In particular, DXG received an administrative fine of VND 515 million, the most severe of which was VND 350 million, for changing the plan of use of money obtained through a public securities offering without permission.

Without the General Meeting of Shareholders' (GMS) consent, DXG utilized more than VND 36.5 billion of the VND 1,220 billion obtained through a public securities offering to pay back loans for Ha An Real Estate Investment and Business JSC on March 4, 2024.

According to laws, the company must not only pay the penalty but also correct the infraction by submitting a change in the purpose or utilization plan of the money raised from the public offering to the closest GMS for approval.

For the first violation of failing to disclose mandatory information, DXG was fined VND 100 million. Specifically, the company failed to disclose the following documents on the SSC’s information disclosure system, Ho Chi Minh Stock Exchange (HoSE) website, and the company’s website:

• The Board of Directors’ resolution dated June 21, 2022, approving contracts, agreements, and transactions with related parties.
• The Board of Directors’ resolution dated June 30, 2023, approving contracts, agreements, and transactions with related parties.
• Audited report on the usage of funds raised from bond issuances for the first half of 2023.

Additionally, the company failed to disclose certain information on time, including court judgments and decisions from the courts between 2022 and 2024, as well as an authorization letter for information disclosure granted to Mr. Nguyen Hoang Duc, Deputy Head of Strategic Finance, dated March 16, 2024. The company also delayed submitting the audited report on the usage of funds raised from bond issuances to the Hanoi Stock Exchange (HNX).

Moreover, DXG was fined VND 65 million for incomplete information disclosures. According to the SSC, its corporate governance reports for the first half of 2022, the full year of 2022, the first half of 2023, the full year of 2023, and the first half of 2024 failed to adhere to the prescribed format outlined in Appendix V of the Circular dated November 16, 2020, issued by the Minister of Finance.

For instance:

• According to Note 29 of the reviewed standalone financial statements for the first half of 2024, the company reported a transaction of VND 30 billion borrowed from Board Member Luong Tri Thin during the period from January 1 to June 30, 2024. However, this transaction was not disclosed in Appendix 2 of the corporate governance report for the first half of 2024.
• A guarantee provided by DXG for a loan of its subsidiary, Ha Thuan Hung Construction-Trading-Service Co., Ltd., as per a resolution dated March 21, 2024, was also omitted.
• As per Note 29 of the audited standalone financial statements for 2023, DXG reported a VND 150 billion loan balance from Luong Tri Thin as of December 31, 2023. However, this transaction was not disclosed in Appendix 2 of the corporate governance report for 2023.
• In its 2023 prospectus for additional public share offerings, Mr. Luong Tri Thin was listed as Chairman of the Board of DXG as well as Chairman of the Board of lHouzz Technology JSC and Tulip Real Estate Financial Services JSC. However, the company failed to disclose lHouzz and Tulip as related parties of Mr. Luong Tri Thin in Appendix 3 of the corporate governance report for 2023.

Business Results

DXG reported net revenue of VND 1,013 billion for the third quarter of 2024, a 17% drop from the same time the previous year. Its net profit dropped 54% to VND 31 billion, while its after-tax profit was VND 73 billion, down 34% from the previous year. Slower product handovers were the company's explanation for the drop in profitability.

DXG's overall income for the first nine months of 2024 was VND 3,204 billion, which represents a 39% increase over the same period the previous year. Due in significant part to a robust rebound in Q1/2024 from a loss of more than VND 100 billion the year before, the after-tax profit increased 63% to VND 244 billion. With these outcomes, the business surpassed its 2024 annual profit target and reached 82% of its revenue target.

KBSV Securities assessed that the real estate market is expected to recover significantly from late 2024, supported by the implementation of revised laws on real estate business, housing, and land, effective from August 1, 2024. These laws aim to address difficulties faced by businesses. Additionally, housing loan interest rates are expected to remain low, stimulating demand for housing loans.

As a result, KBSV expects DXG’s business activities to improve in the near future. Specifically, brokerage operations are forecast to maintain a recovery trend, contributing VND 1,228 billion in 2024 (up 104% year-on-year) and VND 1,372 billion in 2025 (up 12% year-on-year) to revenue. The DXH Riverside project, expected to launch in late 2025, is projected to contribute approximately VND 24 trillion in sales between 2025 and 2028.

According to KBSV, DXG's 2024 and 2025 revenues are expected to be VND 4,744 billion, up 27% year over year, and VND 4,573 billion, down 4% year over year. Due to the completion of projects like Opal Skyline and Gem Sky World, as well as a rebound in brokerage operations from the low base of 2023, the parent company's expected net profit is VND 162 billion in 2024 (down 6% year over year) and VND 330 billion in 2025 (up 103% year over year).

The securities firm did, however, issue a warning that DXG's cash flow would be severely impacted if the market recovers more slowly than anticipated and delays in the start of new projects continue.