Vinh Ha: Bring real estate dream in 7 years

In the coming time, Vinh Ha Food Processing and Construction JSC (UPCoM: VHF) will seek shareholders’ opinions (in writing) through co-investment in 2 projects at 9A Vinh Tuy + 780 Minh Khai (Hai Ba Trung, Hanoi) and lot 10 Km Van Dien (Thanh Tri, Hanoi).

This is the latest attempt to realize the real estate dream that this business has been passive for seven years.

Determined from year to year

Vinh Ha Food Processing and Construction Joint Stock Company, formerly known as Food Transportation and Trading Company (directly under Central Food Corporation No. 1) was established in 1993.

In 2006, Vinh Ha changed to joint stock company with chartered capital of VND43 billion and officially listed on UPCoM 4 years later with two major shareholders namely Northern Food Corporation (51%) and Consulting Company Limited investment and transfer money (40.67%).

Vinh Ha (VHF) is still cherishing the dream of real estate development 

Before going to the floor, Vinh Ha has its main business activities are food supply, agricultural products supply, animal feed and warehouse business. After-tax profit of 2007, 2008, 2009 was only modest at VND 1-3 billion.

After listing, Vinh Ha has been growing in terms of revenue and profit. In the period of 2012 – 2016, the company continuously recorded revenue of VND trillion, while the profit also improved considerably, reaching VND5.2 billion (2011), VND13.5 billion (2012) , VND11.2 billion (in 2013).

However, profitability of Vinh Ha up and down is very erratic. With a profit of VND11.2 billion in FY2013, FY2012 profit fell flat to VND1 billion. In 2015, it will be VND6.5 billion and 201 million dong in 2016. In the first half of 2017, the company had a net loss of VND7.3 billion.

The real estate investment of Vinh Ha just stopped at the “determination”

Vinh Ha’s financial situation is also not very bright as in the first 6 months, inventories increased tenfold (from VND21 billion to VND211 billion); Accounts payable increased 2.47 times (from VND 110 billion to VND 272 billion, of which 96% was short-term debt). Short-term debt also increased 3.8 times in 6 months, to VND219 billion – higher than equity (VND214 billion). In addition, the company is holding bad debt up to 35 billion (this bad debt has increased nearly 3 times compared to 2012).

The data is not so beautiful above is considered the main reason that Vinh Ha is unfinished real estate dream over the past 7 years, although in the resolution of the shareholders of the period 2011 – 2016, the company reminded A message: “Determined to strive to implement the two projects Km10 Van Dien and 9A Vinh Tuy + 780 Minh Khai” (not including project 231 Cau Giay, project at 21 and 100 Sai Dong) adding “determination” in the two seasons 2015 – 2016).

Vinh Ha is expected to build a Vinh Ha – VH1 mixed-use building on a plot of land at Km10 Van Dien (Thanh Tri district, Hanoi) in 2011 with a total investment of VND1,242 billion.

In addition, Vinh Ha also intends to build another building at 9A Vinh Tuy + 780 Minh Khai, Hai Ba Trung, Hanoi (this is the headquarters of the company).

In 2011, Vinh Ha has issued 17.2 million shares to existing shareholders to raise its chartered capital from 43 billion dong to VND215 billion. However, after the issuance, Vinh Ha has no plans to raise capital. Until the end of Q2 / 2017, the equity of Vinh Ha is still only VND214 billion. So far, the Company has not seen any clear move in raising capital or calling for investment cooperation. The project, therefore, is still just the “determination”.

What is Vinh Ha?

In the prospectus posted in 2010, Vinh Ha has listed the land that the company is managing and using. This list includes 28 plots of land ranging from a few hundred to several thousand square meters, distributed both in the north and south.

In Ha Noi, Vinh Ha has land areas: 25 An Duong, Yen Phu, Tay Ho (846 m2), Yen Vien town, Gia Lam (2,654 sqm), 9A Vinh Tuy, Hai Ba Trung (9,040 sqm) Sai Gon town, Sai Dong, Long Bien (2,000 sqm), Duc Giang town, Long Bien (2,134sqm), 780 Minh Khai, Hai Ba Trung (16,168 sqm), Van Dien Townlet (8.325 sqm), Linh Nam Ward, Hoang Mai Ward (2,083 sqm), Yen Vien Townlet, Gia Lam (1,290 sqm), Ta Thanh Oai Village, Bi, Gia Lam (1,071 sqm) …

In the southern provinces, Vinh Ha has plots of land: Lich Hoi Commune, Long Phu District, Soc Trang Province (111,880 sqm), Lien Tu Commune, Long Phu District (15,089 sqm), Lung Hoi Thuong, Long Phu District (25,364sqm ) …

These plots are more or less likely to be converted into real estate projects. Vinh Ha’s Annual General Meeting of Shareholders still leaves the words “emphasizing the implementation of other projects on land plots managed and used by the Company”. However, with the current potential, in addition to two words “determination” on the resolution, Vinh Ha has nothing to realize his dream?

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