During the annual general meeting on the afternoon of 26/6, the leadership of Hoa Binh Construction Group (HBC) dedicated most of its time to discussing plans to revitalize the business.

In addition to a plan to issue shares for debt-to-equity swaps, HBC's leadership announced the establishment of a new legal entity: Hoa Binh Investment Holdings (HBIH). This company will serve as a capital platform and support ecosystem, helping HBC overcome current financial hurdles and achieve more sustainable development.

According to Nguyen Kinh Luan, deputy general director of international investment and market development, the group currently faces challenges in expanding its direct credit limits due to its financial situation after a period of volatility. Establishing a financial subsidiary will enable HBC to attract domestic and international investors, thereby increasing market confidence, improving operating cash flow, and reducing debt pressure.

Under the proposed plan, some major shareholders of Hoa Binh Construction will contribute capital to HBIH using HBC shares they currently hold. This is expected to be about 20-30% of the total outstanding HBC shares. After receiving these capital contributions, HBIH will become a strategic shareholder, directly holding and managing capital in Hoa Binh Construction.

Le Viet Hai, chairman of the Board of Directors of Hoa Binh Construction Group, speaks at the annual general meeting on the afternoon of 26/6. *Photo: HBC*

During the dialogue session, some shareholders questioned the division of financial obligations between the parent company and Hoa Binh Investment Holdings. Chairman of the Board of Directors Le Viet Hai repeatedly emphasized that HBC's current assets and debt obligations would not be transferred to HBIH. This means HBC will focus on general contracting and construction, while HBIH will specialize in finance, fundraising, and capital arrangement.

HBC's leadership also stated that the new restructuring plan would not diminish the rights of existing shareholders. "We will not shirk our responsibilities and obligations," said Nguyen Kinh Luan.

Hoa Binh Construction shares have traded below par value since 9/2023. About one year later, HBC was delisted from HoSE and moved to the UPCoM market. This occurred because the company's total accumulated losses exceeded its paid-up charter capital, based on its audited financial report for 2023. Each HBC share closed today's session at 5,000 VND. The stock is currently valued below its book value, with a price-to-book ratio of only 0.85 times.

At the meeting, shareholders also questioned the group's leadership about the share price. Le Viet Hieu, vice chairman of the Board of Directors, stated that they could not dictate the price at which HBC could improve. However, the executive board will find solutions to enhance the company's intrinsic value, improve revenue, reduce costs, restructure finances, and improve cash flow quality. This will lead to an improvement in HBC's share price.

In 2025, Hoa Binh Construction recorded revenue of approximately 4,620 billion VND, a 28% decrease year-on-year. After-tax profit reached nearly 251 billion VND, a 74% decrease. Compared to its plan, the company completed just over half of its revenue target and about 70% of its profit target.

This year, they aim to achieve 10,000 billion VND in revenue, more than double the previous year, while after-tax profit is expected to remain at 250 billion VND. If this plan is met, it will be the first year since 2022 that the company returns to a five-digit revenue milestone.

Tat Dat