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Listed companies unassertive when setting up business targets for 2012
The anticipated macroeconomic difficulties have made listed companies unassertive when discussing business plans for 2012.
60 percent of businesses fail to obtain targeted profits
In 2011, Lu Gia Electrical Engineering Company (LGC) which lists its shares on the Hanoi Stock Exchange, only obtained the profits equal to 70 percent of the targeted plan (30 billion dong in post tax profit).
LGC’s General Director Cao Luong Ngoc said that the newly operational factory has been facing difficulties right from the beginning of the year, when the State cut down public investment and infrastructure projects. This has made the profits from the real estate investment decrease.
The Investment and Trade Corporation (DIC) which lists shares on the Hanoi bourse, also got 18-24 billion dong in profit, just fulfilling 60-70 percent of the business plan.
LGC and DIC are the two out of many enterprises which could not obtain the targeted profits. A report by the State Securities Commission SSC shows that 60 percent of listed companies had the profits in 2011 decreasing in comparison with 2010.
Though the number of unprofitable listed companies only accounted for 12 percent, the stock market still witnessed the dramatic falls of the stock prices. A lot of shares have seen the prices drop by 90 percent. DVD of Vien Dong pharmacy, SBS of Sacombank Securities, VES of Meca Vneco Construction and Electrical Company are the typical examples.
While the banks’ doors are nearly close to businesses as a result of the policy on tightening credit, the falls of the stock market have made it more difficult for businesses to seek capital.
Keeping cautious with investment projects, unassertive with new business plan
In general, businesses keep hesitant when talking about their business plans in 2012. A representative of DIC said that though the company hopes to obtain the turnover increasing by 20 percent in 2012 thanks to the biggest exports of clinker, the company’s targeted profit in 2012 is the same as 2010’s.
Meanwhile, DIC said that it would not too hurriedly consider new investment plans.
Similarly, the shareholders’ meeting of Song Da Cao Cuong (SCL) which lists shares on the Hanoi bourse, has decided to stop the plan to issue 900,000 additional shares which was approved by the 2011 shareholders’ meeting gathered on April 23, 2011.
The share issuance aimed to raise funds, estimated 10 billion dong to invest in two other businesses. However, SCL has decided one of the two projects would be developed with the capital SCL can arrange itself by save costs. Meanwhile, the company would delay the second project.
PTSC, though having satisfactory business result in 2011 with both turnover and profit fulfilling 123 percent and 135 percent of the yearly plan, is still keep cautious when drawing up the plan for 2012. It targets to obtain the total revenue and profits of 25 trillion dong and 950 billion dong, respectively, in 2012. As such, the targeted turnover of the company decreases by 4 percent from 2011, while the targeted profit decreases by 24 percent.
Setting up low revenue and profits is the thing that many listed companies is doing. The thing seems to come in line with the survey by Grant Thornton in the fourth quarter of 2011. The survey shows that the optimism in the national economy decreased from 80 percent in the first quarter to 34 percent in the fourth quarter.
The market capitalization value by the end of 2011 had lost 220 trillion dong, or 10 billion dollars, in comparison with 2010, while the number of listed companies increased by 60.
vietnamnet
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