VN’s UPCoM-traded firms seek ways for bourse switch
VIETNAM’S unlisted public companies are planning to move to the Ho Chi Minh and Hanoi stock exchanges to increase share liquidity and capital.
Deo Ca Traffic Infrastructure Investment JSC (UPCoM: HHV) will propose shareholders approve a plan to cancel trading on the Unlisted Public Company Market (UPCoM) to list on the Ho Chi Minh Stock Exchange (HoSE) in June next year.
The company is trading more than 227 million shares on the UPCoM. The switch will allow the company to raise capital, thus funding its infrastructure investment projects.
Deo Ca Traffic Infrastructure Investment is the investor of many build-operate-transfer (BOT ) projects such as Bac Giang-Lang Son Highway, Deo Ca Tunnel and Phuoc TuongPhu Gia Tunnel. This year, the company will need 730 billion dong ($31.7 million) to invest in the two former projects.
Last year, the company earned 477 and 155 billion dong in total revenue and profit, respectively. Earnings targets for this year are expected at 1.7 trillion dong worth of revenue and 185 billion billion worth of profit, up 260 per cent and 19 per cent year-on-year.
Equitised Binh Son Refining a n d Pe t r o c h e mi c a l J S C (UPCoM: BSR) has filed to list its 3.1 billion shares on the Hanoi Stock Exchange (HNX). The filing has been received.
The listing will make BSR shares more liquid, allowing the government to proceed with its divestment plan, said the board of directors.
Ending the first quarter, BSR posted a record loss of 2.35 trillion dong. The company targets a total output of 5.56 million tonnes of products for this year – a total revenue of 80.68 trillion dong and a total posttax profit of 1.18 trillion dong.
The post-tax profit for the whole year is expected to drop nearly 60 per cent year-on-year as crude prices are expected to trade at $60 per barrel on average this year. Earnings targets can be adjusted upon the movement of oil prices.
Other popular names that a re c on sider i ng a bou r s e s w itch i ncluded i ndust r ia l pa rk de veloper Na m Ta n Uyen JSC (NTC) a nd some lenders like Vietnam Thuong
Tin Commercial Joint Stock Bank ( VietBank – V BB), Lien Viet Post Joint Stock Commercia l Bank (LienVietPostBank – LPB) and Kien Long Commerc i a l Joi nt Stock Ba n k (KienLongBank – KLB).
UPCoM is seen as a transit station to encourage unlisted companies to trade their shares on the Vietnamese equity market. This is also the secondary option for those that are removed from the two stock exchanges to keep their shares liquidating.
Information and earnings quality standards on UPCoM are often lower than the two exchanges, so the majority of stocks are not as attractive to investors. Therefore, the market liquidity is lower than that of the two exchanges.
On Monday, the market index UPCoM dropped 0.73 per cent to end at 55.54 points with nearly 41.5 million shares being traded, worth 439 billion dong.
Trading volume a nd va lue of t he HN X were double UPCoM’s while t hose of t he HoSE were 17 a nd 52 t imes hig her, respect ively.
If t hose f irms are qualif ied for HoSE and HNX listing, it means they are able to meet st r icter requirements set by t he t wo e x c ha nge s, t hu s a l low ing sha res to be more active to benefit shareholders and investors.