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Listed auto retailers' shares suffer from low earnings

Update: November, 16/2019 - 08:11
TMT Motors Corporation (HoSE: TMT) and Hoàng Huy Investment Services JSC (HoSE: HHS) both recorded lower profits and even losses after three quarters.– Photo

HÀ NỘI – Low sales and a lack of extraordinary income from asset sales have brought listed automobile firms' stocks down and pushed investors to other targets.

TMT Motors Corporation (HoSE: TMT) and Hoàng Huy Investment Services JSC (HoSE: HHS) both recorded lower profits and even losses after three quarters.

TMT Motors earned only VNĐ92.5 million (US$4,000) of profit in the third quarter, down 99 per cent year-on-year, despite net revenue increasing by 75 per cent annually to VNĐ257 billion.

According to TMT's board of directors, the costs of sales increased as higher material expenses hit the profit margin. In addition, the firm did not sell any of its assets in the past quarter, unlike last year, while expenditure for advertising, sales and management hiked.

After three quarters, the company recorded a loss of VNĐ6.5 billion compared to a nine-month profit of VNĐ8 billion in 2018. Its total revenue fell 6.3 per cent year on year to VNĐ131.7 billion in the nine-month period.

TMT Motors shares ended Friday at VNĐ5,490 each.

Hoàng Huy Investment Services posted a year-on-year loss of 89 per cent in nine-month revenue, which was VNĐ374.8 billion. Its profit dropped a third to VNĐ109 billion in January-September.

Sales of trucks and trailers – the firm’s core division – hit VNĐ109.6 billion in nine months, 29 per cent of its total revenue but the lowest amount in several years.

The company has rotated to investing in real estate with hopes that revenue from selling property would boost its earnings.

Its shares finished this week at VNĐ3,040.

Shares of Hàng Xanh Motors Service JSC (HoSE: HAX) have declined in recent weeks after news it would accept a takeover bid from the South Korean firm The Class Hyosung.

The South Korean company offered to purchase 51 per cent of Hàng Xanh for at least VNĐ45,000 per share. The Vietnamese firm wants VNĐ50,000 per share.

Speculation about the deal boosted Hàng Xanh shares up to VNĐ23,250 per share. But its shares ended Friday at VNĐ17,600 per share.

After nine months, the company earned VNĐ3.63 trillion in total revenue, up 11 per cent year-on-year. But net profit fell 31 per cent to VNĐ44 billion.

Based on earnings and potential business activities, BIDV Securities Co (BSC) has marked auto stocks “neutral” for the last quarter of 2019.

In 2020, BSC expected Vietnamese auto retailers would benefit from the cut of car import tax, which will fall to zero per cent and increase demand for car purchases.

In addition, the car industry is entering the last quarter of the year, also known as the sales season, which will raise auto firms’ earnings and lift shares, according to BSC.

According to the Vietnam Automobile Manufacturers’ Association, total auto sales in October exceeded 27,400 vehicles in October, down 3 per cent year on year.

After 10 months, more than 246,000 vehicles were sold, up 15 per cent from the same time last year. – VNS


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