Stocks that sailed deeply into the red in 2019

By Minh Son   January 5, 2020 | 11:34 pm PT
Stocks that sailed deeply into the red in 2019
An investor looks at the stock board at a securities company in Hanoi. Photo by Reuters/Kham.
Vietnam’s stock exchanges recorded 31 stocks losing more than half of their value through the course of 2019.

On the Ho Chi Minh City Exchange (HoSE), home to large-caps, and the Hanoi Stock Exchange, where most mid- and small-cap stocks are listed, 357 tickers had fallen in price between the beginning and end of 2019, according to data from research firm FiinGroup.

Five of the biggest losing stocks on both exchanges had lost over 75 percent of their value over the year, with the biggest fall coming from TKC of real estate developer Tan Ky Construction Real Estate Trading Corporation, which closed at VND3,400 ($0.15) by December-end, down 89 percent from VND30,000 ($1.30).

The stock fell following disclosures of negative business results. In the first 9 months, TKC reported over VND468 billion ($20.27 million) in revenue, half of what it achieved over the same period in 2018, and made an after-tax loss of VND1.6 billion ($69,300), down from VND11 billion ($476,400) in the first 9 months of 2018.

It was followed by FTM of fabric producer Duc Quan Investment and Development JSC, which had a positive first half of 2019, rising from VND15,000 ($0.65) to around VND25,000 ($1.08) by August. However, after it published 6-month accounts showing losses, HoSE put FTM shares on the list of stocks  not allowed for margin trading.

As a result of the restriction, FTM shares hit their floor price for 25 consecutive sessions, with a large amount of selling pressure from securities companies trying to offload the stock. Liquidity plunged from around one million to only a few thousands and, in some sessions, a few hundred shares.

FTM closed at VND2,000 ($0.09) by year-end, down 88 percent from the first session in January.

YEG of digital multimedia giant Yeah1 is the biggest market cap stock to make this list. It had started the year off with a price of VND235,000 ($10.18), one of the most expensive stocks on HoSE with a market cap of over VND7.35 trillion ($318.39 million), but fell to only VND37,000 ($1.60) at the end of the year, down 84 percent.

YEG began plummeting after YouTube, its biggest partner, terminated its contract last March, citing violation of YouTube’s policies by a Thailand-based firm in which Yeah1 owned a 17 percent stake. Yeah1 tried to salvage this contract, but had to announce a month later that the negotiations had failed, prompting investors to sell off their YEG shares.

The other two biggest losers were TTB of mineral firm Tien Bo Group and SJF and agriculture corporation Sunstar investment, which dropped 81 percent and 75 percent, respectively.

Blue chips

Losses were smaller on the VN30 index, the basket of Vietnam’s 30 biggest market cap companies, led by CTD of construction giant Coteccons. The stock fell 67 percent in 2019, closing at VND51,300 ($2.22).

According to CTD’s financial reports, the company was greatly affected by the slowdown in the real estate market, rising prices of construction materials, as well as new competition by a company incorporated by some of Coteccon’s former executives.

In the first nine months, CTD's revenue and pre-tax profits decreased by 22 percent and 60 percent respectively over the same period in 2018, having reported 5 straight quarters of declining profits.

It was followed by SSI shares of Saigon Securities Inc., which fell 29 percent. Most leading securities companies this year on the HoSE saw their shares lose because of rising competition from a number of South Korean securities companies entering Vietnam this year.

MSN of food giant Masan Group, which fell from VND77,500 ($3.36) to VND56,500 ($2.45), or 27 percent, only began plunging towards the end of the year after it signed a merger deal with minimart and supermarket chain Vinmart of Vingroup, Vietnam’s biggest private conglomerate.

Although the deal to bring Vinmart under the control of Masan was expected to be mutually beneficial in the long term, securities companies have said the deal could be financially burdensome to Masan.

Vingroup’s retail segment, of which Vinmart accounted for over half, lost VND5.1 trillion ($220.89 million) in 2018, stoking concerns that Masan’s business results in the near future will be affected, prompting investors to begin selling. And while foreign investors were generally net sellers of the stock throughout 2019, their net sell skyrocketed following the merger news.

The remaining two names in the VN30 group that lost significantly over the course of 2019 are BVH of insurance giant Bao Viet and SAB of Vietnam’s biggest brewer Sabeco, falling 22 percent and 14 percent respectively.

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