BUSINESS NEWS 26/7

S.Korea’s KOGAS, US Energy Capital Vietnam to build 3,200-MW-LNG power plant in Vietnam

BUSINESS NEWS 26/7

Korea Gas Corporation (KOGAS) and Energy Capital Vietnam (ECV) have entered into a Memorandum of Understanding (MOU) that provides the framework for the development of a privately-funded LNG regasification terminal, storage, gas supply system and 3,200 MW gas-fired power project near Mui Ke Ga, Binh Thuan province, Vietnam.

The MOU contemplates KOGAS and ECV working together to optimize their efforts to meet the significant LNG demand growth forecasted for Vietnam. The scope of the MOU covers matters relating to cooperation and collaboration for the project.

Commenting on the MOU, David Lewis, CEO of ECV, said KOGAS' strong presence in the LNG business together with ECV's position as one of the first LNG movers in Vietnam, allows both companies to leverage each other's strengths to bring low-cost LNG to Vietnam and help address critical energy security needs.

“Underpinned by positive demographics, wide spread liberalization and record inflows of foreign direct investment, Vietnam has been one of the fastest growing economies in the world,” ECV’s website reads. “While GDP has doubled since 2010, the currency has been stable against the US dollar and inflation has remained below 5% and unemployment below 2.5% for the past five years. In 2018 inflation was under 3.5%and GDP was over 7%.”

The US is becoming a net exporter of energy over the coming years, elevated by the shale revolution in natural gas drilling. Several Gulf Coast LNG terminals will ship the fuel around the world, helping meet power generation needs in Europe and Asia, among other destinations.

A team from international law firm Akin Gump advised ECV in the MOU negotiations. The Akin Gump team was led by energy partner Gabe Procaccini in Houston.

SSI reports $10.27m profit in second quarter

SSI Securities Corporation reported pre-tax profits of VND239.2 billion (US$10.27 million) on revenues of VND743.5 billion ($31.9 million) in the second quarter of the year.

Capital and financial trading activities remained highly lucrative, with revenues rising by 52 per cent year-on-year to VND265.78 billion.

The company remains the broking leader on HOSE for a sixth straight year with a 13.15 per cent market share and on the Ha Noi Stock Exchange with a 11.11 per cent share.

First half revenue and pre-tax profit were VND1.5 trillion and VND510 billion, lower than expected but not too bad considering the market situation.

In the second quarter the market continued to remain volatile as the VN-Index subsided by 3.14 per cent from the end of the first quarter. Liquidity was down 40 per cent, with total trading value falling to VND4.325 trillion.

Foreign investors sold stocks worth VND921 billion on HOSE in contrast to their net buying of VND2.22 trillion in the previous quarter.

The reduced liquidity was the main reason for a significant reduction in brokerage, margin lending and cash advance transactions compared to a year earlier, the company said.

But, despite falling short of first half targets, “The Board of Directors of SSI does not intend to adjust the business plan for 2019,” Nguyen Duy Hung, SSI chairman and general director, said.

With the steady growth reported by leading local businesses, the EU-Viet Nam free trade agreement opening opportunities for export to the EU, the return of foreign capital, and the country’s steady economic growth, SSI said the market would recover in the second half of the year.

Vietnam eyes top 4 ASEAN countries in digital transformation index

Viet Nam expects to be in the top 4 ASEAN countries in terms of digital transformation index by 2025, according to a draft national digital transformation project developed by the Ministry of Information and Communications (MoIC).

The draft project, which will be submitted to the Government this year at the request of Prime Minister Nguyen Xuan Phuc, covers three stages of digital transformation from now to 2030.

In the first stage, the MoIC plans to focus on fundamental infrastructure development, legal framework building, supporting businesses to carry out digital transformation, developing digital startups and human resources for digital transformation.

In the second stage, the MoIC will focus on improving competitiveness of the economy through deployment of new integrated digital ecosystems.

For the next stage, Viet Nam will work towards digital economy and society and develop new-generation digital industries, which will be fresh driving force for economic growth.

The draft project also sets goal to turn Viet Nam into one of the top producers of electronic and telecom equipment and one of the top exporters of software in the world.

HCM City industrial production slows down

HCM City’s industrial production grew by 7 per cent in the first half of the year, almost exactly the same as a year ago, according to the city Department of Industry and Trade.

