VNR aims to raise modest $6.2m from share sale

 

The Viet Nam Railway Corporation (VNR) hopes to raise at least VND139 billion (US$6.2 million) in 2018 from selling its ownership in 15 subsidiary and affiliate companies, reported online newspaper baodautu.vn.

Deputy Transport Minister Nguyen Ngoc Dong recently signed Document 1142/BGTVT-QLDN, approving VNR’s selling of its holdings in those 15 companies.

The 15 companies have total charter capital of VND680.5 billion, and VNR holds one-fifth of the figure, equal to VND139.1 billion based on the face value of shares (VND10,000 per share).

Those firms are divided into three groups. Nine of them are those in which VNR had previously sold parts of its ownership, including Transport Investment and Construction Consultant JSC, Da Nang Construction JSC and Railway Urban and Infrastructure Development Investment JSC.

Four of the 15 companies are those in which VNR had previously put its shares up for sale, but failed to draw attention from investors. Those included Railway Construction Corporation and Project 3 Construction and Investment JSC, which are traded on the stock market.

The remaining companies are mining business Dong Mo Stone JSC and My Trang Stone JSC. VNR will make its first attempt to sell stakes in these two companies.

Though shares of these companies are apparently unattractive to investors, they are highly valued by securities firms. Shares of My Trang Stone JSC are valued at 11.2 times their face value, 4.2 times for Dong Mo Stone JSC and 2.3 times for Railway Construction Corporation.

If the sales are carried out successfully, VNR could raise more than VND139 billion, to increase its spending on purchasing new rail cars and upgrade large railway stations this year.

“The management board of VNR should ask for opinions from the finance and planning and investment ministries so that it could develop the plan to sell its shares in those companies, while assuring the deals comply with existing regulations and provide high income to the State budget,” Deputy Minister Dong said in the document.

In order to make the sales more attractive to investors, in November 2017, VNR proposed its divestment plans to the Ministry of Transport, including starting prices and offering methods.

Under the plan, VNR will offer shares in packages for bidding on the Ha Noi Stock Exchange and financial institutions, seeking to sell the remaining shares in the nine companies in which it had previously sold part of its ownership.

VNR will sell shares of the four firms that are traded on the stock market at market prices at the correct times. Also, the State-run railway corporation will offer shares of the two stone mining companies for sale on the Ha Noi Stock Exchange.

To declare the starting prices of the sale, VNR proposed that the Ministry of Transport allow it to use the share price valuations conducted by financial institutions.

According to Dong, the divestment plans were also sent to the ministries of Finance and Planning and Investment to collect feedback.

In response, the Ministry of Planning and Investment said the plans may work well for the four companies trading on the stock market, and for Dong Mo and My Trang stone miners, as they comply with the Government’s Decree 91/2015/ND-CP dated October 13, 2015 on management of State capital in businesses.

However, the planning and investment ministry raised some concerns over the divestment plans for the four companies in which VNR planned to sell shares on the Unlisted Public Company Market (UPCoM), as the market prices of the shares were lower than the face values.

ZaloPay targets 1,000 points of sale

ZaloPay e-wallet, developed by VNG Corportion, aims to open about 1,000 new points of sale in 2018, according to Phan Thanh Thao, business development director of Zalo Pay.

Run by ZION Company Limited, a member of the Viet Nam Banking Association, ZaloPay enables electronic payment for bills such as electricity, water, internet and TV as well as money transfer via QR code and connection with bank accounts for cash withdrawals or recharge.

To date, ZaloPay is accepted at many retail chains such as The Gioi Di Dong, FPT Shop, Vien Thong A, Nguyen Kim, Circle K, Family Mart, 7 Eleven, B’s Mart, Lotte Cinema, Galaxy Cinema, BHD Cinema, Viettravel and Tiki.

Thao said that ZaloPay aims to become a popular e-wallet accepted by e-commerce websites, shopping centres and even small retailers.

During Tet (Lunar New Year) holiday, ZaloPay is implementing a service to send lucky money among users.

Pham Thong, marketing director of Zalo Pay, said that Viet Nam’s mobile payment market had significant potential, given its young population and the popularity of smartphones.

