VHC ticker eyes price boom despite bleak business conditions

From March 30 to August 9, the VHC ticker saw a 46.1 per cent jump, surging from $2.25 to nearly $3.30 apiece.

The growth came as the stock market rallied to leverage the low valuations seen after the sell-off period late last year, leading to an expansive rebound in the first half of this year.

The market has pinned high hopes on the government’s support packages pertaining to the interest rate reduction, the 2 per cent drop in VAT, and measures to tackle the slowdown in the real estate market.

The company’s business performance, however, contrasts with its ticker price gains.

In H1, VHC eyed a 34 per cent on-year drop in its revenue, falling to $208.6 million, and a nearly 52 per cent plunge in its post-tax profit, decreasing to $27.6 million.

The company’s net profit margin also slid from 18.1 per cent to 13.26 per cent during the period.

In H1, large inventories at major importers, low economic growth, and weak consumption have led to sinking prices and feeble demand.

VHC’s exports have seen a sharp drop in its three major markets – the US, the EU, and China.

By contrast, its domestic consumption has managed positive growth, particularly in July, which marked a 53 per cent jump in its revenue to approximately $11.4 million.

Despite the returning domestic market, the sharp drop in exports has rocked VHC’s accrued and net profit margins in H1, an effect that will linger into the remainder of the year if the US and EU markets do not witness a rebound.

VHC’s inventories have also spiked. As of June 30, the company’s total stood at $165.7 million, marking a 39.4 per cent jump and accounting for 32.3 per cent of its total asset value.

Seafood businesses expect the market prospects to be more upbeat in the coming months as inventories diminish, prompting importers to begin stockpiling again.

Several market analysts, however, have concerns that retailers in the US and EU might even lower prices during the year-end period to fuel demand – a trend that first appeared in June. This could mean that a recovery in sales might not correlate with improved profits.

Seafood exporters, including those that focus on basa fish like VHC, are expected to encounter challenging times over the rest of 2023.

According to figures from the Vietnam Association of Seafood Exporters and Producers, the nation’s seafood export value came to around $5 billion in the first seven months of this year, a 25 per cent drop on-year.

Of which, tra exports witnessed a 36 per cent value drop, and shrimp exports experienced a 27 per cent plunge on-year.

In July, the seafood export value reached $830 million, a drop of 11 per cent over 2022.

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