DQC Audited 2025 Profit Falls 57% to VND 4.87B After SSC Fine

Overview

Dien Quang Group (HOSE: DQC) reported audited 2025 net profit of VND 4.87 billion, down more than 57% from the VND 11.53 billion shown in its unaudited Q4 2025 consolidated statements. The restatement followed the auditor’s rejection of a VND 21.25 billion provision and additional tax and cost adjustments, and the State Securities Commission separately fined the company VND 150 million for misreporting profit.

Key Facts

• Audited 2025 net profit: VND 4.87 billion, versus VND 11.53 billion pre-audit, a decline of more than 57%.
• The auditor disallowed a 100% provision of VND 21.25 billion against the company’s investment in Xelex Group, ruling it ineligible as a deductible expense.
• The disallowance triggered additional corporate income tax of VND 4.25 billion at the 20% rate.
• A VND 1.2 billion dividend from the Vietnam Textile and Garment Group was reversed because revenue recognition was moved from the 31 December 2025 record date to the 6 March 2026 payment date.
• Other 2025 cost adjustments totaled more than VND 1.18 billion.
• The State Securities Commission fined DQC VND 150 million (about USD 6,000) for publishing distorted profit figures.
• H1 2026: net revenue above VND 565 billion, up 58% year on year, with net profit above VND 14 billion, double the H1 2025 level.

What Happened

In a filing explaining and remedying the profit discrepancy, Dien Quang said it had booked a full provision against its VND 21.25 billion investment in Xelex Group before the audit. The auditor determined the provision did not qualify as a deductible expense for corporate income tax purposes, so the company added VND 4.25 billion of tax at the 20% rate. Separately, the company had recognized more than VND 1.2 billion of financial income from a Vietnam Textile and Garment Group cash dividend based on the 31 December 2025 record date; the auditor held that recognition should fall on the 6 March 2026 payment date, so the amount was reversed out of 2025. A further VND 1.18 billion of 2025 costs were adjusted during the audit.

The State Securities Commission had already fined Dien Quang VND 150 million for the profit misstatement, and the company’s disclosure is framed as an explanation and remediation of that finding. Despite the restatement, DQC remained profitable in 2025, recovering from after-tax losses of VND 121.9 billion in 2024 and VND 33.4 billion in 2023.

Market Context

DQC trades on the Ho Chi Minh City Stock Exchange (HOSE) and closed at VND 9,690 on 17 September 2026. The stock sits in the electrical equipment segment of the personal and household goods universe, a sector where input costs, receivables and legacy investment holdings have weighed on smaller capitalized names. The company’s balance sheet at 30 June showed total assets of roughly VND 1,134.5 billion, including VND 314.5 billion of inventory, VND 278.3 billion of short-term receivables and VND 276 billion of fixed assets, against VND 346.8 billion of liabilities and VND 787 billion of equity. The return to profit after two loss-making years, alongside the H1 2026 revenue growth of 58%, is the counterweight to the audit-driven earnings cut.

Strategic Significance

For long-term holders, the central issue is not the VND 6.66 billion profit reduction itself but what it reveals about internal controls over tax provisioning and revenue recognition. A provision that the auditor deems non-deductible, and dividend income booked on the wrong date, are both timing and classification errors that a stronger finance function would have caught before publication. The VND 150 million fine is small in absolute terms but signals regulatory scrutiny of DQC’s reporting. The offsetting thesis rests on the operating recovery: H1 2026 net profit of more than VND 14 billion already exceeds the full audited 2025 result, suggesting the core lighting and electrical business is generating cash again. The Xelex holding remains the key overhang, since its carrying value and any future recovery or further write-down will flow directly through earnings.

What to Watch

• Q3 2026 consolidated results, to confirm whether the H1 revenue growth of 58% and doubled profit are sustained.
• Any further disclosure from the State Securities Commission or HOSE regarding the misstatement and remediation.
• The carrying value and status of the Xelex Group investment in the 2026 interim and annual reports.
• Progress on collecting the VND 278.3 billion of short-term receivables and managing the VND 314.5 billion inventory balance.
• Whether the VND 1.2 billion textile dividend is recognized in 2026 financial income as scheduled on 6 March 2026.