Da Nang licenses two major projects worth US$62.2 million

The Da Nang municipal People’s Committee has granted licences to the East Sea Technology Engineering Electrical Automation Company (ESTEC) to invest in two US$62.2 million projects at Da Nang Hi-Tech Park.

Accordingly, the first project will be a logistics trade and service centre, comprising offices for rent, a logistics depot, a container storage yard, shopping mall, multifunctional sports complex, and a convention hall and hotel complex. The construction process will be divided into three phases and built on an area of more than 9ha at a total cost of VND1,230 billion. The company will begin break ground for the initial phase in the first quarter of this year, which is expected to enter operation in early 2021.

The second project is an ESTEC digital plant spanning an area of nearly 1ha and drawing a total investment capital of VND182 billion. It includes a research and development centre for automation technologies, digital data management, and cloud computing, which are scheduled to come into operation in January 2020.

da nang licenses two major projects worth us$62.2 million hinh 1 The Da Nang Hi-Tech Park has so far lured 10 projects to choose the prime location as a home, with a total investment of more than US$249 million, including three wholly foreign invested projects.

According to Deputy Head of Da Nang Hi-Tech Park Management Board Doan Ngoc Hung Anh, Prime Minister Nguyen Xuan Phuc has signed a decision on incentives for the Park, boding well for its operations this year.

Nafoods and new major shareholder shoot for high growth in 2018

Vietnam-focused activist investment company Endurance Capital Vietnam I Ltd. recently decided to increase its ownership in local partner Nafoods by adding a total of 753,958 shares to its current holding, and thereby becoming the latter’s major shareholder with a total of 5.5 per cent of the shares.

Founded in 1995, privately-held Nafoods is a globally recognised manufacturer and supplier of fruit ingredients for the local food and beverage processing industry.

The transaction, in which Endurance Capital Vietnam I buys shares directly from the family of Nafoods’ chairman Nguyen Manh Hung, took place on February 9 through a put-through transaction at market price.

“We like owner-operated Vietnamese mid-caps that have the potential to triple their value over 3-5 years–we see this potential, and more, in Nafoods,” said Christopher Beselin, chairman and chief investment officer of Endurance Capital Vietnam I. “We have worked closely with Nafooods for 1.5 years and seen many positive changes implemented by the company’s management.

The VND410-billion ($18.6 million) investment into the new and modern factory that is coming online in the first quarter of 2018 is the most obvious one, as it dramatically changes both capacity and production cost.”

“There are also more recent initiatives in Nafoods that we like and which we think hold equally big future profit potential. Vietnam has a great strategic advantage over other countries growing passion fruit and Nafoods has the right integrated-value-chain-oriented strategy to utilise it fully,” he added.

“We are very happy that Endurance Capital Vietnam I has become a major shareholder in Nafoods,” said Nafoods chairman Nguyen Manh Hung. “We think the close co-operation we had with Endurance Capital over the past years has been very fruitful for both the company and its shareholders and I am looking forward to how this even deeper engagement will build even more value going forward.”

“We simply see them as a great partner to have fully onboard when we set off to implement our VND850-billion ($38.6 million) sales and VND85-billion ($3.8 million) net income plan for 2018, as well as for the years to come,” Hung added.

“Nafoods has put in some years of really hard work and is now getting ready to reap the benefits,” said founding partner of Endurance Capital Johan De Geer, who joined Nafood’s Board of Directors in September 2017.

“The projects now underway in R&D for seedlings, fresh fruit technology for faster and bigger sales to Europe as well as continuous organised concentrate sales into the enormous market in China, are of course very exciting to follow,” De Geer said.

“The recent months also meant reaching important milestones, as the first deliveries of Nafoods Fresh Fruit from Son La, Nghe An, and the Central Highlands fulfilling all major European certifications have been exported to Switzerland, France, and the United Kingdom. We think the coming years will be very good for Nafoods!”

Pyn Elite increases holdings in a series of companies

Pyn Elite Fund (Non-Ucits) has announced increasing its holdings in a series of companies where it still holds a partial stake, namely JVC, HBC, CMG, VCG, and CII.

pyn elite increases holdings in a series of companies hinh 0 Notably, on February 5-6, Pyn Elite announced completing the purchase of 924,130 shares in Japan Vietnam Medical Instrument JSC (JVC) and one million shares in Hoa Binh Corporation (HBC) to increase its holding in JVC to 12.38 million (11 per cent) and 22.4 million (17.25 per cent) in HBC, respectively.

