The Successful Year of Hoang Anh Gia Lai Group
In the general context of the difficult economy, but with Mr. Doan Nguyen Duc’s (Chairman of the Board of Directors of Hoang Anh Gia Lai Group) skills, 2023 can be considered a successful year when the group brought in nearly 2,000 billion VND in profit, paid off many large debts, and raised the stock price to the highest level in several years.
During the days near Tet Nguyen Dan, Mr. Duc affirmed that he will clear the accumulated losses of Hoang Anh Gia Lai in 2024, settle all debts to become the first company on the stock exchange without any debt, including working capital loans, by 2026.
In 2023, Mr. Duc continuously organized meetings with shareholders of Hoang Anh Gia Lai Corporation (HAGL, stock code: HAG), not to mention the annual general meeting of shareholders to announce the activities and business results of the corporation, as well as answer the questions of shareholders and investors.
At the meetings, Mr. Duc answered almost all of the shareholders’ questions about the development orientation of HAGL and shared his thoughts on the journey of bringing HAGL back from debt to liquidity loss in 2016.
The Chairman of HAGL repeatedly shared his determination to pay off all debts, although according to him, HAGL’s debts are all secured and insignificant compared to companies of similar scale but still get entangled in debt issues.
Mr. Duc at the year-end shareholder meeting in 2023
On the 23rd day of the last lunar month in the year of Quy Mao (February 2, 2024), HAGL announced that it had paid off 357.52 billion VND of principal debt of the HAGLBOND 16.26 bond issued at the end of 2016. Previously, in November 2023, HAGL had paid off 200 billion VND of principal debt for this bond, using the proceeds from the recovery of debts from Hoang Anh Gia Lai International Agriculture Joint Stock Company (HAGL Agrico).
In mid-December 2023, Gia Lai Livestock Corporation (a subsidiary of HAGL) paid 750 billion VND to the Export-Import Bank of Vietnam (Eximbank) to settle all loans from 2014.
Notably, to settle this long-standing loan, HAGL was granted a reduction of nearly 1,425 billion VND by Eximbank, including part of the outstanding interest, the entire overdue interest, and late payment penalties. This amount was recorded as expenses in previous years, so it becomes HAGL’s profit this year.
According to HAGL’s 2023 financial report, the company’s after-tax profit is 1,817 billion VND, the highest level since 2011 and only lower than the golden year of HAGL in 2010 with a profit of 2,081 billion VND when it was involved in real estate business.
Mr. Duc treats shareholders with durian harvested in the Central Highlands at a 5-star hotel in Ho Chi Minh City
To pay off the debts, HAGL’s funds come not only from business profits but also from continuous liquidation of assets such as HAGL hotels, HAGL Agrico stock, and the ongoing sale of HAGL hospitals and Bapi HAGL stock (the company that manages the pork and banana retail chain of HAGL).
In 2023, HAGL also announced plans to issue private shares to professional investors worth VND 1,300 billion, equivalent to 130 million shares, with the purpose of repurchasing bonds before maturity, restructuring debts for subsidiary companies, and supplementing working capital.
After multiple adjustments, the current list of investors includes: Mr. Le Minh Tam, LBBank Securities Joint Stock Company, and Thaigroup Corporation – if the issuing plan is successful, Mr. Duc can achieve the goal of eliminating accumulated losses this year.
Packaging of exported bananas at HAGL
In terms of business activities, in the past year, HAGL has focused on farming (bananas and durian) and pig farming. Among them, the durian segment has incredible profitability at a 1:5 ratio but the harvested durian volume is still low, mainly relying on this year and the following years; the banana segment has been stable as HAGL has had many customers, so there is no concept of inventory, only high or low prices for sale.
Regarding the pig farming segment, it used to be Mr. Duc’s trademark when he marked his comeback with the product “pigs fed with bananas” by utilizing the waste bananas after export, but it has faced difficulties when supply exceeds demand and prices are low.
In 2024, the brightest segment among the 3 main products of HAGL is still durian as supply is still insufficient for demand and Vietnam’s ability to export frozen durian to the Chinese market.
For the pig industry, according to experts’ forecasts, the first half of 2024 will not have significant changes, while banana exports in late 2023 are no longer as favorable as in the previous 2 years. Therefore, to achieve HAGL’s annual profit plan of billions of VND in 2024 will not be easy.
HAG stock price surge
With many positive developments, HAG stock has been on an upward trend in the past 12 months. In March 2023, the HAG stock price was only at 7,300 VND per share, while at the end of January 2024, it reached 14,700 VND per share, doubled compared to the same period last year and the highest level in several years.
Before the start of the Lunar New Year holiday in 2024, HAG stock was at 13,150 VND per share, still at a high price range within the past 12 months.