However, the index of industrial production (IIP) of the city’s four key sectors, food processing, chemical-rubber-plastics, mechanics, and electronics, saw an increase of 5.5 per cent, much lower than the 9.5 per cent growth achieved in the same period of 2018.

Speaking at a meeting to review the city’s industrial and trading sectors on July 22, Tran Anh Hao, head of the department’s industrial management division, said of the four key sectors, the electronics sector saw the highest growth rate of 28.3 per cent.

The mechanical sector was up 3 per cent, while the food processing sector shrunk by 2.6 per cent as against 10.7 per cent growth the previous year.

Hao attributed the decline in the food and foodstuff sector to the fact that some large companies had been shifting their plants to neighbouring provinces, which were offering competitive land rentals and other incentives.

"With land prices in the city being higher than in neighbouring provinces, businesses tend to move out some of their labour-intensive production, only keeping high value-added production here," he explained.

“There is no shortage of land in the city’s industrial parks, but the plots range from 5ha to 10ha. So those businesses that need 30-40ha for their factories find it hard to find land in the city.”

Another factor affecting the sector is the African swine fever epidemic, which has hit demand for meat products.

This year the department planned to organise fairs to help enterprises promote consumption of their products, he said.

Its officials would regularly meet with industry executives to address their difficulties in a timely manner.

The city government had instructed the HCM City Export Processing and Industrial Zones Authority to get 400ha of land ready to attract investment in priority sectors.

Nguyen Nguyen Phuong, head of the department’s trading management division, said retail sales of goods and services in the city in the first half were worth an estimated VND574.98 trillion (US$24.75 million), an increase of 12.7 per cent year-on-year.

Sales through modern channels were increasing and now accounted for 25-30 per cent of the city’s total retail sales, higher than the national average of 20-25 per cent, he said.

Steady economic growth, increasing per capita income and customers’ trust in the modern trade channel’s quality management were among the factors boosting supermarkets’ sales, he said.

The city has 239 traditional markets, 205 supermarkets, 46 shopping malls, and 2,360 convenience stores.

Foreign investors get dual benefits from Vietnam’s new FTAs

Vietnam’s new-generation free trade agreements, the EU-Vietnam Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), have helped Vietnam-based foreign firms benefit both market entry and tax policy incentives, experts said.

According to Dr. Hoang Van Cuong, vice rector of the National Economics University, as for investors from the EU and CPTPP countries, they will enjoy huge benefits of both the market and domestic preferential policies when investing in Vietnam.

The EVFTA alone will eliminate over 99 percent of tariffs, with the EU eliminating duties on thousands of items sourced from Vietnam. Meanwhile, Vietnam will liberalize 65 percent of import duties on EU exports to Vietnam, with the remainder of duties being gradually eliminated over a 10-year period.

The EVFTA will benefit EU businesses exporting and investing in Vietnam, Siemens Vietnam president and CEO Pham Thai Lai said, adding the EVFTA is a great foundation to further boost trade, attract more investment, create more jobs and foster sustainable development between the EU and Vietnam.

Lai forecast a robust investment inflow from the EU to Vietnam and a substantial increase in exports from Vietnam to the EU in the coming years as a result of the removal of over 99 percent of tariffs on goods traded between the two economies.

In another case, Svante Magnusson, owner of Swedish glove-maker Hestra Company, said the EVFTA will give EU investors something like a helping hand, adding the company would look to invest in a new factory in Vietnam with 200-400 employees, alongside its current factory.

Hestra, which exports its gloves to over 30 countries worldwide, will benefit from the removal of EU tariffs on gloves of up to 9 percent. This will make it easier for Hestra to export its products to the EU.

The agreement’s new rules of origin will make it easier to trade products tariff-free when they include inputs from other countries the EU has trade agreements with. This will benefit textile producers, as well as the likes of Hestra. The company exports textiles and wool from the EU to its factory in Vietnam. With the trade agreement, the products can then be shipped to the EU tariff free.

Besides, Deputy Minister of Planning and Investment Vu Dai Thang said that with the EVFTA, European corporations will have a chance to penetrate the ASEAN market and those of the members of the CPTPP.

