Three State-owned enterprises (SOEs) will make initial public offerings (IPOs) in March, floating VNĐ2.5 trillion (US$110 million) worth of stakes in the market in the second wave of SOEs IPOs in 2018.
This value is more modest compared to the total VNĐ26 trillion ($1.15 billion) IPOs of five large SOEs in January and early February.
Viet Nam Southern Food Corporation (Vinafood 2) is the biggest company and will make the first IPO on March 14. The corporation will auction 114.8 million shares, an equivalent to 23 per cent of its charter capital of VNĐ5 trillion.
At the minimum bidding price of VNĐ10,100 per share, the State is expected to collect at least VNĐ1.16 trillion from this share sale.
The Ministry of Agriculture and Rural Development will hold 51 per cent of the company’s capital after the IPO and about 25 per cent will be offered to strategic investors in a later move. Only 1 per cent of the capital will be sold to employees.
Only T&T Group has so far filed documents to become Vinafood’s strategic investor, but the company operates mainly in real estate, finance, industry and import-export trading market segments.
Vinafood plays a key role in exporting Vietnamese rice. In the first half of 2017, the company earned VNĐ4.43 trillion in revenue but reported a loss of VNĐ118 billion.
The second-biggest company to hold an IPO is Bình Dương Manufacturing & Import Export Corp (Protrade Corp) with 30 million shares, or 10 per cent of its charter capital of VNĐ3 trillion, on offer in its public share sale on March 28.
The starting price for auction will be VNĐ12,000 a share, bringing the State budget at least VNĐ360 billion if all shares are sold.
This is the third company from Bình Duong that has conducted an IPO in recent times. Petrol dealer Thanh Le General Import-Export Trading Corporation (Thalexim) and Investment and Industrial Development Corporation (Becamex IDC) made IPOs in the last quarter of 2017.
Only Thalexim sold all of its share offerings while Becamex IDC sold only 7.7 per cent of its shares in two auctions.
Hanoi Trade Corporation (Hapro) is the last company to make an IPO on March 30 on the Hanoi Stock Exchange. The company will float nearly 76 million shares, or 34.51 per cent of its charter capital at the minimum bidding price of VNĐ12,800 per share.
At this price, the company is valued at almost VNĐ2.82 trillion, higher than its charter capital of VNĐ2.2 trillion. The successful sale will bring the company at least VNĐ971 billion.
The State will not hold Hapro’s capital after the equitisation and about 65 per cent of its stakes will be sold to strategic investors.
Hapro has over 40 member companies with presence in over 70 countries and territories. The IPO is expected to draw many investors as the company owns many commercial premises in prime locations in major cities and provinces.
In 2017, the company’s revenue declined 17 per cent year-on-year to VNĐ1.93 trillion. Its profit was also modest at just VNĐ11 billion, equivalent to one-sixth of the 2016’s figure.
After three successful IPOs in January—of Bình Sơn Refining and Petrochemical, PV Power and PV Oil—the two latest IPOs of Viet Nam Rubber Group and EVN Generation Corporation 3 have failed to attract investor attention. Thus, the outlook for the next three IPOs is uncertain in the context of the volatile stock market.
Photo: CBR Investment AG