Dong A Plastics (DAG) suffers record losses and is facing the risk of being forced to delist.

Dong A Plastics (DAG) shares face the risk of mandatory delisting

Once a well-known company in the field of manufacturing plastic products, Dong A Plastics JSC (Code: DAG) is now facing the risk of being forced to delist by the Ho Chi Minh City Stock Exchange (HoSE). The reason is that the company has not resolved the situation of its shares being suspended from trading before.

On August 8, 2024, HoSE changed DAG shares from restricted trading to suspended trading because the company continued to violate information disclosure regulations.

At the same time, DAG shares were also put on warning status from August 15, 2024 because the company was audited and gave an exception opinion on the 2023 audited financial statements. At the same time, the undistributed profit after tax at the end of 2023 on the 2023 audited consolidated financial statements was negative 588 billion VND.

Afterwards, Dong A Plastics gave many reasons to explain such as because the plastics industry encountered many difficulties, changes in accounting personnel caused the company to not fulfill its information disclosure obligations... The company expected to complete and publish the financial statements in October 2024 but has not yet done so.

In addition, DAG has also received consecutive penalties for violating information disclosure regulations. DAG shares have also been affected by these penalties. At the session on October 10, 2024, DAG shares were no longer traded, recorded at a price of VND 1,430/share.

Business is on the decline, equity is almost depleted

Dong A Plastics was formerly known as Dong A Plastics Manufacturing and Trading Company Limited. The Group was established in 2001 with a charter capital of VND 2.5 billion. In 2006, the company converted to a joint stock company with a charter capital of VND 58 billion. DAG shares were also listed on the HoSE since 2010.

Dong A Plastic's business activities have begun to decline in the past 2 years. In 2023, the company recorded a sharp drop in revenue to 1,215.5 billion VND, equivalent to more than half of the same period.

The negative gross profit of VND371.9 billion shows that the company is in a state of increasing losses as it operates. In addition, the company still has to bear operating costs, causing the loss to swell to VND606.8 billion. This is the first and also the largest loss since the unit began operating.

In Q1/2024, DAG continued to record a sharp decrease in revenue to only 30.3 billion VND. The loss situation continued with a loss of 15.1 billion VND. In Q2/2024, revenue was recorded at 55.3 billion VND, the loss increased to 66.6 billion VND.

The consecutive losses have almost eroded Dong A Plastic's equity. At the end of the second quarter of 2024, the company's total capital was VND 1,394.8 billion, of which equity was only VND 27.3 billion. Liabilities accounted for VND 1,367.6 billion, equivalent to 98% of total capital.