Listed auto retailers' shares suffer from low earnings

HÀ NỘI – Low sales and a lack of extraordinary income from asset sales have brought listed automobile firms' stocks down and pushed investors to other targets.

TMT Motors Corporation (HoSE: TMT) and Hoàng Huy Investment Services JSC (HoSE: HHS) both recorded lower profits and even losses after three quarters.

TMT Motors earned only VNĐ 九 二. 五 million (US$ 四,000) of profit in the third quarter, down  九 九 per cent year-on-year, despite net revenue increasing by  七 五 per cent annually to VNĐ 二 五 七 billion.

According to TMT's board of directors, the costs of sales increased as higher material expenses hit the profit margin. In addition, the firm did not sell any of its assets in the past quarter, unlike last year, while expenditure for advertising, sales and management hiked.

After three quarters, the company recorded a loss of VNĐ 六. 五 billion compared to a nine-month profit of VNĐ 八 billion in  二0 一 八. Its total revenue fell  六. 三 per cent year on year to VNĐ 一 三 一. 七 billion in the nine-month period.

TMT Motors shares ended Friday at VNĐ 五, 四 九0 each.

Hoàng Huy Investment Services posted a year-on-year loss of  八 九 per cent in nine-month revenue, which was VNĐ 三 七 四. 八 billion. Its profit dropped a third to VNĐ 一0 九 billion in January-September.

Sales of trucks and trailers – the firm’s core division – hit VNĐ 一0 九. 六 billion in nine months,  二 九 per cent of its total revenue but the lowest amount in several years.

The company has rotated to investing in real estate with hopes that revenue from selling property would boost its earnings.

Its shares finished this week at VNĐ 三,0 四0.

Shares of Hàng Xanh Motors Service JSC (HoSE: HAX) have declined in recent weeks after news it would accept a takeover bid from the South Korean firm The Class Hyosung.

The South Korean company offered to purchase  五 一 per cent of Hàng Xanh for at least VNĐ 四 五,000 per share. The Vietnamese firm wants VNĐ 五0,000 per share.

Speculation about the deal boosted Hàng Xanh shares up to VNĐ 二 三, 二 五0 per share. But its shares ended Friday at VNĐ 一 七, 六00 per share.

After nine months, the company earned VNĐ 三. 六 三 trillion in total revenue, up  一 一 per cent year-on-year. But net profit fell  三 一 per cent to VNĐ 四 四 billion.

Based on earnings and potential business activities, BIDV Securities Co (BSC) has marked auto stocks “neutral” for the last quarter of  二0 一 九.

In  二0 二0, BSC expected Vietnamese auto retailers would benefit from the cut of car import tax, which will fall to zero per cent and increase demand for car purchases.

In addition, the car industry is entering the last quarter of the year, also known as the sales season, which will raise auto firms’ earnings and lift shares, according to BSC.

According to the Vietnam Automobile Manufacturers’ Association, total auto sales in October exceeded  二 七, 四00 vehicles in October, down  三 per cent year on year.

After  一0 months, more than  二 四 六,000 vehicles were sold, up  一 五 per cent from the same time last year. – VNS