Companies slow down their listing plans amid market turbulence

A female investor watches stock indices on her laptop screen. Many enterprises have submitted listing documents, but so far, they have not yet completed the procedures to be approved by HOSE.- VNA/VNS Photo

Hanoi - Most companies are slowing down their listing plans in the context of unfavourable market movements and poor business performances, with some even withdrawing their listing documents.

Enterprises stop listing plans

In the first week of April 2023, for the first time there were two companies withdrawing their listing documents on the Ho Chi Minh Stock Exchange (HoSE). One of them is Phu Hung Securities Company which withdrew their listing documents for 150 million shares submitted on November 8, 2022 with the reason that the stock market situation was not favourable for the listing of shares.

Ton Dong A Joint Stock Company withdrew its listing application for nearly 115 million shares submitted on April 22, 2022, due to the macro-economic situation at home and abroad leading to negative business results in 2022. In 2022, the company lost VND276.5 billion (US$11.7 million).

In addition, one enterprise that cancelled its listing plan on HOSE was Sacom Real Estate Joint Stock Company (SamLand), because the listing plan was no longer consistent with the company's development orientation in the near future.

In 2022, SamLand lost VND61.79 billion, while in 2021, it reported a profit of VND5.96 billion. At this year's shareholders' meeting, the company expected to lose nearly VND16 billion in 2023.

SamLand is the investor in the 55.2ha Nhon Trach project in Dong Nai and the SamLand Riverside project in HCM City. These two projects are behind schedule, in which the SamLand Riverside project has problems with land laws and cannot be implemented.

At the beginning of March 2023, HoSE announced that it would stop considering the application for listing shares of An Giang Agro-Food Import-Export Joint Stock Company, because this company had not submitted additional documents that HoSE requested.

Many other enterprises have submitted listing documents, but so far, they have not yet completed the procedures to be approved by HoSE for listing such as Thanh Cong Securities Company, which submitted a listing application for more than 100 million shares on March 17, 2022; Viet Nam Construction Securities Company filing for listing 16.8 million shares on March 18, 2022; Quy Nhơn Port Joint Stock Company with 40.4 million shares on April 18, 2022; CRV Real Estate Group Joint Stock Company with 672.4 million shares on June 8, 2022; VCP Energy and Construction Joint Stock Company with 83.79 million shares on June 14, 2022 and Saigon SRG Investment Joint Stock Company with 92.9 million shares on August 11, 2022.

According to regulations, enterprises wishing to list shares on HoSE must have charter capital of VND120 billion or more, two consecutive profitable years before the year of listing registration, return on equity (ROE) of at least 5 per cent, no debt overdue for more than a year, no accumulated loss, at least 20 per cent of voting shares owned by at least 300 shareholders who are not major shareholders, shares have been traded on UPCoM for at least two years and approved for listing by the general meeting of shareholders.

Companies' plan to issue more shares

In the past year, the stock market has had poor performance, with scores and liquidity decreasing, but many listed companies still plan to issue shares to supplement capital for unfinished projects.

Sonadezi Châu Đức Joint Stock Company (SZC) plans to issue 60 million shares to existing shareholders at a ratio of 2:1.

According to data from SSI Securities Company, by the end of 2022, the book value of SZC shares was VND15,343 per share, while the market price on the stock exchange now is VND30,700 per share.

SZC plans to use capital raised from issuing shares to supplement capital for Chau Duc Urban Area and Golf Course project, or Chau Duc Industrial Park project in Ba Ria-Vung Tau province.

Construction Development Investment Joint Stock Corporation (DIG) has approved a plan to offer up to 100 million shares to existing shareholders at the price of VND15,000 per share. The company will use the entire amount of VND1.5 trillion mobilised to invest in the Long Tan Tourist Urban Area project, which needs an additional capital of VND2.85 trillion.

Technical Infrastructure Development Joint Stock Company (IJC) plans to offer 125.9 million shares to existing shareholders at a ratio of 2:1 at the price of VND10,000 per share, to mobilise VND1.26 trillion to build infrastructure projects, pay debts and supplement working capital.

IJC's 2023 Annual General Meeting of Shareholders approved the adjustment of the Sunflower II housing project, increasing the land use area from 58,693sq.m to 100,724sq.m bringing the total investment capital from VND1.46 trillion to VND3 trillion.

Businesses plan to raise capital from shareholders because the corporate bond channel is facing difficulties, while the bank credit channel confronts some challenges such as rising interest rates, and revaluation of collateral assets being in a downward direction.

Listing outlook looks poor The plans of many firms to list have been slowing down due to unfavourable market and business conditions, and several firms have even made a U-turn on their decision.

Companies hold back from listing in exchange shake-up A number of companies have postponed or entirely cancelled plans to list in Vietnam due to current market volatility and economic uncertainties, while some banks signal their intention to tap into broader funds by switching to the Ho Chi Minh City bourse.