Will DIC Corp's big ambition be realized?

According to the recently issued annual General Meeting of Shareholders documents for 2024, Investment Development and Construction JSC - DIC Corp (HOSE: DIG) plans to generate a consolidated net revenue of 2,300 billion VND, a 72% increase over 2023. The pre-tax profit is 1,010 billion VND, up about 509% from the profit earned in 2023.

This is not the first time this company has announced a "trillion ambition" for business. In 2023, DIC Corp plans to generate total revenue of up to 4,000 billion VND and a pre-tax profit of 1,400 billion VND. However, by the end of 2023, the firm had only fulfilled 33.4% of its revenue plan and approximately 12% of the annual profit goal.

The firm also intends to invest almost 7,212 billion VND in development this year, including 6,401 billion VND in projects and 811 billion VND in financial investments.

For the investment in projects, DIC Corp allocated nearly 1,314 billion VND to invest in Nam Vinh Yen New Urban Area; more than 1,079 billion VND invested in Long Tan Tourism Urban Area (Dong Nai); more than 1,000 billion VND invested in Lam Ha Center Point Housing Project (Ha Nam); nearly 831 billion VND invested in Vi Thanh Commercial Residential Area (Hau Giang); more than 933 billion VND into Bac Vung Tau New Urban Area project; 514 billion VND invested in Chí Linh Central Area; nearly 432 billion VND invested in Cap Saint Jacques complex...

With a high demand for investment funds, DIC Corp intends to provide shareholders with multiple options for fundraising in 2024. Specifically, DIC Corp intends to borrow another 220 billion VND from banks. Loans totaling 160 billion VND will be used to fund stages 2 and 3 of the Cap Saint Jacques Complex project in Vung Tau, as well as 60 billion VND to invest in the DIC Star Vi Thanh hotel and convention center in Hau Giang's Vi Thanh Commercial Residential Area.

In addition, the firm intends to raise 3,000 billion VND by issuing shares to current owners. According to the proposal, DIC Corp would distribute an extra 200 million shares to current shareholders at a price of 15,000 VND per share.

DIC Corp also intends to issue a maximum of 150 million shares privately to professional securities investors at a price not less than 20,000 VND per share. If successful, the company would additionally get 3,000 billion VND.

The company also intends to issue an additional 30 million ESOP shares, with a ratio of 4.919% of total floating shares. The projected issue price is 15,000 VND per share, which is approximately 50% lower than the current market price. The issuance is scheduled for 2024.

Furthermore, DIC Corp intends to pay a 2.5% dividend in shares to shareholders in 2023, as well as a 2.5% dividend in reward shares, for a total of 5%, generated from the owner's equity capital and scheduled to be carried out in 2024.

According to DIC Corp, the order of issuance will be as follows: issuing shares to current shareholders; paying dividends for 2023 and awarding shares; issuing ESOP shares; and lastly, offering shares privately. If all four issuances are completed, the firm will issue 410.49 million shares, bringing the company's charter capital up from over 6,098 billion VND to more than 10,203 billion VND.

In terms of business performance, DIC Corp's revenue in 2023 was almost 1,028 billion VND, down 46% from the previous year. The real estate business section had the highest contribution to the company's revenue, accounting for more than 545 billion VND (53% of the revenue structure). The pre-tax profit for the entire year of 2023 was just almost 166 billion VND, or around 12% of the annual target.

Regarding the financial status, DIC Corp's total debt as of the end of 2023 was 8,935 billion VND. Financial debt reduced to 3,112 billion VND, down 733 billion VND from the start of the year. This decline was mostly due to the number of bonds that the firm settled in 2023, with bond debt falling from 1,862 billion VND at the start of the year to 1,142 billion VND.

On the market, DIG ended on March 29 at 32,200 VND/share, up approximately 24% from the start of the year. In March, DIG share increased by more than 19% over the course of 15 sessions. The liquidity of this share was also quite strong, with tens of millions of shares exchanged per session. Notably, during the trading session on March 18, liquidity increased to about 79 million shares traded, with a transaction value of nearly 2,000 billion VND.

Since October 2023, DIG has increased by around 69.5%. However, this stock is currently 67% lower than its high price in early 2022.

DIG was a "hot" stock on the Vietnamese stock market from the end of 2021 to the beginning of 2022. The number of shareholders of DIC Corp surged fourfold in only one year, along with a large gain in share price.

However, after half a year, the number of shareholders withdrew, as did interest in the company's leaders' strategic plans, resulting in the extraordinary general meeting of shareholders scheduled for September 2022 being canceled due to a lack of sufficient shareholder attendance as required, while the hall was insufficient for shareholders to attend the annual  general meeting of shareholders in 2022 just a few months prior. Along with it, the price of this stock sank to near par value, "evaporating" over 90% from its peak price.