Stock Market

What Did the CEO of Fat Racing Say About the Record Loss Wiping Out Shareholder Equity?

Fat Racing Corporation (UPCoM: DFF) has plunged into negative equity following a record-breaking loss, leading to trading restrictions on its shares. Company executives attribute the downturn to soaring borrowing costs and a sluggish construction market, which have prolonged the business's operational decline.

Administrator

15 November, 2025

Shareholder Equity of DFF Turns Negative at VND 473 Billion by Q3 End

In a letter to regulatory authorities, CEO Do Quoc Phuong stated that the construction market’s sharp slowdown post-pandemic has severely impacted DFF‘s core business of foundation construction. Since 2023, tightened credit conditions have led to soaring interest rates, while stalled projects have hindered the company’s cash flow improvement.

Consequently, Q3/2025 marked the largest loss in the company’s history: a net loss of VND 368 billion. The primary pressure came from financial expenses totaling VND 378 billion, significantly outweighing the gross profit of VND 15 billion from construction activities.

The accumulated loss for the first nine months exceeded VND 711 billion, pushing the total loss to nearly VND 1.3 trillion and causing shareholder equity to shift from a positive VND 237 billion to a negative VND 473 billion.

Financial reports reveal mounting financial strain. Short-term payables and liabilities surged to VND 430 billion, primarily in Q3. Receivables from customers reached VND 990 billion out of total assets of approximately VND 2.8 trillion, while VND 619 billion remains tied up in short-term prepayments to partners.

DFF‘s financial challenges are further evidenced by delays in repaying principal and interest on a VND 300 billion bond. Chairman DFF Le Duy Hung previously explained that slow payments from developers have left insufficient cash to meet debt obligations.

By Q3 end, short-term debt stood at nearly VND 1.4 trillion, with long-term debt at VND 564 billion. Short-term interest expenses alone reached VND 571 billion, a VND 141 billion increase in just nine months.

Soaring Financial Costs Drive DFF‘s Record Q3 Loss

Founded in 2009 in Hanoi, DFF was once a renowned foundation contractor, involved in major projects such as Hoa Phat Quang Ngai Steel Plant, Hoa Phat Port, Saigon Flood Prevention Dyke, and Long Son Cement Plant.

2022 marked DFF‘s peak with revenue nearing VND 1.6 trillion, but it was also the last profitable year. The downturn intensified when the Trung Nam Ca Na International Port project was suspended, leading to significant uncollectible receivables. The 2025 mid-year review report showed bad debt provisions at VND 695 billion and a 71% reduction in workforce compared to the same period last year.

Management is working with banks to restructure debt, accelerate debt recovery, and seek new projects. However, prolonged losses have driven DFF‘s stock price down to VND 700 per share as of November 14, a steep decline from VND 35,000 when it first listed in 2021.

The stock’s sharp fall has led to Chairman Le Duy Hung‘s repeated margin calls by securities firms. His ownership stake dropped from 47.18% at the beginning of the year to 42.15%, and further to 12.25% by September 2025. In 2021, during more favorable conditions, he held up to 62% of DFF‘s capital.