Stainless steel producer SHI to hold new share issue

Of the 10 million shares to be issued, SHI is selling 6 million to existing shareholders and the rest to strategic partners. “This increase in the holding of financial investors will help raise the liquidity of SHI shares,” deputy director Dam Quang Hung said.

SHI shares currently have very low liquidity, because large shareholders have bought up 70.7 per cent of the 26.7 million shares listed on the bourse.

As a result, SHI’s stock value is way below the par value of VND10,000/share, now hovering at around VND5,500/share, despite the firm’s strong performance. SHI shares ended the day on August 12 at VND6,300/share, up 1.61 per cent.

Hung said the low liquidity is partly due to SHI being a manufacturing firm, and its shares are not of particular interest to speculative investors.

SHI mainly imports stainless steel coils or sheets, and then rolls or cuts them to produce stainless steel products such as sinks, pipes, kitchen appliances, and solar energy water heaters. It sells 100 per cent of its consumer products in the domestic market, and almost all of its industrial products internationally.

SHI’s revenue grew by an average 14.28 percent per year in the 2009-2013 period. Revenue growth for the 2014-2018 period is expected at 15 per cent per year.

The firm is targeting the rural market and big government projects, such as those aimed at supplying clean water to rural areas.

As well as making stainless steel products, SHI also operates in retail and real estate and carries out environmental projects. According to the firm’s leaders, it and two foreign investors are negotiating to co-operate in running SHI’s supermarket chain Hiway, with the deal likely to be completed by the end of September.