Especially, stringent rules of origin prescribed by the EVFTA will act as a major factor that assists in wooing foreign investors from countries, which haven’t signed agreements with the EU, to set up their production bases in Vietnam and further boosting their exports to the EU markets.

These businesses will benefit from incentive policies agreed between Vietnam and the EU in the EVFTA, said Cuong from the National Economics University.

In fact, many Japanese enterprises have expressed their intention to invest in Vietnam, and are interested in trade opportunities resulted from the free trade pacts to which Vietnam is a party. A case in point is Toray Industries which wants to get involved in Vietnam’s weaving sector with a modern and complete industrial complex. As for Sumitomo group, besides smart city development, they want to jump into Vietnamese fintech segment.

A Japan External Trade Organization (JETRO)’s recent survey also showed that more than 70 percent Japanese businesses have expressed their desire to expand business in Vietnam to take advantage of the trade pacts.

Hong Kong fund introduces MSCI Vietnam ETF

Hong Kong-based investment firm Premia Partners, one of the top 8 exchange trade fund (ETF) issuers in Hong Kong, has announced the listing of Premia MSCI Vietnam ETF to seek investment opportunities in Vietnam.

Premia MSCI Vietnam ETF tracks the MSCI Vietnam Index, which aims to capture leading large and mid-cap Vietnam-based companies that represent 85 percent of market capitalisation in Vietnam.

The index is dominated by the real estate (45.5 percent) and consumer staples (30.2 percent) sectors and comprises 16 constituents, most notably property developer Vingroup (22.0 percent) and Vinhomes (12.7 percent), and dairy producer Vinamilk (17.8 percent).

Compared to other ETFs currently operating in Vietnam’s stock market, Premia MSCI Vietnam ETF remains modest with fund size of 21 million USD.

Premia MSCI Vietnam ETF's portfolio has 16 stocks, including property developers Vingroup (VIC) (20.94 percent), Vinhomes (VHM) (12.63 percent) and Vincom Retail (VRE) (7.84 percent), dairy producer Vinamilk (VNM) (17.01 percent), Masan Group (MSN) (7.64 percent), new generation carrier Vietjet (VJC) (4.97 percent), brewer Sabeco (SAB) (4.31 percent), Vietcombank (VCB) (3.99 percent), PetroVietnam Power Corporation (POW) (1.54 percent), PetroVietnam Gas Corp (GAS) (1.47 percent), Bank for Investment and Development of Vietnam (BID) (1.39 percent) and the Vietnam National Petroleum Group (PLX) (1.17 percent).

Currently, there are a number of investment funds in Vietnam tracking the MSCI indexes, such as MSCI Frontier Markets Index and MSCI Frontier Markets 100 Index. Notable names include iShares MSCI Frontier 100 ETF with over 500 million USD in funding, and Schroder ISF Frontier Markets Equity with 1 billion USD, among others.

The launch of Premia MSCI Vietnam ETF facilitates investors with efficient market access and liquidity management tools as they position for opportunities amid market uncertainties, global supply chain reconfiguration, and new trade pacts including CPTPP and EVFTA with Vietnam.

VietJet Air, Masan purchase Viet Capital shares

Viet Capital Securities Joint Stock Company (VCSC) has announced the results of its bond issuance.

Accordingly, Vietjet Aviation Joint Stock Company and food and beverage Masan Group spent nearly 400 billion VND (17.17 million USD) to own VCSC's non-convertible bonds in the recent issuance of bonds worth 500 billion VND.

Specifically, Vietjet bought 70 percent of the bonds for 350 billion VND. Masan spent 37 billion VND owning 7 percent of issued bonds of Viet Capital Securities.

In addition, domestic investors purchased VCSC’s bonds worth 103 billion VND, equivalent to 21 percent and foreign investors bought the remaining 10 billion VND, equivalent to 2 percent.

All of 50,000 VCSC’s bonds (par value of 10 million VND per bond) are registered, non-convertible, two-year bonds with nominal interest rates and actual issuing interest rates in the range of 6-8.2 percent per year.

In the second quarter of 2019, VCSC ranked third with 9.37 percent market share in the top 10 securities companies with the largest brokerage market share on the Ho Chi Minh Stock Exchange (HoSE).

Generally, for the first six months of 2019, VCSC ranked third with 9.71 percent market share of stock and fund certificates.

