After the Government created many mechanisms to attract investment in the field of renewable energy, Tasco Joint Stock Company wants to participate in this field, in the context of business activities in the period 2017 - 2019 plummeting and from the second quarter of / 2020 to the first quarter of 2021 continuously suffered losses.
Tasco will raise capital through a private placement
Tasco's 2021 General Meeting of Shareholders (stock code HUT) approved the development strategy for the period 2021-2023 with 5 spearheads: real estate, technology, renewable energy, transport infrastructure investment and Building contractor.
In particular, Tasco's Board of Directors said that the company has experience in the field of renewable energy due to its success in investing in the Thuan Nam 19 Solar Power Plant project, whose subsidiary is Tasco Joint Stock Company. Energy is the investor, with a scale of 49 MW, total investment of 1.356 billion VND, completed and commercial electricity generation in June 6.
Currently, the enterprise is planning to research and implement investment procedures for 2 wind power projects and 1 solar power project in the Central and Central Highlands regions, each project's capacity is 100 MW.
The specific characteristic of investing in the field of renewable energy is that the project implementation phase requires large capital and a long payback period. Meanwhile, as of March 31, 3, Tasco only owned 2021 billion VND in cash and short-term financial investments, accounting for nearly 400,7% of total assets. Total short-term and long-term loans amounted to 4 billion VND, accounting for 5.453,8% of the total capital of the enterprise.
Tasco's General Meeting of Shareholders held on June 19 approved a plan to issue 6 million individual shares to mobilize 80 billion VND, the entire amount raised will supplement capital for the Company.
The profit generated is not enough to pay interest
Since 2017 until now, Tasco has had a backward business situation when revenue and profits tend to decrease. On average in the past 4 years, revenue decreased by 26,1%/year and in 2020, the Company lost 243,4 billion VND.
Entering the first quarter of 2021, Tasco lost an additional 24,5 billion VND (the same period in 2020 profit was 5,4 billion VND), causing the accumulated undistributed after-tax profit to March 31, 3 to decrease from 2021 billion VND. VND to 80,6 billion VND.
The company's declining business results partly came from real estate investment activities with declining profits, while the remaining segments did not grow, and even the fee collection segment encountered difficulties.
Considering the profit structure for the period 2019 - 2020, the real estate sector in 2019 lost 10 billion VND, in 2020 it lost 54,9 billion VND; The field of non-stop automatic toll collection services in the form of BOO in 2019 lost 126,2 billion VND, in 2020 it lost 300,2 billion VND; The field of road toll collection services in the form of BOT in 2019 profited 113,1 billion VND, in 2020 profit was 103,6 billion VND; Construction and other activities in 2019 profited 67,7 billion VND, in 2020 profit was 8,1 billion VND.
Thus, the real estate sector and automatic toll collection services do not stop in the form of BOO, showing that this business activity with large investment capital does not make a profit; The road toll collection service sector in the form of BOT is profitable but cannot compensate for other sectors, leading to large losses in 2020 and continued losses in the first quarter of 2021.
Tasco's short-term and long-term debt as of the end of the first quarter of 2021 is VND 5.453,8 billion, accounting for nearly 186% of equity; Interest expenses in the first quarter of the year amounted to 83,6 billion VND, nearly equal to gross profit.
In particular, the cause of Tasco's losses is also due to the investment capital of large toll projects and the business using a high debt ratio to finance the projects. Specifically, from January 1, 1 to March 2016, 31, the business increased short-term and long-term debt by VND 3 billion to VND 2021 billion, nearly equal to 1.744,7% of equity. Debt accounts for a large proportion of capital, leading to interest expenses eroding most of the profit in the period 5.453,8 - 186. By 2016 and the first quarter of 2019, the profit generated is not enough to pay interest.
Looking at some businesses in the same industry investing in BOT projects such as Infrastructure Development Joint Stock Company (IJC), this company built 2 BOT stations on Highway 13 in Thuan An town, City. . Thu Dau Mot, Binh Duong province has used relatively low debt.
As of March 31, 3, IJC used a total of short-term and long-term debt of VND 2021 billion, equal to 1.284,4% of equity. The enterprise simultaneously develops BOT projects and real estate activities, growing business results and paying regular dividends to shareholders.
Returning to Tasco, the operating situation currently shows no signs of improvement as the Company sets a business plan for 2021 with a negative profit after tax target of VND 100 billion.
According to Tasco leaders, in 2021, in addition to large operating costs and depreciation costs like previous years, large loan interest costs will have to be accounted for in production and business costs because the project has completed the project phase. invest.
Meanwhile, the project's revenue depends on the progress of signing service contracts with BOT investors. The company expects that the project will continue to incur large losses in 2021 - 2022, mainly due to the impact of the VETC non-stop toll collection project.
Regarding the real estate sector, the Company is preparing land allocation procedures to plan for investment, construction and sales in 2022, so this sector will contribute insignificantly to business results. 2021.
In addition, the Covid-19 epidemic has unpredictable developments, affecting people's traffic activities in many areas.
It is known that Tasco is the investor of many BT, BOT, BOO projects and investments in transportation infrastructure such as National Highway 10 (Hai Phong), the route from Le Duc Tho to Road 70 in Nam Tu district. Liem (Hanoi), Construction project to renovate and upgrade National Highway 1 (Quang Binh), investment project to build a new road section Phu Ly - My Loc (Nam Dinh)...
Notably, the enterprise has implemented a strategy of investing in non-stop toll collection projects in the form of BOO contracts for many years, but it was ineffective.
Tasco currently has a charter capital of more than VND 2.686,3 billion, equivalent to more than 268,6 million shares. Despite operating at a loss, HUT's stock price is now double that of the beginning of the year, fluctuating around VND 2/share in the past 8.500 weeks.
According to Securities Quick News