Vietnam chemical group DGC lowers net profit goal

Duc Giang Chemicals Group, a leading industry player in Vietnam, has set a 2024 net profit target of VND3.1 trillion ($121.92 million), down 4.6% year-on-year.

Listed on the Ho Chi Minh Stock Exchange as DGC, the firm targets VND10.2 trillion ($401.22 million) in consolidated revenues this year, up from 2023 revenues of VND9.74 trillion ($383.36 million).

In the first quarter of 2024, the company posted net profits of VND704 billion ($27.69 million) on revenues of VND2.38 trillion ($93.8 million), down 4% and 14% year-on-year. This was its lowest quarterly profit in 10 quarters (since Q4/2021).

Recently, the State Audit Office of Vietnam asked the Commission for the Management of State Capital at Enterprises to check divestment of capital from DGC by state-owned chemical group Vinachem.

Vinachem started divesting its capital from DGC in November 2021.

Between November 8 and December 7, 2021, the group sold 9.1 million DGC shares at VND152,100 ($5.98) apiece, earning nearly VND1.38 trillion ($54.47 million).

After an unsuccessful attempt to sell shares between January 13 and February 11, the group finally sold its remaining six million DGC shares in early March 2022 at VND187,000 ($7.35) apiece, earning close to VND1.13 trillion ($44.4 million).

In total, Vinachem netted over VND2.5 trillion ($98.32 million) from the divestment.

Notably, Vinachem’s capital divestment from DGC took place amid a significant rally in DGC’s stock price, which went up14.5 times between 2020 and 2022.

Currently, DGC is helmed by chairman cum general director Dao Huu Huyen, who acquired a significant DGC stake during the capital divestment period. As of end-2023, he and his affiliates held a 40.75% stake in DGC.