The High Stakes of Stock Market Investing: When Businesses Gamble and Lose

For several consecutive quarters, Vinh Hoan Corporation (code: VHC) had to bear losses from its investment in DXS shares of Dat Xanh Real Estate Service Joint Stock Company.

By the end of Q3 2024, VHC’s investment in securities business amounted to nearly VND 162 billion, an 11.6% decrease compared to the beginning of the year, with a temporary loss of nearly VND 37 billion. Notably, the company had to set aside a provision of VND 32 billion, equivalent to 54% of the original cost, specifically for DXS shares.

As of September 30, 2024, Da Nang Development Investment Joint Stock Company (code: NDN) invested more than 38% of its total assets, equivalent to VND 491 billion, in securities.

The largest investments were in Vinhomes Joint Stock Company (code: VHM) with over VND 160 billion and Hoa Phat Group Joint Stock Company (code: HPG) with nearly VND 104 billion. Notably, Da Nang had to set aside a provision of more than VND 38 billion, or nearly 8%.

Another real estate company, Tu Liem Urban Development Joint Stock Company (code: NTL), also allocated more than VND 150 billion for securities investment as of September 30.

Overall, NTL’s stock portfolio was temporarily up 10%. The largest holding in the portfolio was TCH, with an original cost of nearly VND 133 billion and a 10% increase.

However, NTL had to set aside a provision for a more than 38% decrease in the investment value of QCG shares of Quoc Cuong Gia Lai Joint Stock Company. Nevertheless, the holding was relatively small, at only about VND 300 million, so the loss did not significantly affect the portfolio’s value.

Tien Len Steel Group Joint Stock Company (code: TLH) was once a significant player in the stock market during the hot period of 2020-2021.

Recently, the company has significantly reduced its investment ratio. By the end of Q3 2024, TLH invested over VND 31 billion in various stocks, all of which were losing money, requiring a provision of VND 3.6 billion.

The two main investments were in the shares of Duc Giang Chemical Group Joint Stock Company (code: DGC) and VNDirect Securities Corporation (code: VND).

Even securities companies could not escape bearing losses from stocks. A typical example is VNDirect Securities Joint Stock Company (code: VND), which held stocks worth over VND 3,300 billion at the end of Q3 2024. The largest holdings included VPB, with an original cost of over VND 448 billion and a 2% loss; HSG, with an investment of VND 379 billion and a temporary profit of 16%; C4G, with VND 285 billion and a temporary loss of 11%; and LTG, with VND 115 billion and a temporary loss of 55%.

Similarly, Saigon-Hanoi Securities Joint Stock Company (code: SHS) held listed stocks in its FVTPL financial assets portfolio worth over VND 3,500 billion as of September 30, 2024, an increase of VND 560 billion in scale compared to the beginning of the year, with a temporary profit of 5%.

The four codes with the largest holdings were VPB, with an original cost of nearly VND 350 billion (a temporary loss of 11%); FRT (VND 201 billion, a temporary profit of 111%); MWG (VND 141 billion, a temporary profit of 28%); and FPT (VND 78 billion, a temporary profit of 72%).

SHS’s AFS financial assets had an original cost of VND 475 billion, the same as at the beginning of the year. The company held more than VND 275 billion in SHB (a temporary profit of 114%) and TCD (original cost of VND 200 billion, a temporary loss of 65%).