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Sabeco to debut on HOSE on Dec 6

Released at: 08:30, 02/12/2016

Sabeco to debut on HOSE on Dec 6

Photo: Duc Anh

Aside from higher profits its listing will also bring transparency.

by Duy Anh-Quynh Nguyen

The Ho Chi Minh City's Stock Exchange (HOSE) said it approved the listing of 641.2 million shares of The Saigon Beer Alcohol and Beverage Corporation (Sabeco) starting from December 6.

Sabeco shares would be available for trading under the code SAB on December 6, some days earlier than the previous schedule of December 12.

With a starting price of VND110,000 ($4.9) per share, Sabeco’s market capitalization will reach VND70.5 trillion ($3.1 billion), making it the fifth largest listed firm on Vietnam’s stock market behind dairy firm Vinamilk (VNM), PetroVietnam Gas Corp (GAS), Vietcombank (VCB) and property developer Vingroup JSC (VIC).

When Vietnam’s largest beer maker debuts on HOSE, the listing will bring more than just an all time high profit. “Sabeco is expecting its annual profit for 2016 to be some VND5 trillion ($220.6 million),” Mr. Nguyen Hoang Hai, General Secretary of the Vietnam Association of Financial Investors (VAFI) told VET.

During the first nine months of 2016, Sabeco had already met its annual goal, reporting an after-tax profit of VND3.65 trillion ($161 million). Such robust growth this year is quite an achievement, especially at this stage.

The State currently holds 89.6 per cent of Sabeco’s charter capital, which is worth an estimated $1.8 billion, and plans to divest it in two phases. The first tranche of stake sale will be 53.6 per cent of its ownership and will be conducted by the end of this year after the company is listed. The remaining 36 per cent will be transferred next year.

Foreign brewers from Europe and Asia, such as Japan’s Kirin Holdings and Asahi Group Holdings, Thai Beverage, and Heineken, had previously expressed an interest in the stake sale.

However, the sudden increase in Sabeco’s profit, especially prior to its listing, is “strange.” Growth of Sabeco’s annual profit was always at a consistent pace during previous years. In 2014 and 2015, Sabeco recorded an after-tax profit of VND3.05 trillion ($134.5 million) and VND3.6 trillion ($139 million) respectively.

The annual profit of Sabeco grew at a rate of 22 per cent from 2013-2014 and at a rate of 18 per cent from 2014-2015. For 2016 profit is expected to be around VND5 trillion ($220.6 million) making the growth rate 39 per cent which is surprisingly high.

According to VAFI's Mr. Hai, this sudden figure could only have been reached because of its upcoming listing. “During the previous years,” he said, “information was not disclosed and no one could ensure that financial reporting was up to standard".

“The listing brings more than just a sudden increase in profit, but also transparency,” Mr. Hai said. “From now on, the State’s profit will no longer get into the pockets of advocacy groups and other managing authorities”.

Lack of transparency has been a problem for Sabeco. The company has been fined VND100 million ($4,406) by the State Securities Commission (SSC) for not publishing company information, in compliance with the law, on their websites such as the company’s 2014 and 2015 managerial reports, annual reports and the company’s charters.

Having a 40 per cent market share, Sabeco is leading the domestic market. Others are Heineken with 20 per cent and Hanoi Beer Alcohol and Beverage Corporation (Habeco) with 20 per cent.

Source: Vietnam Beer Alcohol Beverage Association

 

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