This year, VCSC targets revenue of 1.65 trillion VND and net profit of 680 billion VND, a year-on-year decrease of 17 percent.

However, at the end of the first quarter of 2019, VCSC's revenue decreased by 35 percent over the same period to reach 371.48 billion VND and after-tax profit decreased by 39 percent over the same period to 202.5 billion VND.

Commercial banks recorded strong growth in first half of 2019

A number of commercial banks have disclosed positive results for the first six months of 2019.

State-owned giant Vietcombank saw its pre-tax profit go up by 41 per cent year-on-year, reaching VND11 trillion ($478.26 million). This surpasses the bank’s goals and cements its position as the most dominant lender in Vietnam.

Vietcombank’s shareholders are now looking forward to the remainder of 2019, as the annual goal of VND20.5 trillion ($891.30 million) in pre-tax profit is likely within reach.

Asia Commercial Bank, which is among the ten banks earmarked for Basel II, and HDBank also reported some outstanding results. Specifically, ACB’s pre-tax profit was VND3.6 trillion ($156.52 million), which is half of the yearly goal. It has asked the State Bank of Vietnam to raise the credit growth limit from 13 to 17 per cent for 2019, which is testament to the bank’s expansion in credit activities.

HDBank expected half-year earnings to reach VND2.2 trillion ($95.65 million), with 1.7 per cent return on assets and 20 per cent of returns on equity. Outstanding credit is at VND144 trillion ($6.26 billion) and bad debts were controlled at under 1 per cent. The consolidated net interest margin at HDBank went up to 4.4 per cent, which is the highest among all commercial banks that have released their earnings.

Other lenders such as Vietnam International Bank, TPBank or Sacombank also reported good income, placing in the “trillion VND” group. VIB, for example, saw its pre-tax profit increase by 58 per cent year-on-year, ending June at VND1.8 trillion ($78.26 million). The bank prides itself on being a leader in bancassurance (partnership with insurance firms) and credit card growth.

At the same time, TPBank earned VND1.6 trillion ($69.57 million) of pre-tax profit, also up 58 per cent year-on-year, and Sacombank reaped VND1.45 trillion ($63.04 million).

Market observers are now waiting for other commercial banks to announce their business results for the first half of 2019.

VTVCab approved to trade on UPCoM

The Hanoi Stock Exchange (HNX) decided to approve Vietnam Television Cable Corporation (VTVCab) to register to trade 45.7 million shares on the UPCoM with the code CAB.

In April 2018, while implementing its equitisation, VTVCab issued over 42 million shares for its initial public offering (IPO) at the starting price of VND140,900 ($6.13) per share. The number of shares brought to auction accounted for 47.8 per cent of VTVCab's expected charter capital after equitisation. However, VTVCab's IPO was not successful as only one investor registered a bid.

In June 2018 VTVCab officially began operating as a joint stock company with the charter capital of VND457.5 billion ($19.89 million), equivalent to 45.74 million shares registered for trading, 664,800 shares of which were sold at a preferential price to company employees. Since the equitisation, VTVCab has yet to increase its charter capital.

Regarding shareholder structure, after equitisation, Vietnam Television (VTV) is the parent company holding 98.55 per cent of VTVCab, which currently operates in the field of paid television services, wired telecommunications activities, and advertising with 35 dependent branches and 18 co-operative branches operated by VTVCab throughout the country.

Besides, VTVCab also has a number of member companies such as Viet Thanh Technology JSC (51 per cent owned), VTVLife JSC (51 per cent), VTVCab Sports Development JSC (50.1 per cent), and VTVCab Nam Dinh (39 per cent), among others.

In addition, VTVCab is currently managing and using many land plots such as the 69.7sq.m plot at 89 Giang Van Minh, 50-year land-use right for a more than 1,000sq.m plot in 12D Nguyen Tat Thanh, Viet Tri, long-term land-use rights of 93sq.m in Gieng Nam, Cam Lam, Khanh Hoa.

Regarding business results, consolidated revenue in 2018 reached VND2.949 trillion ($128.22 million) and pre-tax profit was VND74.3 billion ($3.23 million). VTVCab forecast a 2019 revenue of VND3.5 trillion ($152.17 million) and strives to reach VND4.5 trillion ($195.65 million) by 2022. Pre-tax profit in 2019 is expected to reach VND81.2 billion ($3.53 million) and reach VND282.5 billion ($12.28 million) by 2022.

