2016’s largest IPO deals in Vietnam

Vietnam Engine and Agricultural Machinery Corporation (VEAM)

On August 29, VEAM will launch its IPO to issue 167 million shares, equalling 13 per cent of its chartered capital. Foreign investors are offered the entire share volume on sale.

With the initial price of VND14,290 ($0.64) per unit, the auctioned share volume will be valued at a total VND2.38 trillion ($106.6 million).

After the sale, VEAM’s chartered capital will increase to VND13.28 trillion ($595.5 million), equalling 1.33 billion shares. Accordingly, the state will hold 51 per cent of the chartered capital with 678 million shares, and 36 per cent, equalling 478 million shares, will be divided amongst strategic shareholders.

VEAM employees will hold 0.49 per cent of the company stakes. The rest will be sold at the company's IPO on HNX.

It is considered an attractive IPO because the company currently holds a 30 per cent stake in Honda Vietnam, 20 per cent in Toyota Vietnam, and 25 per cent in Ford Vietnam. Furthermore, it owns numerous sizeable land plots in Hanoi, Ho Chi Minh City, Haiphong, Dong Nai, and Ba Ria-Vung Tau, among others.

Vietnam General of Agricultural Material Corporation (Vigecam)

Vigecam planned to launch its IPO on July 19 to issue 6,350,580 shares, equalling 28.87 per cent of its chartered capital, at the initial price of VND10,100 ($0.45) per unit. Once successful, its chartered capital will increase to VND220 billion ($9.85 million).

21 investors registered to join the IPO as the total registered shares tripled the number of issued shares. Vigecam’s IPO attracted numerous investors’ interest because it currently owns prime land plots in Hanoi, Haiphong, and Ho Chi Minh City. In addition, the corporation has two strategic shareholders, Vietnam National Vegetable, Fruit and Agricultural Product Corporation Joint Stock Company, which holds a 45 per cent stake and maintains a closer relationship with T&T Group, and Air Insurance JSC, with a 25 per cent stake.

However, the IPO was suspended on the authority’s order.

Vietnam Glass and Ceramics for Construction Corporation (Viglacera)

After the success of its IPO in 2014, the state decided to divest 30 million state-owned shares at the initial price of VND11,700 ($0.52) apiece through an auction in late July.

There were 178 investors joining the auction, counting 19 organisations and 159 individuals. The company registered 82.33 million shares, nearly three times higher than the initial share volume. However, only five investors won in the auction, buying a total 30 million shares at the average price of VND13,923 ($0.62) per unit. As the result, the state acquired VND417.7 billion ($18.7 million).

Vietnam Meat Industries Limited Company (Vissan)

Although Visan’s IPO is not the largest in 2016, it is dramatic as the registered price was boosted to five times higher than the initial price.

Notably, Vissan planned to sell more than 11.3 million shares, equalling 14 per cent of its chartered capital, at the IPO, with a starting price of VND17,000 ($0.76) each. The company expected to earn at least VND192 billion ($8.5 million).

In reality, six investors took over more than 140 bidders to put a hand on the entire 11.3 million shares for an average price of VND80,053 ($3.59) per share, The highest price was VND102,000 ($4.57). The state acquired VND906 billion ($40.6 million) on the stellar deal.

In addition, after the sale, Vissan found a strategic investor in Agro Nutrition Company JSC (Anco), a Masan Group subsidiary. Accordingly, Anco spent VND1.428 trillion ($63.9 million) on buying 11.33 million shares, equalling 14 per cent of Vissan’s chartered capital.

Vietnam Pharmaceutical Corporation (Vinapharm)

Vinapharm’s IPO in late June is also considered “hot” as it brought the participation of 175 winners.

These bidders registered to buy altogether 61 million shares at the initial price of VND10,433 ($0.47) apiece nearly 20 million shares higher than the initial figure. The IPO brought the state more than VND444 billion ($19.9 million).

Along with its positive business results, Vinapharm is currently the owner of prime real estates in Hanoi and Ho Chi Minh City, with 3,280 square metres on Lang Ha Street and 2,670 square metres on Nguyen Huy Tuong Street. It also has a sizeable land on Dien Bien Phu Street in Ho Chi Minh City.

