Photo: Duc Anh
1.3 billion shares to start at $1.9, HoSE announced on April 14.
The Vietnam National Petroleum Group (Petrolimex) will begin trading on the Ho Chi Minh Stock Exchange (HoSE) on April 21 with shares starting at VND43,200 ($1.9), bringing its market value to VND55.9 trillion ($2.46 billion), the exchange said in a statement on April 14.
The listing of Petrolimex, which is 76 per cent owned by the government, is part of Vietnam’s push to equitize State-owned enterprises to attract investment. Petrolimex held its initial public offering (IPO) in 2011, which in Vietnam is a separate step from listing shares.
A total of 1.3 billion shares are to be listed on HoSE and the price is allowed to move within a band of 20 per cent on the day of its debut and 7 per cent thereafter.
Petrolimex holds a market share of 48-50 per cent of Vietnam’s petroleum retail and distribution business, according to Saigon Securities Incorporation (SSI), which is advising Petrolimex on the listing.
Last year’s business results were impressive, especially estimated profits earned by member companies: Petrolimex Aviation with VND372 billion ($16.4 million), Van Phong Bonded Oil Warehouse VND188 billion ($8.3 million), Petrolimex Singapore VND74 billion ($3.26 million), and Petrolimex Laos VND14 billion ($618,000).
The Group earned net profit of $226.6 million in 2016 on revenue of $5.4 billion, up 50.2 per cent and down 16.2 per cent, respectively, against 2015. Pre-tax profit surged 68 per cent to VND6.3 trillion ($276.6 million) but the figure is expected to fall 34 per cent this year to VND4.1 trillion ($180.8 million), according to SSI.
One large shareholder of Petrolimex, Japan’s JX Holdings, has picked up 8 per cent since mid-2016. According to Chairman Bui Ngoc Bao, Petrolimex expects to raise JX’s ownership to around 20-25 per cent in the future.
JX Holdings is Japan’s largest company and has operations similar to Petrolimex, according to Mr. Bao. By March 2016, it held a local market share of 50 per cent. “They have a long history of more than 100 years, experience in the organization of business activities, and development strategies similar to ours,” he told investors during Petrolimex’s listing roadshow last month.
“We follow the ‘one wife-one husband’ rule,” the Chairman added. “JX is a suitable strategic investor in the field of petroleum, and is the only strategic investor. That’s how we can share all information and trust each other completely.”
The listing is a stepping stone for a possible stock market debut overseas for Petrolimex, he went on, and he sees Singapore, both a financial and energy hub, as a suitable location. No plan has been mapped out as yet, he said.
The Group aims to earn turnover of $10 billion in 2020 and pay an annual dividend of 12 per cent per share. Its shares are now traded on the over-the-counter (OTC) at a price of VND50,000 ($2.2).