Particularly in the first quarter of 2019, VTVCab achieved more than VND501 billion ($21.78 million) in revenue and over VND7.3 billion ($317,400) in after-tax profit, far from the target set for the whole year.

ACV proposes $100 million investment into Na San Airport

Airport Corporation of Vietnam wants to use its equity capital to rebuild the old domestic Na San Airport located in the northern mountainous province of Son La with the investment capital of VND2.3 trillion ($100 million).

ACV has submitted the pre-feasibility report for the reconstruction of Na San Airport to the Ministry of Transport for appraisal. In the report, ACV proposed three plans for the project. The first one is that the corporation will develop this project from its equity capital. The second one is that the corporation will build the civil aviation zone while the Son La People’s Committee can develop the flight zone and then assign ACV to exploit it. The third one is to mobilise investment from private enterprises under the public-private partnership (PPP) model.

According to ACV, the first plan is the most feasible alternative because the corporation has massive experience in this sector. Besides, it can allocate revenue from its existing 22 terminals to offset the operating losses of Na San Airport before it begins to generate profit. Under this scheme, ACV committed to completing the construction within 37 months.

The construction of the plan is estimated at VND2.29 trillion ($99.56 million), VND62.8 billion ($2.73 million) of which will be spent on land clearance, VND1.16 trillion ($50.43 million) on the construction of the flight zone, and VND878.6 trillion ($38.2 million) for the civil aviation zone and other expenditures.

This airport will handle 1 million passengers per year and will include a terminal, an office building, a flight zone, and related infrastructure. Besides, the investor will build a transport system to link the terminal with Highway No.6.

Na San Airport was constructed in 1950 years by the French. It lies 187 kilometres from Hanoi’s Noi Bai International Airport and 110km from Dien Bien Phu Airport in the northwestern Dien Bien province. It was considered to have an important role in ensuring national security and the economic development of Son La and the northwest region.

During 1978-2004, a number of the airport's components were upgraded in order to ensure safe flights. In 2004, the operation of the airport was suspended as the airport was found to be too rundown.

Vietnam’s car imports shoot up in first half of 2019

Vietnam imported 75,437 completely built (CBU) cars worth a total of US$1.72 billion in the first six months of 2019, up six times in number and five times in value compared with the same period of last year.

Tax revenues from CBU cars were estimated at US$922 million, up 424.77% year on year, according to data released by the General Department of Customs.

In June, Thailand was Vietnam’s largest car import market, with 7,575 units, followed by Indonesia with 1,468 and China with 653. The country also imported 274 cars from the Republic of Korea and 150 from Japan.

The number of vehicles from these five markets accounted for 96% of Vietnam’s total car imports during the month.

Data showed that Vietnam imported 7,145 cars with nine seats or less in June, accounting for 67.8% of its total automobile imports, with prices of those imported from Thailand and Indonesia at around US$19,200.

June also saw Vietnam purchase US$291 million worth of spare car parts, compared with US$357 million recorded in the previous month.

Vietnamese spare car parts imports mainly came from the Republic of Korea, Japan, Thailand, China, Indonesia and Germany.

Measures deployed to lure more investment to agriculture

The Government has issued a resolution detailing measures to encourage businesses investing in safe, effective and sustainable agricultural development.

The resolution targets modern and sustainable growth of the agricultural sector towards large-scale production and stronger application of science and technology to improve productivity and products’ quality in 2030, thus enhancing the sector’s competitiveness and farmers’ income.

In 2030, the sector is expected to become one of the world’s top 15, while agricultural processing is hoped to enter world’s top 10.

Vietnam will strive to become a global hub for intensive processing of agricultural products, and a logistics centre of the world’s farm produce trading system, according to the resolution.

It clarifies that in 2030, Vietnam expects about 3 percent growth in agro-forestry-fishery production value annually, and 6-8 percent expansion in the export of the products.

About 80,000-100,000 businesses are expected to invest in agricultural sector, including up to 4,000 large firms and 6,000-8,000 medium-sized enterprises.

To this end, the resolution roles out a number of measures such as continuing to complete constitution and reforming administrative procedures, cutting down business conditions in agriculture, and creating attraction for the sector to lure more investment.

