Tập đoàn Hoa Sen Holds Annual Shareholders’ Meeting
On the morning of March 18, 2024, Hoa Sen Group (HSG) held its annual shareholders’ meeting.
The Board of Directors also proposed the issuance of 5 million ESOP shares at a price of 10,000 VND/share to management staff and key personnel of the company. These shares will be restricted from transfer for one year. The implementation is expected to start from the date of approval at the annual shareholders’ meeting until the next closest annual shareholders’ meeting.
Chairman Le Phuoc Vu shared, “The people working at Hoa Sen are under a lot of pressure and work hard. Their income is only the salary, so this ESOP is a form of compensation, a well-deserved reward, in accordance with the law. This is actually an investment for the future, to ensure that they can dedicate themselves to the company without any worries.”
During the discussion, when a shareholder suggested a higher dividend payout, Chairman Le Phuoc Vu, despite being proud of the company’s good cash flow, maintained a defensive stance.
“Since the end of last year’s general meeting, I mentioned that the 2022-2023 fiscal year of 1 billion profit was a success, a well-deserved reward for the executive board because we had a loss of over 800 billion in Q1. We are both an importer and a manufacturer, handling distribution and exports, so our inventory always needs to be ensured for 4 months.
The last 3 quarters of last year had price fluctuations, especially a weakening in domestic and export demand. A profit of 30 billion last year was a tremendous effort, with no long-term debts, depreciation of nearly 1,100 billion, corresponding positive cash flow.”
“If for any reason we have to close suddenly, we still have money to repay the banks and have a surplus of 600 – 700 billion VND,” Mr. Vu said.
HSG doesn’t take advantage of low-interest loans by depositing money to earn the difference because it “respects the financial structure.”
It is known that HSG is borrowing from a global bank (top 5 in the world) in Vietnamese Dong with an interest rate of 2.3% per year and a term of 4 months.
Chairman of HSG even revealed that the company’s credit limit currently stands at 17,000 – 18,000 billion VND, with an average interest rate of 2.1% per year. HSG respects financial structures, so it doesn’t borrow money and then deposit it in banks to earn a 4-5% interest rate difference.
Photo: HSG’s Annual Shareholders’ Meeting on March 18, 2024.
HSG wants to invest in various sectors, including finance and banking.
In terms of HSG’s perspective, the current political and economic situation is very complex, so it’s better to be cautious. There is still over 4,000 billion VND in retained profit, but stability is the top priority, and the retained profit will be reinvested for the future. If it pays out more than 5%, equivalent to around 300 billion VND, it means using the accumulated profits from previous years.
In its 2024-2029 strategy, HSG is considering expanding its business into various sectors, including: Finance, banking; securities; insurance; real estate; precision engineering and manufacturing; semiconductor technology; real estate (office, housing, residential areas, urban areas); education and training; healthcare; ecological tourism, resorts; financial investment; M&A culture; art, performance, event organization…
The maximum total investment for the expanded sectors will not exceed 5,000 billion VND. While the State is determined to clean up the economy, consolidate society, and create genuine entrepreneurs, Mr. Vu believes this is an opportunity for HSG and no sector should be overlooked.
The IPO plan continues, moving towards listing shares of Nhua Hoa Sen and Ong Thep Hoa Sen.
In the core area, after the Hoa Sen Home building materials and interior supermarket system, as well as the plastic manufacturing and business area managed by Nhua Hoa Sen JSC, operate independently and stably, the Group has the plan to transfer the entire steel pipe manufacturing and business area to Tube Hoa Sen JSC (established on the basis of converting a wholly-owned subsidiary owned by Hoa Sen) in the next 5 years.
Specifically, Hoa Sen Phu My LLC will be considered for conversion into Hoa Sen Tube JSC, with the Group owning 99% of the charter capital. The detailed plan for the conversion of Hoa Sen Phu My LLC into Hoa Sen Tube JSC will be developed, completed, and implemented by the Board of Directors.
Hoa Sen Tube JSC will take over all the infrastructure serving the steel pipe production and business activities (land, factories, machinery and equipment, production lines…) and become the management unit in the steel pipe manufacturing and business sector.
If conditions permit, HSG will develop an IPO plan and list the shares of Nhua Hoa Sen JSC and Hoa Sen Tube JSC.