Besides, it acquired an additional 347,580 shares in CMC Corporation to increase its holdings to 3.69 million or 5.48 per cent.

On the same day on February 6, Pyn Elite announced buying 1.38 million more shares in Vietnam Construction and Import-Export Joint Stock Corporation (VCG), a subsidiary of Vinaconex to increase its holding in VCG to 23.24 million shares or 5.26 per cent.

Besides, Pyn Elite bought two million shares in Ho Chi Minh Infrastructure Investment JSC (CII) to increase its holding to 27.4 million shares or 11.13 per cent.

According to the shares values of VCG and CII on the stock exchange, Pyn Elite poured VND69 billion ($3.04 million) into CII and VND32 billion ($1.41 million) into VCG, as well as VND64.9 billion into the three other purchase deals.

Previously, in December 2017, PYN Elite Fund signed an agreement to purchase a 4.99 per cent stake in Tien Phong Commercial Joint Stock Bank (TPBank) for $40 million, marking its first investment in the banking sector. This investment was one of the fund’s three largest investments.

Entering Vietnam in 2013, PYN Elite is the third largest foreign-investment fund in the country with a total investment capital of $491.4 million. At present, PYN Elite owns stakes in numerous large-scale domestic enterprises.

Vissan profit rises 12 per cent

Leading food processor Vissan Joint Stock Company reported pre-tax profit of VND165.7 billion ($7.29 million) on revenues of VND3.9 trillion (US$171.78 million) for last year, an increase of 12 per cent and 6 per cent, its general director said.

Last year it produced 25,001 tonnes of pork and beef, up 13 per cent, and 19,009 tonnes of processed products, up 11 per cent.

General director Nguyen Ngoc An said since becoming a joint stock company in July 2016 the company had restructured its business and management in line with market trends.

Vissan targets profits of VND179 billion on sales of VND4.68 trillion this year.

Its fresh meat and processed food output are expected to increase respectively by more than 24 per cent to 31,094 tonnes and 15 per cent to 21,874 tonnes, he said.

The company would focus on research to make new products to offer customers more choices.

For Tet it has stocked up products worth VND650 billion, including 2,900 tonnes of pork, 31 per cent more than for Tet last year, 160 tonnes of beef (12 per cent) and 3,500 tonnes of processed foods (15 per cent).

Besides traditional products like sausages and meat pastes, it has launched many new products for Tet like lean meat paste in banana leaf, smoked pig legs, dried chicken with lemon leaves, many kinds of hot dogs, and shrimp/beef sausage.

From February 8 to 11 Vissan is offering discounts of 15 per cent on fresh pork at all its stores in the south.

Tien Giang attracts nine million USD of investment in early 2018

The Mekong Delta province of Tien Giang has received positive investment signs since the start of this year, said Deputy Director of the provincial Planning and Investment Department Nguyen Dinh Thong.

In early 2018, the province lured two new foreign direct investment (FDI) projects worth nine million USD, comprising a garment-textile company and a steel pipe producing company.

Tien Giang will continue stepping up administrative reform and support businesses in investment law and climate, the official added.

The province is now home to 93 investment projects, including 66 FDI ones with total capital of more than 42.9 trillion VND (1.89 billion USD). Those projects generate jobs for some 83,000 workers while occupancy rate at the provincial industrial parks has hit 64.29 percent.

The industrial production value of firms operating in the province’s industrial parks since the beginning of this year exceeded 5.2 trillion VND (230.83 million USD), up 21.77 percent year-on-year.

Export turnover of those firms exceeded 180 million USD in the period, or an increase of 22.37 percent against the same time last year.

Vietnamese goods win customers’ trust

Vietnamese goods are dominating the domestic market in recent days, thanks to reasonable prices and improved quality.

Tran Thu Trang, a customer from Hanoi, said previously her family often bought imported confectionary, especially those from Europe, despite high prices.

However, this year, her family changed this habit and switched to using more made-in-Vietnam products, not because of the prices but good quality and eye-catching packaging, she added.

More locally-made products are sold at major supermarkets in Hanoi such as Big C, Metro, Hapro and Fivimart than in previous years.