Vietnam will expand agricultural production, processing and selling to match the market’s demand as well as growth strategy of the sector, while reforming mechanisms to support enterprises to seek markets, stated the resolution.

 

The country will also complete credit policies for agricultural projects to encourage more investment in the field, it said.

Domestic industry needs technology transfer

Vietnamese enterprises need more opportunities to get technology transfers from foreign investment activities and join ventures with foreign partners for sustainable development of the domestic industry.

Technology is important in improving global competitiveness for local manufacturers in Vi?t Nam, said BT Tee, general director of Informa Market Vi?t Nam.

The domestic industrial sector, which contributes 50 per cent of national GDP, has a strategic position in the sustainable development of the domestic economy and attraction of foreign investment.

Local enterprises must actively improve production scale and technology and connect with professional partners to develop the industry and participate in the global supply chain, said BT Tee.

To do this, some experts said local enterprises must overcome challenges in using data management systems. Vi?t Nam’s industrial sector and domestic enterprises face many difficulties in digitising and connecting data of enterprises as well as applying technology and smart machines in production lines.

With the development of Industry 4.0 and globalisation, local businesses need to actively take advantage of opportunities to increase competitiveness, according to the experts.

The global free trade market requires domestic enterprises to invest in research and production of smart machines that are capable of competing in many markets but not just meeting demand in the domestic market.

According to the Japan Trade Promotion Organisation (JETRO)’s branch in HCM City, foreign direct investment (FDI) from Japan to Vi?t Nam has increased significantly year by year, showing that the Japanese business community have always appreciated the Vi?t Nam market and strived to seek opportunities for cooperation with Vietnamese enterprises, reported the Vietnam News Agency.

For the industrial sector, Japanese enterprises have advantages in equipment and machinery with modern production technology to increase productivity and reduce costs.

With entry into free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) or the Vietnam-EU Free Trade Agreement (EVFTA), Vi?t Nam is a potential market for foreign businesses in almost all fields.

According to Marko Walde, Chief Representative of the Association of German Chambers of Commerce and Industry (AHK) in Vi?t Nam, the association wishes to connect businesses of the two countries, helping Vietnamese enterprises approach to new technologies and solutions in the manufacturing industry.

It will also help Vi?t Nam improve its competitiveness and sustainable development as well as support businesses in meeting the regulations of Vi?t Nam’s Government and the needs of modernising machinery and production lines for development of the domestic support industry.

Walde said for the manufacturing industry, effective exploitation of investment promotion channels and attraction of foreign capital is a challenge for both management agencies, as well as the business community.

According to the Ministry of Industry and Trade, the important issue for the domestic industry sector at present is to improve the low technical and technological level of enterprises. Statistics show that 59.6 per cent of local enterprises use outdated technology and only 2 per cent use high technology for production.

According to Vi?t Nam's industrial development strategy up to 2025, Vi?t Nam's industry will be more competitive and use modern technology, participate in global value chains in a number of specialties and fields as well as meet the basic requirements of the economy and export activities.

In addition, the Vietnamese mechanical industry is also oriented to develop with advanced technology, international quality products and deeper participation in the global value chain.

PAN Group offers to buy over 7.7 million Bibica shares

Vietnamese agriculture and food company PAN Group Joint Stock Company (PAN) has just offered to buy more than 7.7 million shares of Bibica Corporation, one of the leading confectionery businesses in Viet Nam.

The shares are equivalent to 49.93 per cent of Bibica's outstanding voting shares. The expected bid price is VND68,500 per share.

If the deal is secured at this price, PAN Group is expected to spend about VND527 billion (US$22.6 million) to own the shares. This capital comes from equity and other legal capital of the company. PAN aims to increase its long-term ownership in Bibica through the deal.

On the stock market, Bibica shares (BBC) have stood at a low level in recent years. BBC closed last week at VND61,300 per share and increased to VND67,900 per share on Thursday after the news about PAN Group's offering.

Bibica's business results have seen progress in recent years. In 2018, Bibica’s revenue reached nearly VND1.4 trillion, an increase of 10.5 per cent compared to the previous year. Post-tax profit touched over VND110 billion, up 13.26 per cent year-on-year, exceeding 11.7 per cent of the profit target assigned for the whole year.

