Coal stocks (TDN) enjoy sharp rise but expert say fluctuations remain
Coal stocks (TDN) enjoy sharp rise but expert say fluctuations remain
Coal stocks, dubbed "black gold" stocks, have been attracting the attention of investors for four consecutive months with continuous rises, but some analysts said this growth is just a consequence of the world coal price rising, not internal factors.
The injection of cash flow in the coal stock group has helped many coal stocks exceed their par value within a short time.
Vinacomin - Vang Danh Coal JSC (TVD) recorded an increase of 151.4 per cent from the price of VND7,000 (US$0.31) per share at the beginning of June to more than VND18,000 per share at present.
TVD's liquidity also improved, averaging more than 750,000 units per session, while previously it was below 300,000 units per session.
Vinacomin - DeoNai Coal JSC (TDN) has also increased from the price of more than VND7,000 per share in June to VND18,000 per share at present. Previously, at the trading session on September 16, TDN even reached VND19,900 per share, equivalent to an increase of 176.4 per cent in just three months.
Vinacomin - Mong Duong Coal JSC (MDC) have soared by nearly 143 per cent since the beginning of June. Vinacomin – Nui Beo Coal JSC (NBC), Vinacomin - Ha Lam Coal JSC (HLC) and Vinacomin - Vietbac Mining Industry Holding Corporation (MVB) also witnessed an average increase of about 100 per cent.
Experts attributed the sudden rise of coal stock prices mainly to the fluctuations in coal prices on international commodity exchanges. Accordingly, from June, the world coal price began to increase rapidly from $90 per tonne to approximately $180 per tonne, doubling after just over three months.
In the same direction as the international coal price, the domestic coal price has also increased to an average of more than VND2 million per tonne, equivalent to an increase of about 20 per cent compared to the end of the second quarter. This rising trend is expected to continue as China and India step up orders to meet the increased electricity demand from industrial plants.
The Indonesian Ministry of Natural Resources and Minerals has announced a list of 34 coal mining and trading enterprises temporarily banned from exporting for violating regulations on coal sales in the domestic market. This can create conditions for Vietnamese enterprises to grow both in terms of consumption output as well as export profits.
The sharp increase in coal prices also helps investors' confidence in earning results of businesses, thus supporting the growth of stock prices.
However, there are opinions that the sharp increase in coal prices in recent years may not be able to help businesses in the industry due to the decline in domestic demand for coal. Coal businesses although have trillions of Vietnamese dong in revenue but net profit is quite modest.
Vinacomin – Coc Sau Coal JSC (TC6) in the first 6 months of this year recorded net revenue of VND1.27 trillion, but profit after tax was only VND3.2 billion, down 80 per cent over the same period last year.
Similarly, despite reaching a revenue of up to VND2.5 trillion, Vinacomin - Vang Danh Coal JSC (TVD) only earned VND21.4 billion in profit after tax, down 31 per cent year-on-year over because cost of goods accounted for more than 93 per cent of total revenue, not to mention the "burden" of business administration costs.
According to a representative of Vinacomin - Vang Danh Coal JSC (TVD), in the second quarter, coal consumption in the northern cities of Uong Bi and Dong Trieu areas faced many difficulties, causing the output to decrease by nearly 80,000 tonnes, affecting the company's revenue and profit results.
This development is also the common denominator of Coal Import and Export JSC (code: CLM), Mong Duong Coal, Northern Coal (code: TMB).
Localities such as Thai Nguyen, Quang Ninh, Bac Giang, Lang Son, and Dien Bien are the main domestic coal production areas of the coutnries. But due to certain impacts of the weather and damages by the economic downturn in the pandemic, mining and distribution activities were severely affected.
The deeper the mines are dug, the more costs businesses face.
