BII after review: Profit dropped by nearly 30%, audit highlighted a series of issues

4 min read

BII shares of Louis Land Joint Stock Company (formerly Bao Thu Industrial Development and Investment Joint Stock Company) were offered on the HNX from September 2014 with a market price of over 10,000 VND/share. By the end of December 2016, BII stock witnessed a sudden plunge to less than 1,000 dong/unit and remained so for the next several years.

In particular, BII has been involved in the case of stock price manipulation, involving Binh Thuan Mineral Joint Stock Company (KSA). At the end of 2019, after the case of stock price manipulation that the mastermind was former KSA Chairman Pham Thi Hinh was indicted, BII shares continued to plunge, continuously falling sharply although bii at that time said that it was no longer related to KSA.

However, the business situation of BII in the following years was not very positive. In 2019, the enterprise lost up to 97 billion dong and was questioned by the audit on its ability to operate continuously. In 2020, the loss continued to be nearly 90 billion dong.

In the market, even though the business results were not positive, this “ice tea” stock code started to emerge from mid-December 2020, with a series of consecutive ceiling gains and sudden liquidity. That pulled the market price up from more than 1,000 dong/share to 3,600 dong/share at the end of the year.

In the first quarter, BII’s shareholder structure fluctuated strongly with the withdrawal of two major shareholders, Do Can and Vu Ngoc Long. In the opposite direction, Mr. Do Thanh Nhan and related units continuously collect shares. At the same time, BII also changed its name, brand identity and moved its headquarters from Binh Thuan province to Ho Chi Minh City. HCM.

BII shares are officially “on par” from April 9, 2021 after a long period of sharp increase, deep decline and liquidity. Then, after the period of adjustment and recovery, from mid-August, BII recorded many sessions of increase in amplitude, bringing the market price to VND24,200 per share (closing on September 10), nearly 7 times higher than at the beginning of the year. In particular, this price is dozens of times higher than the mid-September 2020 (VND 1,300 per share).

As a result, BII’s capitalization also increased sharply from 225 billion dong at the beginning of the year to 1,395 billion dong at the moment.

Commenting on the movement of stock prices, BII’s management said that in the past time, the market price has been flat because the company has not identified its core business. After returning to the “Louis” ecosystem, the Board of Directors is now focusing on real estate to implement the sustainable development strategy, also to match the “Louis” strategy.

Accordingly, BII plans to focus on expanding industrial park real estate to take advantage of the existing land fund, towards the development of commercial and service real estate in the next phases. In the coming time, the enterprise will promote investment attraction and sign land lease contracts in Tan Binh industrial cluster, Thang Hai 1 and Thang Hai 2 industrial clusters and at the same time accelerate the construction of Thang Hai industrial cluster. 3.

Along with that, it will continue to invest in real estate projects, divest capital from unfeasible projects, occupying high capital. The company is planning to issue more shares to mobilize 150 billion dong for production and business activities.

Although the Board of Directors raised a lot of expectations, BII’s business results have not yet recorded a commensurate improvement in the first 2 quarters of the year. Notably, the audit also highlighted a series of issues in the reviewed financial statements.

Specifically, bii’s semi-annual financial report after audit showed that after-tax profit reached nearly VND35 billion, down 27% compared to the independent figure due to the increase in provisioning for hard-to-claim collection worth VND6 billion.

In the report, the auditor emphasized BII’s construction in progress items. Although the enterprise has planned to continue implementing the projects, the auditor still noted the actual progress of the projects.

The audit also noted the issue of BII using all capital contributed at subsidiaries (Dinh Thanh Urban, Louis IC Tan Binh, Louis IC Tri An) to advance ground clearance compensation to implement projects at these companies.

At the same time, BII used the entire capital contribution at Louis Bricks to advance to Louis Decor & Construction Company to carry out the project of building an unburnt brick factory. These have made the audit concerned about the remaining business capital in the maintenance and normal operation of BII.

On the other hand, the audit also noted that BII has divested all capital in Golden Resource Co., Ltd. and recorded losses from the liquidation of this subsidiary in the first 6 months of 2021, stemming from the fact that the enterprise has changed its long-term investment plan compared to the original orientation.

Source: vietnamfinance.vn – Translated by fintel.vn