Construction Corporation No.1 (CC1)

This successful PO was prominent in terms of the share volume sold. Notably, CC1 planned to issue 14,089,100 shares, however, the registered shares ended up at 68.958 million shares.

After the IPO, CC1’s chartered capital increased to VND1 trillion ($44.8 million). Currently the state holds 40 per cent of the stakes, strategic investors own 45 per cent, and CC1 employees hold 2.1 per cent. The rest was sold at the company's IPO.

Besides, Tuan Loc Construction JSC and Top American Vietnam JSC became CC1’s strategic shareholders by acquiring 41.8 and 7.7 million shares, equaling a 38 and 7 per cent stake, respectively.

Savina Vietnam Company Limited (Savina)

In March, Savina launched its IPO to sell more than 16 million shares, equalling 24 per cent of its chartered capital, at the initial price of VND13,072 ($0.59) to 74 investors.

Although the company has yet to reach encouraging business results, the IPO attracted investors because it currently owns numerous prime land plots in Hanoi. Besides, Vingroup joined the IPO as Savina’s strategic shareholder holding a 65 per cent stake.

Extraordinary protégées of the Ministry of Construction (MoC)

The MoC had plans to equitise four large enterprises, namely Song Da Corporation, Housing and Urban Development (HUD), Vietnam Urban and Industrial Zone Development Investment Corporation (IDICO), and Vietnam Cement Industry Corporation (VICEM) in 2016 as part of its scheme to let all state-owned enterprises (SOEs) under its umbrella go public.

Song Da Corporation is the major contractor of almost all hydropower projects in Vietnam. In 2014, Song Da reached more than VND21 trillion ($940.9 million) in revenue and a pre-tax profit of VND254 billion ($11.4 million).

HUD is the investor of a series of large-scale construction and new urban area projects across the country, including My Dinh and Viet Hung urban areas. The company currently has a total chartered capital of VND3.98 trillion ($178.3 million).

VICEM currently owns eight subsidiaries, including Vicem Haiphong, Vicem Hoang Mai, Vicem Bim Son, and Vicem Hoang Thach, among others, five of which already completed the equitisation process.

IDICO has invested and run 17 industrial park projects throughout the country, with a total investment capital of VND10 trillion ($448 million). Projects under the IDICO brand include Nhon Trach 1 and Nhon Trach 5 IPs in Dong Nai province, My Xuan A and Phu My II IPs in Ba Ria-Vung Tau, and Que Vo 2 IP in Bac Ninh province.

In 2015, IDICO had a total asset of VND12.45 trillion ($557.8 million), with a profit of VND272 billion ($12.2 million).

The ticket to the power sector

PV Power, PetroVietnam’s power arm, plans to sell a 25 per cent stake at its IPO in October, as part of the company’s restructuring plan for this year. PetroVietnam currently holds a 75 per cent stake in PV Power.

As of the end of 2015, PV Power’s shareholders’ equity stood at VND21.8 trillion ($980 million). The company’s 2015 revenue stood at VND25.3 trillion ($1.13 billion) and its pre-tax profit was VND3.1 trillion ($140 million).

In the first quarter of 2016, the company’s power output was 5.7 billion kWh. The company targets a total output of 21 billion kWh, fetching a total revenue of VND29.4 trillion ($1.3 billion), a pre-tax profit of VND680 billion ($30.5 million), and an after-tax profit of VND600 billion ($27 million) in 2016.

The telco giant (MobiFone)

MobiFone’s IPO, which is expected to occur in the third quarter of 2016, is considered one of the most attractive deals in 2016.

Foreign telecommunications giants, namely Norway's Telenor, Sweden's Comviq, and Australia's Telstra, showed interest in acquiring MobiFone’s stakes when the mobile phone service provider goes public this year.

MobiFone currently has a total chartered capital of VND15 trillion ($672.1 million). During the 2010-2014 period, its total revenue reached VND191 trillion ($8.6 billion) with a pre-tax profit of VND33 trillion ($1.5 billion).

In 2015, the company acquired VND36.9 trillion ($1.65 billion) in revenue and VND7.39 trillion ($331.1 million) in profit.

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