Besides supermarkets, convenience stores are also putting more Vietnamese goods on their shelves.

According to an owner of a convenience store in Hanoi, her store still imports foreign products but in modest quantities, mainly wine and tobacco. Most confectionary and gift packages are made locally.

The increasing presence of Vietnamese products in the market was contributed to the “Vietnamese people prioritise Vietnamese goods” campaign, which was launched in 2009 nationwide to change customers’ attitude toward locally made products while enhancing the competitiveness of domestic enterprises.

Contest for rural youth start-ups launched

The Ho Chi Minh Communist Youth Union (HCM CYU) has recently launched a contest to encourage young people to launch agricultural start-ups.

The contest aims to build start-up spirit among young people, as well as create a favourable climate for rural youth start-ups, especially in high-tech agriculture.

Standing Secretary of the HCM CYU Doan Nguyen An voiced his hope that the contest will attract many contestants across the country, thus helping Vietnamese youths participate in the agricultural sector and drawing more investment from domestic and foreign businesses.

Vietnamese people aged from 18 to 35, with start-up projects in agriculture, including cultivation, animal husbandry, seafood, forestry, preservation and processing industries, among others, are eligible for the contest.

The 60 most outstanding projects will qualify for the next round of the contest called “Building start-up project”. In the second round, contestants will receive training and meet with economic experts and successful entrepreneurs.

The 10 best projects will enter the final round and will feature in newspapers and the HCM CYU’s website.

The contest and awards ceremony are slated for September 2018.

Car sales in January go contrary to usual market situation

Car sales in January 2018 dropped 7 percent from December 2017 but rose by 28 percent from the same period last year to 26,037 units, according to the Vietnam Automobile Manufacturers’ Association (VAMA).

In January, 18,371 passenger cars were sold, up 25 percent month on month, while the sales of commercial and special-purpose vehicles respectively fell 38 percent and 78 percent to 7,363 and 303 units.

Although 20,586 vehicles assembled domestically were sold, up 3 percent, the sales of imported completely built-up units (CBUs) were 5,451 units, down 30 percent from December.

Insiders attributed the sales decline, especially of the CBUs, which was contrary to the usual strong sales growth at the end of a lunar year, to new business conditions relating to the auto market that took effect in the beginning of 2018.

[Auto imports in record drop in January: GSO]

When the import tariff on CBUs hailing from ASEAN countries was reduced to zero percent on January 1, a number of regulations tightening car production, import and business conditions and restricting the import of used cars also came into force.

As a result, prices of both new and used cars imported into Vietnam were augmented considerably, crashing domestic consumers’ expectation of a price nosedive.

Meanwhile, the Government’s Decree 125/2017/ND-CP also cut import tariffs on car components for domestic assembly to zero percent. However, businesses will need some more time to import components at this preferential tariff level, leading to the recent scarcity of domestically assembled vehicles.

Fruit, veggie exports estimated at 321 million USD in January

Vietnam earned some 321 million USD from fruit and vegetable exports in January 2018, rising by 36.9 percent from the same period last year, according to the Ministry of Agriculture and Rural Development (MARD).

China, Japan, the US and the Republic of Korea remained the biggest importers of Vietnamese fruits and vegetables in the month. The markets with soaring imports from Vietnam were Japan (69.3 percent), the United Arab Emirates (56.3 percent), and China (52.4 percent).

Meanwhile, the country imported 152 million USD worth of these commodities in January, of which fruits accounted for 76 percent.

The Ministry said the domestic fruit market saw great fluctuations, with a rise in the price of dragon fruit in the Mekong Delta region.

The trend is expected to continue in the lead-up to the Lunar New Year (Tet) festival.

Prices of star apples and jack fruits also climbed up, reaching 15,000 VND (0.7 USD) and 43,000 VND (1.9 USD) per kg due to increasing demand for these two products in the US and China, respectively.

Meanwhile, orange prices in the Mekong Delta region fell dramatically due to abundant supply and the crops face diseases.

Prices of several vegetables also dropped in the Central Highlands province of Lam Dong due to high supply fueled by favourable weather.

