Many stocks face the risk of being forced to leave the stock exchange

Delisting will help the market purge stocks of poor quality. Picture: N.Hiền.

There is no light at the end of tunnel

Up to March 12, the VN Index increased 139 points compared to the end of 2017, correspondingly increased over 14%. Many stocks continue to hit a new high. Investors will also focus strongly in stocks with good business results in 2017 or ones started to recover after the restructuring period. However, the market still recognizes that companies can not escape losses, with even some businesses facing the risk of delisting. According to Decree 58/2012/NĐ-CP, enterprises have been forced to abandon the stock market if their business results have suffered losses for 3 consecutive years or had total accumulated losses exceeding the real capital in audited financial statements or delays in submitting financial statements for 3 consecutive years ...

According to the financial report for the fourth quarter of 2017, these companies such as Saigon Tourist Transport JSC (STT), Vietnam General Export Import Joint Stock Company (TH1), Song Da Electrical Engineering Joint Stock Company (SDE) Saigon Tourist Transportation Company (STT) ... have been continuously losing money for 3 years and are currently facing delisting. March is the deadline for publicizing audited financial statements of listed companies. However, at present only TH1 has published audited financial statements, but there is be no surprise with the remaining businesses because these companies reported financial losses.

Meanwhile, the delisting of Mitraco (MLS) is the biggest surprise in the market because this company had very positive business results in 2016 with a net profit of nearly 21 billion VND. However, unexpected changes in the pork market caused the net profit of MLS in 2017 to negative 45.7 billion, exceeding the charter capital, the equity is only 6.3 billion.

Ho Chi Minh City Stock Exchange (HOSE) recently warned Hoang Anh Gia Lai Joint Stock Co (HAG) and Hoang Anh Gia Lai International Agricultural JSC (HNG) about cancellation of listing if they delay disclosure of audited financial statements for 2017. Previously, HOSE had prompted both companies about late submission of audited financial statements by the parent company and consolidation in 2015, 2016; As a result, both companies have delayed the submission of audited financial statements for two consecutive years. If failing to fully comply with the requirements for submission of audited financial statements for 2017, this will be the third year that HAG and HNG are slow to disclose information and will face delisting.

In addition to the companies that are facing "cancellation" due to poor business results, the market also recorded a number of other stocks under special control, limiting transactions due to violations of disclosure, accumulation of charter capital. For example, An Giang Fisheries Import Export Joint Stock Company (AGF) has repeatedly violated regulations on disclosure of information on the stock market, Binh Thuan Minerals Industry Joint Stock Company (KSA) has repeatedly violated regulations on disclosure of information on the stock market so it was put on alert. Hung Vuong Corporation (HVG), after tax profit of shareholders of parent company HVG in 2016 and 2017, posted losses of 49 billion dong and minus 713 billion dong respectively, Dong Nai (PNC) with net loss before tax in 2017 of 66.51 billion and after tax loss was not disclosed on 31/12/2017 of 105.86 billion ...

The "upstream"

In addition to the less optimistic stories, many companies have also "stepped back" spectacularly at the last minute thanks to sudden profit in the fourth quarter of 2017 to help stocks escape the listing that is already close.

Specifically, after losses in two consecutive years in 2015, 2016 and the first 3 quarters of 2017, SCJ shares of Sai Son Cement Corporation seemed to have a firm grasp of being delisted. However, the company’s financial report in the fourth quarter of 2017 suddenly recorded a net profit of 44.2 billion, not only ending the chain of losses for five consecutive quarters, offsetting the losses in the first nine months, but also recording a surplus of 6.2 billion dong after tax for the year.

Similarly, Song Da 7 Joint Stock Company (SD7) reported 3.6 billion dong of net profit after tax and accumulated 37 million dong, just enough to escape losses of 3rd year in a row. Vietnam Shipping Joint Stock Company (VOS) also unexpectedly reported a net profit of VND242 billion in the fourth quarter in 2017, the company's total profit gained nearly VND11 billion, ending the losses that date back to 2015.

However, these are just a business results based on self-made financial statements by enterprises, the surety of escaping the listing cancellation or not, has to wait on the audit financial statements. However, despite the successful exit, these stocks still need to make great efforts to regain the confidence of investors, as the financial situation still shows many risks need attention.