Shareholders suggested that Hoa Phat learn from TGDD to lend at an interest rate of 6 – 7%, and Chairman Tran Dinh Long frankly expressed that there is a place where the interest rate is 18
At the 2022 annual shareholder meeting of Hoa Phat Group (Stock Code: HPG) held on the morning of May 24, many investors were interested and discussed about the company’s cash volume of more than VND 46,000 billion.
There are investors who think that keeping such a large amount of cash is too expensive, so they should pay more dividends in cash to shareholders or divide it into parts to deposit in the bank in terms of 6 months, 12 months, 18 months, etc. Some investors suggested that Hoa Phat’s management learn how Mobile World Investment Joint Stock Company (Stock Code: MWG) manages money “like a bank”.
In the current market, Hoa Phat is the enterprise holding the most cash (VND 46,300 billion) while MWG ranks 12 with about VND 14,900 billion. MWG’s cash is less than 1/3 of Hoa Phat’s cash, but MWG’s deposit interest is half of Hoa Phat’s.
Of the 14,900 billion dong in cash, nearly 11,700 billion dong was used by MWG to deposit in banks and invest in bonds with terms from 6 months to 1 year and earn interest at interest rates ranging from 5% to 8.65%/ five.
In addition, MWG also provides short-term loans of VND 895 billion to securities companies with terms from 3 to 6 months and enjoys interest rates from 6% to 6.96%/year.
During the period, interest from deposits of MWG reached nearly VND 211 billion, while interest expense was only VND 200 billion.
Profit from financial activities of MWG is about 148 billion dong
As for Hoa Phat, most of the group’s money is deposited in short-term banks, the loan amount is 194 billion VND, quite small compared to 46,000 billion VND. Hoa Phat’s profit from deposits in Q1 was nearly VND417 billion, not enough to cover interest expenses of VND597 billion.
Hoa Phat’s profit from financial activities is about VND 342 billion
We can’t be adventurous because the destiny to develop Dung Quat 2 is important
At the meeting, Mr. Tran Dinh Long shared, “A lot of people criticize Hoa Phat about the use of money, I want to say that the amount of cash of 46,000 billion we cannot be adventurous, many credit institutions commented why You spend money like that, 1 year earn 400-500 billion more, but the destiny to develop Dung Quat 2 is important.”
Hoa Phat Dung Quat 2 Iron and Steel Production Complex Project has an area of 280 hectares, an expected capacity of 5.6 million tons of steel per year, expected to be deployed right in 2022, the project will increase Hoa’s steel output. Generate 14 million tons by 2025.
Mr. Long is putting all his energy and capital to complete this project on time. Capital need for Dung Quat 2 is nearly 80,000 billion VND, domestic banks have 35,000 billion VND, still short of 45 trillion VND. This is the first time in the history of a Vietnamese bank that a business borrows VND 35,000 billion.
According to Mr. Long, with the size of the group’s revenue, it is necessary to ask for 20 trillion “liquid money” to ensure its solvency, even the finance director also requires 30,000 billion.
Mr. Long also said that there were places where Hoa Phat also asked Hoa Phat to lend money and pay interest rates from 18 to 20%, which Hoa Phat refused.
In 2021, Hoa Phat’s revenue and profit will reach VND 150,865 billion and VND 34,521 billion, 4 times higher than before Hoa Phat started building Hoa Phat Dung Quat 1 Iron and Steel Complex 5 years ago. . This is also a record profit in the history of the Group as well as that of an industrial manufacturing company in Vietnam.
In which, the steel sector (including iron and steel products) still plays the leading role and is the core business of Hoa Phat. Revenue and profit after tax of this segment account for 94% and 96% of the Group, respectively. Construction steel and Hoa Phat steel pipe continued to maintain the No. 1 market share in the market at 32.6% and 24.7% respectively. Therefore, when Dung Quat 2 project comes into operation, it will create great resources for Hoa Phat to create greater value.
In the trading session on May 26, HPG’s share price increased by 1.45% to the price of 35,000 VND/share, a discount of about 40% since the peak in October 2021 when the price fell to about 58,000 VND/share.
at Blogtuan.info – Source: cafebiz.vn – Read the original article here
