million TAG stocks worth VND250 billion ($11 million) were officially delisted on September 17 to restructure the firm and find strategic partners. Slightly more than one year after merging with Mobile World, Tran Anh’s business has been unsatisfying, which can be seen in the stock being put on alert on June 25 because of the firm’s negative after-tax profit and the undistributed after-tax profit released in its financial report on March 31, 2018. This negative performance undermined interest in the stock, leading to little to no trading since late April.
More than two months later, Tran Anh’s move to buy back its stocks before delisting may be aimed at acquiring the stocks and delisting at the highest price before a foreseen downturn due to poor business results.
In early July, Tran Anh bought 180,634 TAG stocks, equalling 0.73 per cent of its total offered shares on the HNX before delisting. At the time, Tran Anh held 102,614 TAG stocks since its latest transaction on December 3, 2015, while its parent company Mobile World, as of April 18, owned 24.63 million shares, equalling 99.27 per cent of the charter capital.
Tran Anh’s financial report stated that in the 2017 fiscal year (April 1, 2017-March 31, 2018), its sales revenue reached VND3.53 trillion ($155.6 million), down nearly 14 per cent against 2016.
In addition, Tran Anh’s expenses to source goods occupied up to 88 per cent of its net revenue, leading to a gross profit of VND416.4 billion ($18.3 million), down more than 19 per cent on-year.
Mobile World’s decision to focus on developing the Bach Hoa Xanh chain is supposed to be the reason behind Tran Anh’s slow business.
At the Analyst Meeting on February 8 this year, Mobile World chairman Nguyen Duc Tai affirmed that the firm will target expanding the grocery chain with the investment of VND1.5-2 trillion ($66-88 million), and has no plans to develop Tran Anh or its pharmaceutical chain Phuc An Khang.