On the morning of March 18, 2024, Hoa Sen Group (HSG) held its annual general meeting of shareholders. One of the important topics shared by Chairman Le Phuoc Vu is that he will stay on to lead the group for a few more years than previously planned, and is considering transferring all shares and management rights of the group to his youngest daughter (born in 2001) after he retires and becomes a monk as he wishes.
At the previous General Meeting, Mr. Vu had shared that he would transfer his assets to a non-profit fund after officially becoming a monk. “In 4 more years, I will become a monk. I have to adhere to the vow of non-possession in Buddhism. Therefore, for the past 3 years, I have been pondering about succession planning and choosing the future leader of HSG,” Mr. Le Phuoc Vu shared at the previous Shareholder Meeting.
However, he has now made a change. While not denying his intention to establish a personal share receiving fund, Mr. Vu stated that this fund would still operate as a company, but with a different name that does not meet his requirements and desires.
“Before I retire, I have decided to choose a business tycoon to hand over the group to, and we have met with this tycoon 3-4 times, but everyone said that I cannot hand it over, cannot sell the group just to gain profits,” said Mr. Vu.
Mr. Tran Ngoc Chu – Vice Chairman of HSG – added that the Board of Directors is considering other directions, one of which is the proposal for Mr. Vu to hand over shares to the next generation of his children. It is known that Mr. Vu’s youngest daughter, born in 2001, is currently studying for two university degrees in Australia.
The Chairman Session representative also noted that this will not happen immediately next year, but at least 7-10 more years, when the chairman’s daughter is stable and Mr. Vu will become a monk, delaying his time of becoming a monk by a few more years.
“I don’t want my daughter to replace me because running the group requires a lot of dedication. She is my daughter and I don’t want her to carry that burden. I also don’t want my child to be a spoiled brat, with lots of money but unable to control greed. But the truth is, I couldn’t find an entrepreneur who meets the criteria. In addition to ability, they must have ethics, a sense of responsibility to the community. I want to step back but I don’t know how. If I sell, Hoa Sen will collapse instantly, collapse in terms of honesty, integrity, and responsibility,” he said.
“If I want to make any changes, it will take nearly 10 more years. My daughter doesn’t want to take over, she cried and said she’s afraid of responsibility. I encouraged her that she can start with a job as an employee, go down to the factory to learn about the work there. In 10 years, if she’s ready, she can do it, if not, I will consider other plans,” he added.
“Today I am announcing for shareholders to be informed, and I have a responsibility to inform when there have been changes compared to the initial announcement,” Mr. Vu said.
In terms of business, Mr. Vu assessed that 2023 was a year of rapid, complex, and clear economic and political fluctuations, posing many challenges not only to the steel industry but also to all production sectors, greatly affecting the revenue and profits of most businesses.
In the context of businesses striving to survive and overcome difficulties, Hoa Sen Group made efforts to achieve a post-tax profit of 30 billion VND. Initial restructuring activities have achieved results as Hoa Sen Plastic Joint Stock Company has recorded net profit for two consecutive years.
“The market scenario in 2024 is unpredictable and there are many fluctuations. However, the Board of Directors continues to survey and study additional industries to anticipate the market’s recovery,” said the Chairman of HSG.
Accordingly, the Board of Directors is developing two business plan scenarios for the 2024 fiscal year. In the first scenario, consumption is projected to exceed 1.6 million tons; net revenue of 34,000 billion VND and post-tax profit of 400 billion VND. In the more positive scenario, consumption is projected to exceed 1.7 million tons; net revenue of 36,000 billion VND and post-tax profit of 500 billion VND.
Mr. Tran Thanh Nam, Deputy CEO of Hoa Sen Group, provided further insights into the market outlook in 2024, forecasting that the price of hot-rolled steel would continue to face fluctuations and steel consumption demand has not yet recovered. In particular, the recent fluctuations in hot-rolled steel prices have affected the group’s business results in the 2022-2023 fiscal years.
To fulfill the 2023-2024 fiscal year plan, Mr. Nam said the group will focus on 4 solution groups: Production-Supply, Business, Cost Control, and Management-Human Resources. Specifically, the group will balance the structure of loans to optimize borrowing costs and minimize exchange rate volatility risks, boost export activities to balance foreign exchange needs for import activities.
