23:14 (GMT +7) - Tuesday 20/03/2018

Banking & Finance

Vinatex to trade on UPCoM

Released at: 08:52, 28/12/2016

Vinatex to trade on UPCoM

Photo: Vinatex HCMC

Vietnam National Textile & Garment Group to list 500 million shares when it joins UPCoM on January 3.

by Quynh Nguyen

The Vietnam National Textile & Garment Group (Vinatex) will trade on the Unlisted Public Company (UPCoM) market from January 3 under the code VGT, with over 500 million shares and registered stock value of more than VND5 trillion ($220 million) with a starting price of VND10,000 ($0.45) per share.

Vinatex’s business performance this year fell short of expectations. Industrial production value increased just 3 per cent, to VND37.7 trillion ($1.65 billion), while export turnover of VND2.47 trillion ($108.6 million) was up 4 per cent year-on-year.

Total revenue reached VND40.5 billion ($1.78 million), up just 3 per cent year-on-year, and pre-tax profit stood at VND1.43 trillion ($62.9 million), up 9 per cent. Main markets such as the US, Japan, and South Korea saw single-digit growth.

Mr. Le Tien Truong, CEO of Vinatex, told VET that the group targets maintaining growth of 13 to 15 per cent in 2017, with exports of $4 billion.

In November the textile giant announced the transfer of 11.8 million shares in the Hanoi Textile and Garment JSC (Hanosimex) to the recently-established Northern Corporation (VNC Corp), to contribute capital to the new company.

The number of shares transferred is equivalent to 57.5 per cent of Hanosimex’s charter capital, meaning Vinatex is no longer its major shareholder.

Vietnam’s textile and garment exports have failed to reach the targeted $29 billion in export turnover set for this year. The sector was to be a major beneficiary of the TPP but the future of the trade deal is now uncertain. This has raised concerns among some enterprises but many others believe that they will benefit with or without the TPP.

Export turnover is estimated at $28.5 billion for this year, up 5.4 per cent against 2015, according to Mr. Truong, but short of the $29 billion target, which was previously $30-$31 billion. “Growth is at its lowest since 2010,” Mr. Truong told VET. “But growth in absolute value was higher than in previous years.”

The decline stems from difficulties in global markets. Total global demand in 2016 did not increase and key markets for Vietnam’s major imports fell: in the US by 4.5 per cent and the EU 3 per cent, while only Japan increased more than 1 per cent.

Despite the uncertain future of the TPP, Mr. Truong still believes that even without the trade deal Vietnam’s textile exports are on track. “Vietnam also has other free trade agreements with the EU, South Korea and Japan, which are expected to bring benefits to textile and garment enterprises,” he said.

User comment (0)

Send comment