Mr. Le Viet Hai wants to establish a new legal entity to restructure Hoa Binh Construction

At the annual meeting on the afternoon of June 26, the board of directors of Hoa Binh Construction Group (HBC) spent most of the time talking about plans to revive the business.

In addition to the plan to issue shares to swap debt, HBC’s board of directors said they will establish a new legal entity – Hoa Binh Investment Holdings (HBIH). This company plays the role of capital platform and support ecosystem, to help HBC overcome current financial barriers and develop more sustainably.

According to Mr. Nguyen Kinh Luan, Deputy General Director of Investment and International Market Development, it is currently difficult for this group to expand credit limits directly due to the financial situation after a period of fluctuations. The establishment of a subsidiary specializing in finance will help HBC attract domestic and foreign investors, thereby increasing market confidence, improving operating cash flow and reducing debt pressure.

According to the proposed plan, some major shareholders of Hoa Binh Construction will contribute capital to HBIH with the HBC shares they hold. This level is expected to be about 20-30% of the total number of current HBC shares. After receiving capital contribution, HBIH will become a strategic shareholder, directly holding and managing capital at Hoa Binh Construction.

During the dialogue, some shareholders asked questions about how to divide 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 liabilities will not be transferred to HBIH. That is, HBC will focus on general contractor and construction, while HBIH specializes in finance, calling and arranging capital sources.

HBC’s management also said that the new restructuring plan does not reduce the rights of existing shareholders. “We will not shirk our responsibilities and obligations,” Mr. Nguyen Kinh Luan said.

Hoa Binh Construction’s shares have been trading below par value since September 2023 until now. About a year later, HBC was delisted on HoSE and transferred to the UPCoM market. The reason is that the enterprise has total accumulated losses exceeding the actual contributed charter capital, based on the audited financial statements for 2023. Each HBC share closed today’s session at 5,000 VND. This code is being valued lower than its book value when the P/B ratio is only 0.85 times.

At the meeting, shareholders also questioned the group’s leaders about the stock price. “What is the recovery prospect of HBC shares on the stock exchange in the future?”, a shareholder asked.

Mr. Le Viet Hieu, Vice Chairman of the Board of Directors, said that they cannot set the price at which HBC can improve. But the board of directors will find solutions to enhance the internal value of the business, improve revenue, reduce costs, restructure finances and improve cash flow quality… From there, HBC stock price will improve.

In 2025, Hoa Binh Construction records revenue of about VND 4,620 billion, down 28% over the same period. Profit after tax reached nearly 251 billion VND, down 74%. Compared to the plan, the company only completed more than half of the revenue target and about 70% of the profit target.

This year, they aim to reach 10,000 billion VND in revenue, more than doubling compared to last year, while profit after tax is expected to remain at 250 billion VND. If the plan is met, this will be the first year since 2022 that the company returns to the 5-digit revenue mark.