Duc Giang Chemicals (DGC) Stock Downgraded to Control Status by HoSE

Overview

HoSE has reclassified Duc Giang Chemicals Group (DGC) stock from warning to control status effective May 13, 2026, due to a delay of over 30 days in submitting the audited 2025 financial report. The company also reported a sharp decline in Q1 2026 earnings and plans to elect new board members following the prosecution of several executives.

Key Facts

• HoSE moved DGC from warning to control status on May 6, effective May 13, 2026.
• The downgrade was triggered by a >30-day delay in filing the audited 2025 financial report.
• DGC was also removed from margin trading eligibility due to a >5-day delay in publishing the audited report.
• An extraordinary general meeting on May 8, 2026 will elect three new board members to replace prosecuted executives: Dao Huu Huyen, Dao Huu Duy Anh, and Pham Van Hung.
• Q1 2026 revenue fell 24% YoY to VND 2,125 billion; net profit dropped 49% to VND 430 billion.
• Total assets at end-Q1 2026 were over VND 18,000 billion, with cash and deposits of ~VND 11,200 billion (62% of assets).
• The company will also hold its 2026 annual general meeting on June 30, 2026.

What Happened

On May 6, 2026, HoSE announced the reclassification of DGC shares from warning to control status, effective May 13. The reason cited was the company’s failure to submit its audited 2025 financial report within 30 days of the deadline. Previously, DGC had been placed on warning status on April 23 and removed from margin trading eligibility due to a delay of more than five business days in publishing the audited report.

In a filing, DGC stated it would hold an extraordinary shareholder meeting on May 8 to select a new auditor for the 2025 financial statements. The candidates are A&C Auditing and Consulting Co., Ltd. and UHY Auditing and Consulting Co., Ltd. The chosen firm will audit the 2025 statements, review the semi-annual 2026 report, and audit the 2026 annual report. The meeting will also elect three new board members to replace those who have been prosecuted and detained: Dao Huu Huyen, Dao Huu Duy Anh, and Pham Van Hung.

Market Context

DGC shares closed at VND 56 on April 15, 2026, down 1.07% with low volume of 332,600 shares. The stock has fallen to its lowest level in about three years amid negative news regarding leadership and operational challenges. The control status further restricts trading, as shares under control can only be traded on settlement dates (T+3) and are not eligible for margin. The broader chemicals sector on HOSE has faced headwinds from rising input costs and regulatory scrutiny.

Strategic Significance

The control status and leadership vacuum create significant uncertainty for DGC’s governance and financial reporting timeline. The company’s heavy reliance on cash and deposits (62% of assets) provides a buffer, but the sharp decline in Q1 earnings—driven by a tripling of sulfur costs and the suspension of mining at the key apatite mine 25—highlights structural cost pressures. The election of new board members and selection of a new auditor are critical steps to restore compliance and investor confidence. However, the delay in audited financials may also affect dividend payments and future capital market access.

What to Watch

• Outcome of the May 8 extraordinary shareholder meeting: selection of auditor and election of new board members.
• Submission of the audited 2025 financial report and subsequent HoSE review for potential status change.
• Q2 2026 earnings report to assess whether cost pressures persist and if production normalizes.
• Any further regulatory actions or prosecutions related to the company’s leadership.
• Annual general meeting on June 30, 2026, for approval of 2025 financial statements and dividend policy.