Buying Back Shares to ‘Protect Shareholder Interests’
Speaking at the annual meeting on March 18, Mr. Le Phuoc Vu announced that the company plans to buy back up to 30% of its shares, equivalent to 186 million shares, using surplus capital and undistributed profits.
Emphasizing the purpose of the share repurchase, Mr. Vu stated that it is a precautionary measure against stock market fluctuations. If the company doesn’t take proactive action, shareholders’ psychology could be affected by a sharp decline in stock prices.
“We have ample funds and are utilizing capital with very low-interest rates, so we can buy immediately at the price of 18,000 VND. However, for now, we seek shareholders’ approval for this strategy, and when needed, we will release the funds to purchase. The amount and timing of the buyback will be decided by the Board of Directors based on market monitoring,” said Mr. Vu.
With the current market price (18,500 VND/share), Hoa Sen Group could spend approximately 3,400 billion VND on this plan.
According to Hoa Sen’s Chairman, HSG shares are currently at a “very low” level, fluctuating around 18,000 VND, which is equivalent to its book value. He expressed disappointment that the share price is only at book value despite the company’s decades of operation. Previously, he had considered 30,000 VND a reasonable price for HSG, but this time he believed the adjustment was justified as investors reacted swiftly to market trends.
At present, the steel industry faces challenges due to trade protectionism in the US, Europe, and other major markets. Exports have declined, while the domestic market also witnessed low consumption and increasing competition.
“The steel industry can, at best, remain stagnant, but the overall trend is downward,” Mr. Vu remarked.
Developing a 600-700 Ha Township
HSG is not just limiting itself to the steel industry but is also expanding into real estate. According to Mr. Vu, last year, shareholders approved a plan to invest 5,000 billion VND, but only a few hundred billion has been disbursed so far.
He highlighted the strategic location of the Long Thanh airport, which is close to deep-water ports like Cai Mep and Can Gio, as well as a network of highways connecting the region. With strong financial capabilities, good credit access, and expertise in providing construction materials, Hoa Sen Group has decided to venture into real estate development.
“HSG should develop a township of 600-700 hectares instead of a small-scale project. Long Thanh is a crucial transportation hub, where major arterial roads converge. The largest townships will be centered here. I am currently working on it, but I cannot disclose the details yet,” shared Mr. Vu.
He also affirmed that HSG would not follow the path of some real estate groups that collect money from customers before completing the legal framework and then delay the handover of houses. Instead, with abundant resources and strengths in the construction materials industry, the group will implement projects in a systematic and sustainable manner.
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