The volatile market witnessed a surprising surge in the stock price of Hoang Quan Real Estate, with HQC shares jumping to VND 4,570 per share at the beginning of the session. The stock had a buying pressure of almost 4 million units while the sell side was wiped out. Apart from the rapid increase, HQC stock attracted investors due to its explosive liquidity. Just after the first hour of trading, HQC had traded nearly 28 million shares, the highest on the stock exchange and equivalent to half of the record trading volume on August 7, 2023.
The breakout in the stock’s price came after the news of Hoang Quan Real Estate successfully raising capital through a private placement. Specifically, after several delays in its capital raising plan, HQC has successfully issued 100 million shares privately at a price of VND 10,000 per share, raising a capital of VND 1,000 billion. The privately placed shares are subject to a transfer restriction for one year from March 4, 2024. After the issuance, the charter capital of Hoang Quan Real Estate has increased from VND 4,766 billion to VND 5,766 billion.
According to the most recent revised plan for the use of the new capital, out of the VND 1,000 billion raised, Hoang Quan Real Estate will use VND 400 billion to buy shares from its existing shareholder, Golden City Investment Joint Stock Company, and use VND 600 billion to buy shares from its own private placement.
It is understood that Golden City Investment Joint Stock Company is the investor of the Golden City social housing apartment project with an area of 3.35 hectares and an investment capital of over VND 1,776 billion. Golden City Investment Joint Stock Company has 5 founding shareholders, including Mr. Truong Anh Tuan – Chairman of the Board of Directors of Hoang Quan Real Estate and owner of 50% of the capital of Golden City Investment Joint Stock Company.
The real estate company successfully raised capital amidst a not-so-optimistic business environment. In the fourth quarter of 2023, HQC reported a net profit of only nearly VND 2 billion, a decrease of 25% compared to the same period last year, despite a 82% increase in revenue to nearly VND 64 billion. The main reason was the high cost of goods sold.
For the whole year of 2023, HQC achieved nearly VND 293 billion in revenue, up 6% compared to the previous year. However, the net profit was only over VND 5 billion, a significant decrease of 73%. Compared to the annual plan, HQC only achieved 17% of the revenue target and a meager 4% of the after-tax profit target.
