UPCoM ignores Ha Bac Fertiliser

After two days of trading, Hanichemco sees extremely little action

On July 26, Hanichemco (ticker DHB) made 272.2 million shares, representing a registered capital of VND2.71 trillion ($119.2 million), officially available for trading at the initial reference unit price of VND6,800.

The reason investors are turning away from the company’s shares is that it has taken massive losses in recent years. Notably, in 2015 alone, the company suffered losses worth VND700 billion ($31.3 million), while the figure in 2016 was VND1.05 trillion ($46.2 million). As of the first quarter of this year, its accumulated losses reached VND1.94 trillion ($85.3 million).

The company started making losses after expanding its production facility, upgrading its capacity to 500,000 from the initial 180,000 tonnes per year, in June 2015.

A subsidiary of state-run Vietnam National Chemical Group (Vinachem), Hanichemco specialises in manufacturing urea nitrogenous fertiliser, which makes up 80 per cent of its revenue.

However, in recent years, the domestic demand for urea fertiliser fell far short of supply, leading to extremely imbalance. Besides, the domestic fertiliser manufacturing sector also needs to compete with imported products, especially cheaper Chinese ones.

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