VietJet up 20% on debut

HANOI: VietJet Aviation Joint Stock Co surged by the 20% daily limit in its trading debut on the Ho Chi Minh City Stock Exchange, reflecting investor interest in Vietnam’s first mainboard-listed carrier as travel demand soars in the nation.

The stock rose to 108,000 dong at the close of trading, valuing the low-cost carrier at 32.4 trillion dong ($1.4 billion) and exceeding the market values of some rivals such as Asiana Airlines Inc.

VietJet, known for marketing stunts like bikini-clad flight attendants, listed 300 million shares after an initial public offering at 90,000 dong a share.

“The surge was already anticipated as the initial price was quite cheap and this is an attractive company with a positive growth story,” said Tran Thi Hai Yen, a Ho Chi Minh City-based analyst at ACB Securities JSC.

Rising living standards and more affordable tickets from budget carriers like VietJet as the nation gradually liberalised its aviation market have helped increase demand for air travel.

Vietnam will continue to see a doubledigit gain in passenger numbers in the next decade, after annual growth of 17% in the past decade, according to ACB Securities in December.

The listing by Vietnam’s only privatelyowned carrier will also boost the size and liquidity of the country’s $97 billion stock market, Southeast Asia’s second-best performer this year.

Vietnam Airlines Joint Stock Co sold shares in 2014 and currently trades on the regulated over-the-counter UpCom market in Hanoi.

Vietnam’s VN Index fell 0.9% at the close of trading yesterday.

The index has gained 6.9% this year, outpacing the 6% advance in the MSCI South East Asia Index.

Ho Chi Minh City Securities Co said in a Feb 7 note that it placed fair value for VietJet at 100,000 dong per share.

VietJet is the leading low-cost carrier in a country at the beginning of a long-term growth cycle with a compound annual growth rate of passenger volume forecast at 14%, according to the note.

“The airline has efficient cost management and potential to improve per-passenger ancillary revenue,’’ it said.