BKAV kicks off bond issuance and will soon conduct IPO?

Nguyen Tu Quang, CEO of BKAV

BKAV has just revealed plans to issue bonds worth VND170 billion ($7.4 million) for its subsidiary BKAV Pro specialised in antivirus software, cybersecurity, Camera AI View, among others. Of this, about VND500 million ($21,740) of bonds will be offered initially. The rest will be issued once the company is officially listed on the stock exchange, according to BKAV CEO Nguyen Tu Quang.

Local securities company VNDirect, on behalf of BKAV, will issue the bonds with a three-year tenor and an annual interest rate of 10.5 per cent. The sum collected from the bond issuance will be invested in developing Camera AI View, digital transformation solutions, and affordable Bphone devices to approach customers.

However, the company remains silent about the specific timeline for the initial public offering (IPO). If it comes true, BKAV will be the fourth technology company listed in the local securities market, following Yeah1 (HSX: YEG), FPT (HSX: FPT), and Clever Group Corporation (UPCoM: ADG).

“It is not easy for local technology companies to list in the stock exchange,” said Le Van Luong, an analyst at Bao Viet Securities. Yeah1 is a highlight of this. After three years on the Ho Chi Minh City Stock Exchange (HSX), the YEG stock has been in a nosedive from VND300,000($13.04) in 2018 to around VND20,000 (87 US cents) at present.

Meanwhile, local unicorn VNG is still silent about its IPO plan since declaring intentions to list on the NASDAQ in May 2017. This is not strange because FPT took nearly two decades to stage its IPO while Yeah1 and ADG took 10 and 11 years, respectively.

Luong said that the successful tech firms in Vietnam usually specialise in software outsourcing and advertisement and have little need for investment. Others specialising in e-commerce, e-wallet, and software development are still in the process of establishing themselves and have been taking on tremendous losses. As a result, they are unfit to mobilise capital via IPO as major investors are more interested in profitability.”

Luong added that these companies better fit the investment taste of venture capital funds. Furthermore, the local technology sector has only begun to evolve in recent years and is still small compared to other markets.