Kosy (KOS) Divests Hydropower Subsidiary After 11 Floor Sessions

Overview

Kosy (HOSE: KOS) announced a board resolution to divest its entire stake in CTCP Tư vấn Đầu tư Xây dựng Thủy điện, a hydropower subsidiary that owns the Nậm Pạc 1 and Nậm Pạc 2 plants in Lai Châu. The resolution was issued on 5 October, the same day KOS recorded its 11th consecutive floor-price session. The transfer value and buyer were not disclosed.

Key Facts

• Kosy will sell its full stake in CTCP Tư vấn Đầu tư Xây dựng Thủy điện, which will cease to be a subsidiary after completion.
• The original investment cost was VND 514.5 billion, representing about 12.6% of Kosy’s standalone total assets and nearly 70% of its long-term investment portfolio at end-2025.
• The hydropower unit operates Nậm Pạc 1 (14.5 MW, ~57.4 million kWh/year) and Nậm Pạc 2 (16 MW, ~63.6 million kWh/year) in Lai Châu.
• At end-2025, the subsidiary reported total assets of nearly VND 1,191 billion and net revenue of over VND 153.7 billion.
• In 2025, the hydropower segment generated nearly VND 154 billion in revenue and over VND 61 billion in gross profit, equal to about 35% of Kosy’s consolidated gross profit.
• KOS closed at VND 13,700 on 5 October, down nearly 60% from around VND 30,000 in mid-September, with roughly 36 million shares queued at the floor.
• Kosy has more than 216 million shares outstanding; market capitalization at the 5 October close was approximately VND 2.96 trillion.

What Happened

Kosy’s board of directors approved the transfer of the company’s entire capital contribution in CTCP Tư vấn Đầu tư Xây dựng Thủy điện, according to a company resolution dated 5 October. Upon completion, Kosy will no longer hold any stake in the entity, and the hydropower company will no longer be a subsidiary. The resolution did not disclose the transaction value or the identity of the buyer.

The divestment comes amid severe selling pressure in KOS shares. The stock has fallen to the floor for 11 consecutive sessions since 21 September, closing at VND 13,700 on 5 October. At the end of that session, nearly 36 million shares were offered at the floor price while matched volume was only about 41,000 shares. Kosy had acquired 98% of the hydropower company in 2021 through a share-swap issuance. Despite not paying dividends to Kosy in the past two years, the subsidiary remained a consolidated profit contributor, with after-tax profit falling to just over VND 6 billion in 2025 from over VND 15.2 billion in 2024.

Market Context

KOS is listed on the Ho Chi Minh Stock Exchange (HOSE) and operates in the real estate sector, with the hydropower unit representing a rare stable cash-flow asset within the group. The 11-session floor streak has erased nearly 60% of the share price from mid-September levels, leaving market capitalization at roughly VND 2.96 trillion. The decline has occurred against a broader Vietnamese market backdrop that has seen sharp corrections in highly leveraged property names, with margin calls and forced selling amplifying downside moves. The resolution’s timing, on the 11th floor session, suggests the company may be seeking to shore up liquidity or streamline its portfolio under duress.

Strategic Significance

For long-term investors, the divestment removes a profitable and relatively predictable earnings stream. The hydropower unit contributed about 35% of Kosy’s consolidated gross profit in 2025, and its sale could materially alter the company’s earnings profile. The lack of disclosed buyer and price leaves open the question of whether the transaction was executed at a discount to the VND 514.5 billion book value, which would imply a further hit to Kosy’s already strained balance sheet. The move also raises questions about Kosy’s strategic direction: whether it is retreating from non-core assets to focus on real estate, or whether it is selling assets to meet immediate financial obligations. Without clarity on the proceeds, investors cannot assess whether the sale strengthens or weakens the company’s capital position.

What to Watch

• Disclosure of the transfer value and buyer identity in a subsequent filing or financial statement.
• Kosy’s Q3 2026 earnings release, which may show the impact of the divestment and any impairment charges.
• Trading volume and whether the floor-price streak breaks, indicating a potential bottom or continued liquidation.
• Any additional asset-sale announcements or restructuring moves by Kosy’s board.
• Regulatory filings on insider or major shareholder transactions, given the recent margin-call pressure on the chairman.