Heated stock auction anticipated for Thang Long GTC

On August 13 more than 33.8 million stocks of the Thang Long GTC Company Limited, equivalent to a nearly 27.6 per cent stake, will be sold at a public auction with a starting price of VND10,600 per share, a little over face value.

The company is a member of major property developer BRG Group which possesses a chain of leading hotels and golf courses in the country, such as the Hilton Opera Hanoi, the Hilton Garden Inn, the Doson Seaside Gold Resort, the Legend Hill Gold Resort and the Kings’ Island Gold Course.

According to the Thang Long GTC prospectus, the company, also a member of Hanoi Tourism Corporation, operates chiefly in export-import, tourism as well as hotel and real estate leasing services, while its 2011-14 financial statements showed that the company has been reporting fairly stable business with stable year-on-year revenue growth. Their annual profit ranged from VND20 to 50 billion ($1-$2.3 million).

Besides the stable business performance and upbeat development prospects, the company is known for its land use rights over numerous golden places in Hanoi and its stake in big brands through contribution in the form of land use rights.

The Hanoi Management Authority has allowed the company to include their assets established on land as well as their long-term financial investments in the enterprise value when embarking on equitisation.

Accordingly, as of October 1, 2014 the company’s revised enterprise value was set at over VND1.37 trillion ($63.8 million) which was VND494 billion ($22 million) higher than the previous evaluation based on the company’s financial books.

Thang Long GTC has used their land use rights to become joint venture partners in InterContinental Hanoi Westlake (Tay Ho district), Hilton Hanoi Opera Hotel (Hoan Kiem district), Pan Horizon Hotel, Times Square Hanoi, the Big C Thang Long supercentre (Cau Giay district) and the Giang Vo compound (Ba Dinh district). All of these occupy spacious areas at prime locations in the capital.

Out of these holdings, the company stakes in the two five-star hotels InterContinental Hanoi Westlake and Hilton Hanoi Opera Hotel are $6.95 million and $7.41 million, equal to 25 and 30 per cent of the respective hotels’ total chartered capital. Meanwhile, the current market value of these hotels is set at over $171 million and $117 million by Bao Viet Securities, based on the recent M&A transaction figures of the hotel industry.

The company also possesses the land use rights of other prime estates with long leasing terms, such as the land area at 27 Quoc Tu Giam street which currently hosts the three-star Eastin Easy GTC Hotel, or that at 94 Ly Thuong Kiet street which has been rented by VinaCapital for 20 years to implement a hotel project.

According to the company’s chairman and general director Ta Minh Hung, the company envisages an annual 20 per cent jump in revenue and profit targets as well as offer as high as 50 per cent in annual dividend rates to shareholders.

Several investment funds have shared with VIR that they are considering stocking up on Thang Long GTC shares after they have been offloaded on the unlisted public company market (UpCom) three months after their IPO.