Hoa Sen Holdings divests from steel subsidiary

At VND14,100 a share, the sale Friday afternoon fetched VND250 billion (US$10.76 million).

Hoa Sen Holdings is founded and owned by Le Phuoc Vu, who is also chairman of Hoa Sen Group.

The transaction is not a sign of Vu’s withdrawal from the company, and he remains the largest shareholder with a 17.09 percent stake, a spokesperson said.

Hoa Sen shares have fallen from a peak of VND50,000 last October to a 20-month low of under VND14,000.

At the annual general meeting three months ago, Vu had said the then share price (of around VND37,000) was “low” compared to the company’s growth potential.

Hoa Sen was already the dominant player in the corrugated iron, steel and plastic markets, and so there was little room for further growth, he had said, and called for a change in its focus from manufacturing to distribution to take advantage of its network.

He considered revenues of US$5-10 billion feasible for the distribution network, and thus a share price of above VND100,000.

For the six-month period ending March, Hoa Sen posted VND30 trillion in revenues, up 48 percent year-on-year, but profits fell by over 47 percent to VND873 billion.