Ice tea is a humble drink, often associated with affordability in Vietnam. 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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Stocks cheaper than a cup of ice tea in the current market
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Topping this less-than-ideal list is FID (Vietnam Enterprise Investment and Development Joint Stock Company). 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. The second cheapest stock is CTC (Tay Nguyen Hoang Kim Group Joint Stock Company), which has maintained a market price of 1,300 VND per share since the start of the year. The most expensive stock on the list, marking the upper limit of the “ice tea” price range, 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 Joint Stock Company) and TKG (Tung Khanh Production and Trading Joint Stock Company), with losses of 77% and 76% in value since the beginning of the year, respectively. Their current market prices are 2,100 VND and 2,400 VND per share. Other notable mentions include KPF (Koji Asset Investment Joint Stock Company) at 1,820 VND per share, down 68%; ITA (Tan Tao Investment and Industry Joint Stock Company) at 2,350 VND per share, a decrease of 65%; and DAG (Dong A Plastic Joint Stock Company) at 1,430 VND, down 56%.
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Stocks with prices below 5,000 VND per share currently listed on the market
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What led to this situation?
Stock prices are influenced by numerous factors, including a company’s fundamentals, business potential, industry outlook, and market supply and demand dynamics. However, more often than not, extremely low-priced stocks tend to have deeper underlying issues.
For FID, the stock is currently facing a “combo” of warnings, surveillance, and trading restrictions. The company’s internal situation is also less than ideal, with continuous losses, the heaviest being a loss of 4 billion VND in 2020. In 2023, despite a twofold increase in revenue compared to the previous year, totaling over 84 billion VND, FID still incurred a net loss of nearly 3 billion VND (compared to a meager profit of 64 million VND in 2022).
| FID has been experiencing prolonged losses |
In the first half of 2024, FID continued to post a net loss of 2.5 billion VND, with cumulative losses 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 company matters” – and loan contracts with several joint-stock commercial banks.
DAG, the Dong A Plastic Joint Stock Company, is currently in the process of suspended trading. Similar to FID, DAG is mired in a mess of internal issues and is going through one of its most challenging periods in the past two decades. According to the audited financial statements for 2023 (released in July 2024), DAG posted 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 the cost of goods sold. This massive loss wiped out the company’s consistent profitability over the previous 16 years, resulting in a negative retained earnings balance of 588 billion VND at the end of 2023 (compared to a positive balance of 19 billion VND at the beginning of the year). The report received three pages of comments from the auditor, highlighting bad debts – including loan and tax debts – 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 a blessing in disguise for DAG, preventing the stock price from falling further.
| The massive loss in 2023 pushed DAG into its most challenging phase in two decades |
ITA, the Tan Tao Investment and Industry Joint Stock Company, is another notable mention. The company, owned by Dang Thi Hoang Yen (also known as 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 recent times has not been disappointing. After a record loss of 260 billion VND in 2022, the company bounced back with a net profit of over 202 billion VND in 2023. In the first half of 2024, ITA continued to be profitable, with a net income of nearly 64 billion VND, a 66% increase compared to the same period last year, mainly due to the reversal of provisions for doubtful debts and reduced bank interest, along with cost-saving measures implemented 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 Construction Trading Service Company Limited – a claim that Ms. Yen has consistently denied. This court ruling also triggered a series of other lawsuits, which continue to impact the company’s operations, as explained in ITA‘s quarterly financial statements for the second quarter of 2024.
| ITA‘s stock price has been on a downward spiral 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, ITA‘s CEO, claimed that the HOSE and the State Securities Commission of Vietnam (SSC) had acted unusually, creating difficulties for auditing firms and suspending the practice of auditors working on ITA‘s financial statements, ultimately leading to the departure of these firms. Ms. Yen, on the other hand, asserted that ITA was being targeted by malicious forces aiming to take over the company. In the face of potential delisting, ITA issued a statement implying that the SSC and HOSE would be held responsible.
Another noteworthy company is DDG (Indochina Import Export Industrial Investment Joint Stock Company). On the market, DDG‘s 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. As of October 11, its market price was 2,800 VND per share, a 30% decrease compared to the beginning of the year. However, compared to its peak in 2023 – just before a series of 19 consecutive “floor price” sessions, the drop is as high as 93%.
| DDG experienced a series of 19 consecutive “floor price” sessions in 2023, leading to its current “ice tea” price range |
The primary reason for DDG‘s predicament is the challenges it faces in its business operations. In 2023, the company posted a record loss of nearly 206 billion VND (compared to a profit of 44 billion VND in the previous year). In the first six months of 2024, the company’s revenue was just over 120 billion VND, only one-third of the same period last year. While it did make a net profit of approximately 6.6 billion VND (compared to 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 operation difficulties are the main reason for the decline in DDG‘s stock price |
Optimistic investors often say that every rain eventually stops, and that a stock that has fallen will eventually rise again. However, the rain that the shareholders of the aforementioned companies are facing may still have a long way to go.
