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Enterprises staggering because stocks in Vietnam are divested

Tuesday 08, 09 2020
The transfer of capital by many large enterprises to State Investment and Business Corporation (SCIC) is considered as one of the new relay factors for the Vietnamese market.
Enterprises staggering because stocks in Vietnam are divested

Saigon Beer - Alcohol - Beverage Joint Stock Corporation (SAB)

The transfer of SAB to SCIC is considered as a "new door" to help SAB shares gradually regain the same growth momentum as early July 2020 and create a second wave among divestments. government. It can be seen that this is one of the best events to help SAB in 2020. Right in the first 2 trading sessions after September 2 holiday, SAB shares rose sharply, then corrected but closed. the week is still above 190,000 dong/share. Previously, in July, SAB increased by nearly 50% after the news that the state would divest all 36% of its capital in Sabeco.
 
In addition, although in a state of waiting for an official move on the divestment roadmap, the transfer of state capital to a professional divestment organization like SCIC is considered positive by the market and the exit process capital can be accelerated.
 Saigon Beer - Alcohol - Beverage Joint Stock Corporation (SAB)
The biggest candidate interested in the divestment in Sabeco is probably Thaibev, the group behind Vietnam Beverage Co., Ltd., which currently holds the highest ownership rate with 53.59% of Sabeco's charter capital. Buying the remaining 36% capital can guarantee Thaibev's total decision-making power at Sabeco without having to worry about big decisions that might be vetoed by other shareholders. The plan to increase ownership in Sabeco was transferred by Thai billionaire Charoen Sirivadhanabhakdi - founder and owner of ThaiBev to the leader of the Vietnamese Government on the occasion of the 34th ASEAN Summit in Bangkok in mid-2019. After that, ThaiBev asked the Government of Vietnam to support this plan as well as create conditions for ThaiBev to expand investment in areas other than beverages. At the General Meeting of Shareholders in April 2019, answering questions from shareholders about the intention to buy more shares in Sabeco, the Thai representative also said that the possibility of buying more will be considered in case the Ministry of Industry and Trade divests. After merging business results with Sabeco in 2019, ThaiBev has achieved very positive business results, with a very strong increase in revenue and profit, specifically:
 

  • The group's beer sales reached 120 billion baht, equivalent to 92,200 billion. In which, Sabeco contributed 2.7 billion liters, up 31% from the previous year.

 

  • ThaiBev's 2019 beer segment gross profit reached 26.4 billion baht (20,300 billion dongs), an increase of 28%. Net profit for the beer segment alone reached more than 3 billion baht (VND 2,400 billion), grow more than 50%.

 

  • Sabeco's 36% ratio is enough to create a new game for investors to counter ThaiBev.

 
The new investment in Sabeco of Arisaig Asia's foreign-billion dollar fund group in May is an assumption for this scenario. If that is the case, the SAB market price will still fluctuate greatly.

The divestment effect is spreading widely

In August 2020, the stock market in Vietnam is quite interested in stocks that tend to increase based on the divestment of the state.
 
The divestment effect is spreading widely
Source: Vietnam Finance
 
With the information in the divestment list in the third quarter of SCIC, VOC shares of Vocarimex increased from 15,000 VND / share to over 23,000 VND / share, equivalent to 53%. SCIC's plan to sell 36% of its state capital is raising hopes of realizing Kido Group's plan to consolidate cooking oil. At this year's annual general meeting of shareholders, Mr. Tran Le Nguyen, General Director of Kido said, will merge member units such as Kido Foods, Tuong An, Vocarimex to dominate the dominant market share. Vietnamese cooking oil market. Kido currently holds 51% capital in VOC.
 
Shares of Vietnam Steel Corporation - Joint Stock Company (TVN) also increased by 35% in the past month, from 5,100 VND / share to 6,900 VND / share. The driving force for the upturn was seen from the news that SCIC is about to divest because TVN's main business is still quite difficult. Mr. Trinh Khoi Nguyen - Deputy General Director of TVN shared that the steel market is facing oversupply.
 
According to SEASI's assessments at the end of 2019, Southeast Asia may take up to 20 years for the market's demand to catch up with the supply. "The oversupply has made domestic firms increasingly fierce competition, especially price competition".
 
Regarding TVN, Mr. Nguyen said, competitiveness is limited due to the dispersed scale, many units have old technology and equipment and have not been invested and developed in recent years in the context of market surplus. capacity, demand plummeted, export activities affected ... Therefore, it is forecasted that TVN's production and business activities will be more affected than the market average.
 
On the last day of 8/2020, the capital of the Ministry of Construction in many corporations was transferred to SCIC.
 
With a very large state ownership rate in enterprises, for example in Vietnam Construction Consulting Corporation - Joint Stock Company is 312 billion VND, accounting for 87.32% of charter capital; Song Da Corporation - Joint Stock Company is VND 4,485 billion, accounting for 99.79% of charter capital; Construction Materials Corporation No. 1 - Joint Stock Company is 509 billion VND, accounting for 40.08% of the charter capital; Vietnam Water and Environment Investment Corporation - Joint Stock Company is VND 569 billion, accounting for 98.16% of its charter capital, SCIC is likely to focus on participating in governance and corporate restructuring first before making detailed plans for the divestment.
 
Translated by Vietnam Credit

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Investment

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