In a portfolio restructuring move, RCC intends to sell up to 1.3 million HMR shares, equivalent to a 23.2% stake, this year. The selling price will be within the trading range during the session, and the sale will be conducted through order matching and/or negotiated deals.
On the stock exchange, HMR shares are currently trading around VND11,000 per share in the morning session of August 27. If sold at this price, RCC could recoup VND14.3 billion. However, if the decision had been made earlier, RCC could have profited significantly as HMR’s price surged over 400% within three months, from early March 2024 to early June 2024, reaching a record high of VND47,000 per share, the highest since its listing on HNX in early 2022. The market price has since dropped by 77%, including five consecutive sessions of declines of nearly 10% each.
| HMR’s share price movement since the beginning of 2024 |
HMR, formerly known as Hoang Mai Stone Quarry, was established in 1969 and is located next to the Unified Railway and National Highway 1A on the border of Nghe An and Thanh Hoa provinces. The company transitioned to a joint-stock company model in 2015, with RCC holding an 87.87% stake before reducing it to 59.69% in 2021. The current Chairman of HMR is Mr. Ta Huu Dien, who is also the Vice Chairman of RCC’s Board of Directors.
HMR is engaged in limestone mining at the Hoang Mai quarry in Hoang Mai town, as per the mining license granted by the Ministry of Heavy Industry (now the Ministry of Industry and Trade) on October 23, 1995. The company’s mining license is valid until October 23, 2025. However, the expansion of the Hoang Mai industrial park and the proximity of the quarry to National Highway 1A have made it challenging to obtain an extension of the mining license due to the potential impact of mining activities on the industrial park’s operations.
The Hoang Mai stone quarry enterprise was fined VND256 million
Upon successful divestment from HMR, RCC will be left with only one subsidiary, Danang Railway Supplies One-Member Co., Ltd., in which it holds a 100% stake. In March 2024, RCC injected additional capital into this subsidiary, increasing its charter capital from VND16.7 billion to VND38.1 billion.
Back in 2018, RCC had a string of subsidiaries, including Cong Truong 791, Cong Truong 792, Cong Truong 793, Construction Railway 796, Cong Truong 798, Cong Truong 875, Mechanical and Construction Works 878, Cong Truong 879, and Export-Import and General Trading. By 2021, the company had divested from these subsidiaries but retained an 8-18% stake in each.
HMR’s business performance has been lackluster, with revenue declining for the last four quarters. In Q2 2024, the stone quarry company recorded revenue of VND6.4 billion, a 34% decrease year-on-year, and a net profit of VND568 million, nearly halving from the previous year. According to HMR, the profit decline was due to railway management companies not implementing regular railway repair packages for 2024, resulting in reduced demand for sleepers and gravel.
RCC’s parent company fared no better, with Q2 revenue reaching VND198 billion, a nearly 5% decrease. After expenses, net profit plummeted by 83% to just under VND2 billion. For the first six months, the company achieved 31% of its annual revenue target and 18% of its profit target, with VND314 billion in revenue and VND2 billion in net profit.
HMR workers at a construction site. Source: HMR
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