Simco Song Da faces delisting risk

Simco Song Da (SDA), listed on the Hanoi Stock Exchange (HNX) under ticker SDA, has been flagged for potential delisting after three consecutive years of audited financial statements receiving qualified opinions. The audited reports for 2023, 2024 and 2025 all carry qualified opinions. Under HNX regulations, the exchange will consider mandatory delisting of SDA. The company has five business days to submit a written response.

From losses to a small profit, but revenue weakened

In its 2025 audited financial statements, SDA reported a turnaround from a net loss of more than VND 100 billion in 2024 to a profit of VND 2.36 billion. However, the operating picture remained weak, with revenue falling 48% to nearly VND 21.5 billion.

Despite the revenue decline, gross profit increased to VND 1.8 billion, up sharply from just over VND 355 million in the same period.

Reversals of impairment provisions drove the swing

A key factor behind SDA’s improved result was financial costs and administrative expenses, influenced by reversals of impairment provisions.

• Net finance costs were negative by nearly VND 36 billion, compared with positive nearly VND 32 billion in the prior year, attributed to reversals of impairment provisions on investments.
• Operating costs fell by about half to more than VND 36 billion, including reversals of impairment on doubtful debts of nearly VND 56 billion.

In management’s explanation, the shift to profit was mainly due to 2024 provisions for financial investments in entities where capital was contributed and provisions for doubtful debts. In 2025, SDA recovered part of these and recognized reversals.

Auditor’s qualified opinion highlights unresolved issues

Even with the improved outcome, SDA’s financial statements still received a qualified opinion. The audit firm, International Auditing and Valuation LLC (IAV), pointed to several matters affecting the reliability of transactions and related provisions/reversals.

Receivables and advances from individuals

As of December 31, 2025, SDA had outstanding receivables and advances totaling over VND 88 billion from three individuals. While a provision had been recorded, IAV stated it could not obtain sufficient evidence to assess the appropriateness of the transactions or the provisioning.

Investment in Cat Tuong Thien Tan Lac JSC

The audit report also covered an investment of over VND 37 billion in Cat Tuong Thien Tan Lac JSC, which SDA disposed of for the same amount. IAV said it could not obtain sufficient evidence to assess the investment transaction, provisioning, or reversal. SDA explained the project was behind schedule; in 2024 it recognized 100% provision, and in 2025 it divested to restructure its portfolio.

Receivable with 100% provision and reversal

As of January 1, 2025, SDA had another receivable of over VND 58 billion with a 100% provision. The company stated it had collected part of it and reversed more than VND 57.1 billion. However, IAV reported it did not have enough evidence to verify the transaction, the provisioning, or the reversal of this receivable.

Going-concern concern

IAV also raised concerns about SDA’s ability to continue as a going concern. The company has accumulated losses of over VND 174.5 billion. At the same time, current assets were about VND 33 billion, below short-term liabilities of nearly VND 51 billion.