Tran Anh will delist from HNX due to Mobile World's neglect

July 07, 2018 | 18:00

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More than one year after merging with Mobile World and being neglected to focus on the Bach Hoa Xanh grocery chain, Tran Anh Digital World JSC (code: TAG) has just announced the management board’s resolution to cancel its listing by buying back 180,634 TAG stocks.

tran anh will delist from hnx due to mobile worlds neglect

Tran Anh will buy back its stocks to delist on HNX

Tran Anh will buy 180,634 TAG stocks, equaling 0.73 per cent of its total offered shares on the Hanoi Stock Exchange (HNX) before delisting. Currently, Tran Anh holds 102,614 TAG stocks since its latest transaction on December 3, 2015, while its parent company Mobile World, as of April 18, owns 24.63 million shares, equaling 99.27 per cent of the chartered capital.

With the expected price of VND34,900 ($1.53) per stock, Tran Anh may spend VND6.3 billion ($277,533) buying back the stocks.

The transaction will be performed under the form of auction or contract within less than 30 days of receiving approval from the State Securities Commission (SSC).

Over one year after merging with Mobile World, Tran Anh’s business has shown unsatisfying, which can bee seen in the stock being put on alert on June 25 because of the corporation’s negative after-tax profit and the undistributed after-tax profit released in its financial report on March 31, 2018. This negative performance undermined interest in the stock, leading to little to no trading since late April.

As in the past two months the TAG stock saw no trading, Tran Anh's move of buying back its stocks before delisting may be aimed at acquiring the stocks at the best price before a foreseen downturn due to poor business results.

At the end of the transaction session on July 5, the TAG stock was priced at VND34,900 ($1.53).

Tran Anh’s financial report stated that in the 2017 fiscal year (April 1, 2017–March 31, 2018), its sales revenue reached VND3.53 trillion ($155.6 million), down nearly 14 per cent against 2016.

In addition, Tran Anh’s expenses to source goods occupied up to 88 per cent of its net revenue, leading to the gross profit of VND416.4 billion ($18.3 million), down more than 19 per cent on-year.

Mobile World’s decision to focus on developing the Bach Hoa Xanh chain is supposed to be the reason behind Tran Anh’s slow business.

At the Analyst Meeting on February 8 this year, Mobile World chairman Nguyen Duc Tai affirmed that the firm will target expanding the grocery chain with the investment of VND1.5-2 trillion ($66-88 million), and has no plans to develop Tran Anh or its pharmaceutical chain Phuc An Khang.