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Habeco's price needs careful calculations

Released at: 08:40, 29/11/2016

Habeco's price needs careful calculations

Photo: Duc Anh

Securities firms tell VET what they believe brewer's share price should be as Carlsberg sale nears.

by Duy Anh

The share price of the Hanoi Beer Alcohol Beverage Corporation (Habeco) should be calculated carefully and based on a number of factors, several securities firms in Vietnam have said.

The price could be much higher than the VND48,000 ($2.11) mooted after a negotiation session on October 31 between Habeco and Danish brewer Carlsberg, which is ongoing.

“The eventual price of Habeco needs to be referenced with the book value of the Hanoi-based brewer and other companies within the beverage sector,” Mr. Nguyen Kim Cuong, stock analyst at Dong A Securities Company, told VET.

Carlsberg reportedly agreed to buy Habeco share at a price of VND48,000 ($2.11) during the session with Habeco and officials from the Ministry of Industry and Trade (MoIT). CEO Mr. Tayfun Uner was quoted by Bloomberg as saying that the Danish giant could buy at a price of VND50,015 ($2.2); the price it paid in 2008 to become a strategic shareholder by securing 16.07 per cent, increasing its holding to 17.51 per cent afterwards.

A stock analyst at Maritime Securities Incorporation (MSI) told VET that the negotiated price largely depends on the price that Carlsberg wants. “The eventual price might be lower than the current market value, and if Carlsberg only agrees to pay that much the government will perhaps agree to sell a large number of shares at that price,” he said.

In remarks released on November 17, the Ho Chi Minh City-headquartered Viet Capital Securities Company (VCSC) believes that a “reasonable” price for Habeco shares is VND59,600 ($2.62).

Its calculations are based on a narrow market segment, weak product portfolios, Habeco’s absence in high-end segments and less attractive financial statements and return on equity (ROE) than the Saigon Beer Alcohol Beverage Corporation (Sabeco).

Habeco, which the government is keen to divest from in 2016-2017 and plans to sell its 82 per cent stake, has been listed on the UPCoM market since October 28 with 231.8 million shares, equal to a 0.7 per cent stake.

Habeco shares have been around VND106,200 ($4.67) over recent weeks, according to the Hanoi Stock Exchange (HNX), which manages UPCoM. Its valuation was reported at $404 million in August.

With a current holding of 17.51 per cent in Habeco, Carlsberg has offered to split the sale of State capital in Habeco into two blocks, with the Danish brewer proposing it participate in both.

In Block A, Carlsberg holds first right of refusal for the sale and wishes to purchase a 61.79 per cent stake. In Block B, it plans to also bid for another 20 per cent that the government will sell at auction. An agreement over price is yet to be reached.

Sales of Habeco’s products were down 1.3 per cent year-on-year in the first six months. After-tax profit fell 35 per cent year-on-year.

Habeco and Sabeco are Vietnam’s two largest beverage producers. Sabeco was the largest beer brewer last year, reporting production of 1.38 billion liters. The No. 2 position was taken from Habeco by Heineken.

Vietnamese drinkers are expected to consume more than 4.04 billion liters of beer this year, the most in Southeast Asia and up from 3.88 billion liters in 2015, according to Euromonitor International. Habeco is planning to list on the Ho Chi Minh City Stock Exchange (HoSE). Sabeco will list on HoSE on December 6 at a price of VND110,000 ($4.84).

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