Auditor status was suspended, what’s next for QCG stock?

On November 19, during the morning trading session, QCG shares fell to the floor price with no purchasers and a sell-off volume of more than one million shares. This followed a document that the SSC sent to several businesses, including QCG and SC5, asking for clarity on their audited financial accounts for 2023.

DFK Vietnam Audit Company Limited's auditors failed to complete enough audit processes or gather enough relevant audit data to offer opinions that complied with auditing requirements, according to a 2024 audit quality inspection. As a result, the SSC has suspended the auditors who were in charge of approving QCG and SC5's 2023 financial accounts.

QCG's financial statements have been audited by DFK Vietnam since 2020, with the exception of the 2022 statements, which were examined by UHY Audit and Advisory. Similarly, with the exception of 2022, when AASCS handled them, DFK Vietnam audited SC5's financial statements for 2021, 2022, and 2023.

For its 2024 financial statements, QCG's Board of Directors confirmed in writing that it will choose an auditing firm that satisfies the requirements for auditing public interest entities. The business promised to notify shareholders as soon as possible of its decision.

QCG is not alone; other stocks, including those in the FLC Group such as AMD, FLC, and ITA, have faced auditor suspensions from signing financial statements for listed companies in the past year.

Experts warn that if QCG fails to provide a clear explanation, it may face the same fate as other stocks that have been suspended from trading or placed under scrutiny.

In terms of business performance, QCG’s financial report for the first nine months of 2024 recorded a revenue of VND 243.5 billion, down over 12% compared to the same period last year. However, the company achieved a pre-tax profit of VND 11.5 billion, a significant improvement from a loss of more than VND 5 billion in the same period of 2023.

As of September 30, QCG only had VND 53 billion in cash, which was not enough to pay Truong My Lan the judgment amount that the court determined was due. The company has VND 9,337 billion in total assets, of which VND 6,993 billion was made up of inventories from projects such as Bac Phuoc Kien Residential Area, Lavida, Quoc Cuong Gia Lai II Apartment-Lot A, and Decapella.

In order to produce more than VND 1,000 billion, QCG intends to concentrate on liquidating inventory from these projects in late 2024 and early 2025. When combined with the Marina Da Nang project's earnings, these monies could aid with partner payments. In order to get operational money, QCG is thinking about selling its shares in a few subsidiaries if inventory liquidation or divestiture proves difficult.

By the close of the morning trading session on November 19, QCG shares were priced at VND 12,400 per share, marking a nearly 30% increase since the beginning of the year but a 6.77% drop from the previous session’s ceiling price.