Insurance books should not be used as collateral

Lawmakers, lawyers and leaders from Vietnam Social Security (VSS), a State agency in charge of the country’s social insurance programme, have all advised against the practice of using social insurance books as collateral by banks, credit institutions and small loan businesses at a conference last week on the subject.

The experts cited numerous legal issues and the high risk associated with the practice, which has frequently been reported since last year, especially among workers in industrial zones.

The country’s new Social Insurance Law, which came into effect in 2016, allowed workers to hold their own social insurance books. The move was a drastic departure from an earlier version of the law which made employers the responsible party for keeping the books.

Lawmakers were prompted to change the regulation after several problems surfaced, including soaring social insurance debt and even fraud in some cases due to a lack of awareness among workers regarding their own rights as well as their inability to keep track of their employers’ social insurance payments made on their behalf.

Giving workers their social insurance books helped eliminate the above-mentioned problems, keep workers informed of their status and progress, and save employers’ time and expenses in keeping a record of workers’ insurance files, said deputy director of VSS, Trần Đình Liệu

“Due diligence was taken by social insurance agencies and employers to ensure the books, when handed to workers for safe-keeping, were up-to-date and complete,” Liệu said.

More cases are being reported in which books are taken to commercial banks and used as collateral. The VSS branch office in the south-central province of Phú Yên even notified VSS head office that they had received requests from the banks to co-operate with legal proceedings in such cases.

“As of this moment, there are no laws that prohibit the use of those books as collateral. There are also no laws that require VSS to comply with such requests from the banks. An official ban on this practice must be in place to stop these high-risk transactions,” said lawyer Trương Thanh Đức.

Liệu said that while these transactions are of a civil nature and not prohibited, social insurance payouts would only be made to workers who managed to meet all requirements of their insurance scheme.

“VSS will not authorise payouts to be made to the banks. It’s entirely their responsibility and their risk if they choose to proceed with such transactions,” said the deputy director, “We (VSS) have informed and advised commercial banks, credit institutions and small loan businesses against taking the books as collateral.”

There have been cases of workers, after using their books as collateral to take out loans, reporting them as missing and requesting replacements. VSS offices were told to refuse such requests.

Experts at the conference also pointed out that there is currently no acceptable method to determine the monetary value of social insurance books. In the event that the books’ owner dies, they will be invalidated and can’t be cashed in. Furthermore, the use of those books as collateral defeats the country’s social insurance scheme’s mission: to mitigate the adverse effects of undesirable events that may happen to the insured such as sickness and unemployment.

Danang Hi-Tech Park receives $62 million investment

The management board of Danang Hi-tech Park (DHTP) has just granted the investment certificates to two projects: a commerce-logistics services centre in DHTP and ESTEC Digital Factory, representing total investment of over $62 million.

The project to build a commerce-logistics services centre in DHTP will be carried out by Southeastern Asia High-Tech Logistics JSC over the area of 9.2 hectares. The centre will be built at H1 plot in the area of logistics and services for DHTP, with total investment of VND1.230 trillion ($54.19 million) over three stages.

The first stage of this project will focus on completing blocks of offices for lease, logistics warehouses, and container yards. The next stage is to build distinct zones for diverse purposes, including commerce-supermarket, food court-display, and recreation combined with multi-sports facilities, as well as fuel stations. In the third stage, a convention centre and hotel complex will be established.

According to the scheme, the construction for the first stage will start in the second quarter of 2018 and come into operation in early 2021.

Meanwhile, East Sea Technology Engineering Electrical Automation will be the lead investor of the project to build a digital factory at the A14 plot—the hi-tech manufacturing area in DHTP—over a total area of 0.982ha. The project is supposed to receive total investment of around VND182 billion ($8 million) and is to be carried out in two stages.

In the first stage, the investor will establish a centre for research and automation and hi-tech development, a centre for implementing and providing solutions, products, and services in line with the 4.0 Industrial Revolution, as well as a centre for automation and hi-tech training.

The second stage of the project will concentrate on expanding the hi-tech research centres, carrying out projects and training courses on creating and manipulating digital statistics. The investor committed to implement the first stage in early 2018 and officially put the project into operation in January 2020.

According to the management board, Danang Hi-Tech Park has attracted about ten projects so far with the total registered investment of over $249 million over 34.6ha. Among these ten projects, three are 100-per cent financed from Japanese investors.

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