On May 17, 2024, HNG shares of HAGL Agrico unexpectedly surged to the ceiling at VND 4,470/share, with no sellers. This increase in HNG took place amid a backdrop of soaring livestock stocks, including HAG of Hoang Anh Gia Lai (HAGL), which also hit the ceiling due to rising pork prices.
Recently, hog prices have been continuously increasing across a wide range, with some areas reaching VND 67,000/kg, equivalent to the peak price in early July 2023. This quickly heated up the livestock stocks on the exchange, including HAG, Dabaco (DBC), and BaF Agriculture (BAF).
In the case of HNG, it is possible that many investors still confuse it with HAG. This has happened more than once in the past.
Although HNG has been separated from HAGL since 2021, it still retains the HAGL Agrico brand, which has been questioned by shareholders at annual general meetings in recent years. At the recent annual general meeting, billionaire Tran Ba Duong stated that the reason for retaining the HAGL Agrico brand is that it is a commercial name that helps sell products at higher prices and is still used in commodity transactions.
Currently, HNG, under the management of Thaco, focuses on three main segments: fruit trees, rubber, and cattle farming on a total area of 27,000 hectares. Thaco Agri is the unit in charge of Thaco Group’s agriculture segment.
Mr. Duong also stated that there is no confusion between Thaco Agri and HAGL Agrico in terms of commercial brands. In essence, the group’s management team still has to manage both companies and commits to keeping them separate.
“Thaco Agri only supports HAGL Agrico. What does HAGL Agrico have? It’s just a shell,” added Mr. Duong. At the same time, he mentioned that he and Thaco only hold a few dozen percent of HNG’s shares but are betting big on this enterprise. ” HNG’s current value is VND 11 trillion, and it has lost VND 8 trillion, leaving only VND 3 trillion, but we are still investing and will continue to invest in 2024,” he said.
In 2024, HNG plans to achieve a revenue of VND 694 billion, up 14.5% compared to 2023. The company expects a net loss of VND 120 billion for the year.
Although still making a loss, this year’s figure shows a significant improvement compared to the previous two years. In 2023, HNG recorded a net loss of VND 1,098 billion.
The recent annual general meeting also announced good news that the company has found a circular agriculture model and expects to return to profitability in 2025. General Director Tran Bao Son shared that the company currently has about 5,000 cows and over 2,000 calves.
Regarding the cattle business, HNG imported cows in 2023 and has been raising them since then. However, to recognize revenue from cattle, the calves need to be raised for another 18 months after weaning, and revenue is expected to be realized in early 2025.
Mr. Tran Ba Duong added that the company imports female cows from Australia, breeds them, and raises them for about a year before they give birth to calves. The calves are then raised for two years before being sold for revenue. HNG plans to sell more calves to the market when the herd is large enough, expected to be in 18 months to two years.
Regarding the large-scale agricultural project in Laos, Mr. Nguyen Hoang Phi, Deputy General Director, said that the company has received approval from the Lao government for the project. HNG will implement this project by merging two subsidiaries: Attapeu Hoang Anh Agriculture Development Company Limited and Quang Minh Rubber and Agriculture Industry Company Limited into a new company called Southern Laos Agricultural Investment and Production Trading Company Limited, inheriting existing assets and land funds.
The project’s investment capital will be structured with 40% of HNG’s equity and 60% of credit capital. The total investment capital is VND 18,090 billion, equivalent to USD 750 million, which will be mobilized according to the project’s progress each year.
Mr. Duong also affirmed that they have found a circular agriculture model, where the output of one product becomes the input for another. He expects HNG to return to profitability in 2025.
