Ice tea is a humble drink, often associated with affordability. To be fair, let’s assume the price of a cup of ice tea, however temporary, is the lowest in the market at 3,000 VND. At this price, there are 27 stocks on the HOSE and HNX exchanges with market prices equal to or lower than this amount. Among these, the cheapest stock is priced at 1,200 VND, while the most expensive is only 3,000 VND per share.
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List of stocks cheaper than a cup of ice tea in the current market
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Topping this rather unfortunate list is FID (Vietnam Enterprise Investment and Development JSC). As of October 11, FID’s market price stood at only 1,200 VND per share, a 48% decrease compared to the beginning of the year. In second place is CTC (Tay Nguyen Hoang Kim Group), which has maintained a market price of 1,300 VND per share since the start of the year. The last on the list, or the most expensive stock, is NRC from Danh Khoi Group, priced at 3,000 VND per share.
In terms of decline, the top two losers are AMV (Vietnam-America Pharmaceutical and Medical Equipment Production and Trading JSC) and TKG (Tung Khanh Production and Trading JSC), which have fallen by 77% and 76% in value since the beginning of the year, with market prices of 2,100 VND and 2,400 VND per share, respectively. Additionally, there are a few other notable names such as KPF (Koji Asset Investment JSC), priced at 1,820 VND per share, down 68%; ITA (Tan Tao Investment and Industry Corporation), priced at 2,350 VND per share, down 65%; and DAG (Dong A Plastic Joint Stock Company), priced at 1,430 VND, down 56%.
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List of stocks priced below 5,000 VND per share that are currently listed on the stock exchanges
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What are the reasons behind these low stock prices?
Stock prices are influenced by numerous factors, including a company’s fundamentals, business potential, industry outlook, and market supply and demand. However, in most cases, extremely low-priced stocks are often accompanied by deeper underlying issues.
For FID, the stock is currently facing a “combo” of warnings, surveillance, and trading restrictions. The company’s internals are also not positive, as it has been consistently making losses, with the heaviest loss of 4 billion VND in 2020. In 2023, despite a 2.2-fold increase in revenue compared to the previous year, reaching over 84 billion VND, FID still incurred a net loss of nearly 3 billion VND (a profit of nearly 64 million VND in 2022).
| FID has been experiencing a prolonged streak of losses |
In the first half of 2024, FID continued to make a net loss of 2.5 billion VND, with a cumulative loss of over 23 billion VND as of the end of June. The reviewed semi-annual financial statements for 2024 also received a series of qualified audit opinions, mainly related to provisions for personal advances – which FID explained as “advances for handling the company’s work” – and loan contracts with a number of joint-stock commercial banks.
DAG, or Dong A Plastic Joint Stock Company, is currently in the process of suspended trading. Similar to FID, DAG is mired in a mess and is currently going through its most challenging phase in two decades. According to the audited financial statements for 2023 (released in July 2024), DAG incurred a net loss of up to 600 billion VND, mainly due to a provision for inventory devaluation of up to 404 billion VND, which caused a significant increase in cost of goods sold. This massive loss wiped out the company’s track record of “always making a profit” for the previous 16 years, resulting in a negative retained earnings of 588 billion VND at the end of 2023 (compared to a positive 19 billion VND at the beginning of the year). The report received three pages of comments from the auditor, highlighting bad debts – including loan debts and tax arrears – and expressing doubts about the company’s ability to continue as a going concern.
In the first half of 2024, DAG‘s situation did not improve, with a loss of 67 billion VND and equity of just over 27 billion VND. The company generated only 55 billion VND in revenue, equivalent to 6% of the same period last year. The suspension of trading can even be considered fortunate for DAG, preventing the stock price from falling further.
| The huge loss in 2023 pushed DAG into its most difficult phase in two decades |
ITA is another company that has been making headlines. The company, owned by Dang Thi Hoang Yen (or Maya Dangelas), was recently placed under suspended trading at the end of September 2024 due to continued violations of information disclosure regulations.
In reality, ITA‘s financial performance in the recent period has not been disappointing. After a record loss of 260 billion VND in 2022, ITA made a net profit of over 202 billion VND in 2023. In the first half of 2024, ITA continued to make a profit of nearly 64 billion VND, an increase of 66% over the same period, mainly due to the reversal of provisions for doubtful debts and reduced bank interest, along with cost savings in corporate management achieved in the second quarter.
Nevertheless, ITA‘s stock price has continued to plummet due to various controversies surrounding the company. In 2022, the company was ordered by the Ho Chi Minh City People’s Court to initiate bankruptcy proceedings, relating to a debt of approximately 21 billion VND to the Company Limited Trading Services Construction Quoc Linh – a matter that Ms. Yen has consistently denied. This ruling also led to several other lawsuits, which continue to impact the company’s operations, according to ITA‘s explanations in the second quarter of 2024 financial statements.
| ITA stock price has been on a downward trend since the beginning of the year |
Additionally, ITA has often made shocking statements. Regarding the delay in publishing the audited financial statements for 2023 and the reviewed semi-annual financial statements for 2024, Nguyen Thanh Phong – CEO of ITA – claimed that HOSE and the State Securities Commission of Vietnam (SSC) had acted abnormally, creating difficulties for auditing firms and suspending the practice of auditors performing audits for ITA, leading to the departure of these firms. Ms. Yen, on the other hand, asserted that ITA was being sabotaged by malicious forces aiming to acquire the company. In the face of potential delisting, ITA issued a statement implying that the SSC and HOSE would be held responsible.
Another notable name is DDG (Indochina Import Export Industrial Investment JSC, or Indochine). On the market, DDG stock is currently under warning and has recently been placed under surveillance due to violations of information disclosure regulations regarding the reviewed semi-annual financial statements for 2024. The market price on October 11 was only 2,800 VND per share, a 30% decrease compared to the beginning of the year. However, compared to the peak in 2023 – just before the “floor crash” of 19 consecutive sessions – the drop is as high as 93%.
| DDG experienced a series of 19 consecutive floor crashes in 2023, falling to the ice tea price range |
The main reason for DDG‘s situation is the challenges faced in its business operations. In 2023, the company incurred a record loss of nearly 206 billion VND (a profit of 44 billion VND in the previous year). In the first six months of 2024, the company achieved a revenue of over 120 billion VND, only one-third of the same period last year. While it made a net profit of about 6.6 billion VND (a loss of nearly 194 billion VND in the same period last year), this profit was mainly due to the disposal of fixed assets of the parent company.
| Business difficulties are the main reason for the sharp decline in DDG stock price |
Optimistic investors often say that every rain will eventually stop, and that a stock that has fallen will eventually rise again. However, the rain that shareholders of the aforementioned companies are facing may still have a long way to go.
The Pennies-on-the-Dollar Stocks
As of the close of the 11th of October 2024 trading session, the VN-Index stood at 1,288 points, marking a notable 14% increase since the beginning of the year, equivalent to a rise of 157 points. However, not all stocks have fared equally well; some have plummeted or stagnated over the past year, lingering at extremely low prices, often referred to as the “tea-and-chat” zone.
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Van Dat Group JSC (Van Dat Group) has officially listed its shares on the UPCoM Stock Exchange, with the ticker symbol VDG, during the session on September 26th.
