Oil giant’s early listing possible after imminent IPO

Petec’s deputy general director Do Hoang Phuc told VIR that after its initial public offering (IPO) on December 29, 2010, Petec might list on the stock market in early 2011.

The firm will become the first state-run oil trading company in Vietnam to sell shares to the public. Thirteen million shares will be on offer at the initial price of VND21,000 per share.

Currently, Petec has a 13 per cent oil market share, following Petrolimex and PV Oil with 52 and 21 per cent respectively, according to the issuer’s prospectus.

The 13 million shares offered public makes up 5 per cent of Petec’s VND2,600 billion ($133 million) chartered capital. The state owns a 51 per cent stake and 43.78 per cent is to be owned by a strategic partner.

Phuc said the price was based on many factors including its financial situation, the market and market prices of other oil stocks.

“The price is reasonable given the current stock market situation,” said a Petec spokesman.

The price Petec offered is lower than some other current oil stocks such as COM at VND36,900 per share, SFC at VND33,000 or PVG at VND31,000

However, Lien Viet Securities Joint Stock Company chief analyst Vo Van Minh said Petec’s initial price of VND21,000 was not cheap compared with its peers’. “PVG’s earnings per share is now about VND3,500-4,000, while Petec’s expected earnings per share is estimated about more than VND1,000,” he said.

Minh noted oil stocks  originally attracted many investors’ attention, especially stocks relating to the state-owned PetroVietnam, Vietnam’s largest corporation.

Meanwhile,  Thang Long Securities Corporation analyst Nguyen Quang Huy had a cautious outlook on Petec’s IPO.

“It will be quite difficult for the auction to see a good result as currently many companies and banks have a plan to mobilise capital, unless it must be a really attractive stock,” said Huy.

For the first half of this year, the company reached a VND89.621 billion ($4.6 million) after-tax profit. The returns on assets and equity were 2.1 per cent and 7.4 per cent respectively, the prospectus showed.

Plan of dividend payment is set by the company at 8 per cent for 2011 and 10 per cent for 2012.