Amidst market volatility, a steel stock has been on a remarkable upward trajectory with consecutive ceiling sessions. On the morning of December 9th, VCA of VICASA Steel Joint Stock Company – VNSTEEL soared by nearly 7% to 14,400 VND per share, marking its eighth consecutive ceiling session.
Not only has the share price surged, but liquidity has also been pushed to new heights, with tens to hundreds of thousands of units traded, a stark contrast to the previous lackluster period with many “white” liquidity sessions. This steep climb has pushed VCA up by 69% in just over two weeks, reaching a two-year high (since October 2022).
Headquartered in Bien Hoa City, Dong Nai Province, VCA specializes in steel rolling and billet products. Its business territory covers the southern region, including Ho Chi Minh City, Ba Ria – Vung Tau, Nha Trang, and Can Tho. The largest shareholder of VCA is VNSteel, which holds 65% of the capital and is the largest state-owned enterprise in the steel industry with a charter capital of nearly VND 6,800 billion. In addition, Thep Vicasa also has another major shareholder, Danang Steel Joint Stock Company, holding 7.14% of the capital.
Providing an explanation for the sharp movement in its share price, Thep Vicasa attributed it to the announcement made by its largest shareholder, VNSteel, in late November regarding the approval of the capital transfer plan at VCA. Following this news, the share price has consistently hit the ceiling.
VCA also affirmed that the share price movement is entirely driven by the demands of the stock market and that the company has no control over investors’ decisions. The company’s business operations remain stable and normal, with no unusual fluctuations, and it has not taken any actions that would impact the trading price in the market.
Regarding the capital divestment plan, VNSteel announced its intention to divest all 9.87 million VCA shares, starting from November 2024 and completing the divestment by the first quarter of 2025. The divestment of Thep Vicasa can be carried out through two methods. The first is to transfer shares through matching transactions on the HoSE floor. The second method is to transfer shares through off-floor transactions of HoSE (public offering of shares by public companies through public auctions) including normal public auctions and public auctions by lot.
VNSteel stated that after studying the company’s business situation and evaluating the advantages and disadvantages of the above methods, the transfer of capital through a public auction by lot has more outstanding advantages compared to the other methods. Therefore, the General Director agreed to choose the method of off-floor transaction of HoSE, which is a public offering of shares through a public auction by lot. The starting price for the auction is VND 238 billion per lot of shares, equivalent to a post-audit real value of VND 24,158 per share by Vietnam Audit and Valuation Company.
Despite the high valuation, VCA’s business performance has not shown significant improvement. In the first nine months of 2024, Thep Vicasa recorded a net revenue of VND 1,013 billion, a 19% decrease compared to the same period last year. After deducting expenses, the company incurred a net loss of VND 1.5 billion, while in the same period last year, it made a profit of VND 3.5 billion.
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However, the business landscape remained bleak as this enterprise reported losses in the third quarter of 2024.
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If the divestment plans are realized, VNSteel expects to receive a total of VND 365 billion.
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