Vietnam's agri major Hoang Anh Gia Lai set to exit Ho Chi Minh bourse warning list

Shares of Vietnam's agri major Hoang Anh Gia Lai JSC (HAG) will be removed from the Ho Chi Minh Stock Exchange's (HoSE) warning list, effective from August 26, bringing the date for margin eligibility closer.

The bourse said the company has eliminated accumulated losses that triggered the warning status.

Debt troubles and hefty losses following retrospective adjustments to its 2021 financial statements put HAG under control status. On October 11, 2022, the stock was lifted from that category after the company posted a positive after-tax profit attributable to parent shareholders for 2021. However, large accumulated losses kept the company under warning status until now.

HAG reported accumulated profit of VND409 billion ($15.52 million) in its reviewed H1/2025 financial statements, reversing years of losses. The company has gradually pared its accumulated deficit from more than VND6.3 trillion ($239.08 million) at end-2020.

The removal from the warning list paves the way for margin lending eligibility, potentially boosting demand for HAG shares.

The presence of accumulated losses has been among the key reasons deterring major funds from investing in HAG shares. Chairman Doan Nguyen Duc once described the deficit as a “lingering obsession.” He said talks with large funds indicate that once the company clears its accumulated losses, many institutional investors would take positions in HAG.

On the back of the positive developments, HAG shares have rallied strongly, climbing above VND16,000 ($0.61) apiece - a 64% gain in four months - and reaching a 10-year high.

The shares closed at VND16,100 apiece on Friday.

Concerns over cash flow remain

Still, HAG’s reviewed financial statements carried an emphasis-of-matter from its auditor, flagging short-term liabilities exceeding short-term assets by VND2.77 trillion ($105.12 million).

As of June 30, the company was also in breach of certain bond covenants and had yet to settle overdue principal and interest on loans and bonds.

These conditions indicate the existence of material uncertainties that may cast significant doubt on HAG’s ability to continue as a going concern.

The company has mapped out a 12-month cash flow plan based on expected inflows from three key sources: operating cash generated from its core business projects; proceeds from liquidating part of its financial investments and partner loans; and other financing sources, including private placement bond issuance, commercial bank loans under existing credit agreements, and approved payment deferrals under debt restructuring arrangements with lenders.

Total borrowings stood at VND9.32 trillion ($353.7 million) at the end of Q2, up VND2.35 trillion ($89.18 million) from the beginning of this year. While bank borrowings have increased, a notable shift was the steep drop in outstanding bonds coming due, offset by a rise in other long-term borrowings approaching maturity.

Accrued expenses - mainly interest on loans and bonds - dropped sharply to VND2.3 trillion ($87.29 million) from VND4.17 trillion. Meanwhile, the company booked VND2.05 trillion ($77.8 million) in payables from a bond conversion to Huong Viet Investment Consultant Corporation and several individual investors.

HAG said the transactions stemmed from June, when the parties purchased part of a VND2 trillion ($75.9 million) bond (Group B) and VND2.02 trillion ($76.66 million) in accrued interest from state-controlled lender BIDV. As a result, the bond principal was converted into a loan, while the bond interest was reclassified as payables.

HAGL is seeking shareholder approval to convert VND2.52 trillion ($95.64 million) of debt owed to the aforementioned individuals into equity at a swap price of VND12,000 ($0.46) per share.

Chairman Duc also disclosed that under the agreed terms with partners, once the debt-to-equity swap is completed, about VND1.4 trillion ($53.13 million) of other liabilities would automatically be forgiven, potentially boosting profit this year.

If approved and executed, the plan would significantly pare down total liabilities, helping narrow the gap between current assets and short-term obligations - a key concern flagged by the auditor.

As of June 30, HAGL owed VND1.1 trillion ($41.75 million) in bond borrowings to BIDV under Group A bonds, including VND815 billion in long-term debt and VND280 billion in short-term notes.

As of June 30, HAGL owed VND1.1 trillion ($41.75 million) in bond borrowings to BIDV under Group A bonds, including VND815 billion ($30.92 million) in long-term debt and VND280 billion ($10.63 million) in short-term notes.

Profit expected to top VND1 trillion ($37.95 million) for fourth year running

During 2022-2024, HAG posted annual net profits exceeding VND1 trillion ($37.95 million). Executives expect a fourth consecutive year at that level.

Specifically, the company set a revenue target of VND5.51 trillion for 2025, with fruit contributing 76% and pig farming 19%. Net profit was projected at VND1.11 trillion.

Specifically, the company set a revenue target of VND5.51 trillion ($209.11 million) for 2025, with fruit contributing 76% and pig farming 19%. Net profit was projected at VND1.11 trillion ($42.13 million).

In H1, HAGL reported revenue of VND3.72 trillion ($141.18 million), up 33% and equal to 68% of the full-year plan. Net income climbed 75% to VND833 billion ($31.61 million), or 75% of the target, mainly driven by banana sales. Durian sales have yet to begin, while pig farming revenue slumped and posted a gross loss.

Chairman Duc said with the strong H1 performance, HAGL plans to revise its 2025 profit goal to VND1.5 trillion ($56.93 million).

Meanwhile, once required approvals are completed, the company could book more than VND1 trillion in extraordinary income in Q3, lifting full-year earnings to VND2.5 trillion ($94.88 million).