Bibica currently has two major shareholders. Lotte Confectionery owns 44.03 per cent of Bibica's charter capital, while PAN Food, a subsidiary of PAN Group, is holding 50.07 per cent.

PAN Food has officially invested in Bibica since 2015 and gradually increased ownership in Bibica. PAN Food plans to apply the 3F formula (Feed – Farm – Food) when investing in Bibica and participating in the food industry.

In Bibica, it is said that the Vietnamese board of directors are in conflict with the Korean investor, Lotte Confectionary, about the company's development strategy. Bibica CEO Truong Phu Chien had previously told the media that Bibica expected a comprehensive partnership with Lotte in terms of management expertise, technology and export support, but the Korean investor only wanted to make it a subsidiary.

At the beginning of 2019, in an interview with the media, the Bibica CEO said he was relieved as PAN Food finally had become a controlling shareholder of Bibica so a long-standing brand of Viet Nam will be preserved.

Regarding PAN Group's public bid to buy Bibica shares this time, there is a high possibility that Lotte Confectionary had accepted to divest capital from Bibica and PAN Group may acquire all the remaining shares of Bibica.

Construction firm Coteccons prepares for revenue and profit to fall

The construction conglomerate Coteccons Construction Joint Stock Company (Coteccons) expects its year revenue to fall 5 per cent year-on-year to VND27 trillion (US$1.2 billion) this year.

The company expects profit to decrease by 14 per cent against 2018, at VND1.3 trillion.

In the second quarter of 2019, Coteccons's net revenue hit VND5.8 trillion, down 30 per cent over the same period last year. Cost of goods sold accounted for nearly 97 per cent in net revenue so the company recorded only nearly VND184 billion in gross profit, down 67 per cent compared to 2018.

In the period, revenue from financial activities reached nearly VND72 billion, with a major part from bank deposits.

After deducting expenses, post-tax profit in Q2 only touched VND124 billion, down by 71 per cent year-on-year. This is the lowest quarterly profit that Coteccons has recorded since the first quarter of 2015.

In the first six months of 2019, net revenue of Coteccons was estimated at VND10 trillion, down by 20 per cent year-on-year. Post-tax profit stood at VND312.6 billion, down by more than half compared to that recorded in the first half of 2018.

As of the end of June this year, Coteccons's total assets totalled more than VND15.5 trillion, down VND1.2 trillion compared to the beginning of the year, mainly due to a reduction of short-term receivables.

Total liabilities reached nearly VND7.6 trillion, down by VND1.3 trillion compared to the beginning of the year. Equity touched VND8 billion.

Recently, KIM Viet Nam Growth Equity Fund has purchased 260,000 shares of Coteccons, thereby raising the ownership of the Korean fund group in Coteccons from 7.68 per cent to 8.02 per cent. VOF Investment Limited Fund, managed by Vinapital, has also bought an additional 50,000 shares to increase its holding to 7 per cent.

Coteccons shares closed Thursday down 1.33 per cent to end at VND111,000 each.

FPT Retail focuses on pharmacy segment

FPT Digital Retail JSC (FPT Retail) recorded net revenue of more than VND8 trillion (US$343.35 million) in the first half of 2019, a year-on-year increase of 7.5 per cent.

The figure was revealed by the company’s deputy general director Nguyen Viet Anh at a conference held in Ha Noi on Thursday.

Notably, revenue from e-commerce increased by 40.6 per cent to reach approximately VND1.65 trillion, account for 21 per cent of total revenue.

Revenue from accessories was VND374 billion, up 25 per cent year-on-year. The amount of SIMs sold in the reviewed period reached 460,000 pieces, a sharp increase of 91 per cent compared to the same period in 2018.

From January to June, FPT Retail posted pre-tax profit and after-tax profit of VND201 billion and VND158 billion, up 9.6 per cent and nearly 8 per cent, respectively.

This year, the company targets revenue of VND17.7 trillion and after-tax profit of VND418 billion, equivalent to growth of 16 per cent and 20 per cent respectively compared to 2018.

FPT Retail's Compound annual growth rate (CAGR) for 2019-21 is 15 per cent per year for revenue and 20 per cent per year for pre-tax profit.

By June 2019, the total number of stores was 558 units, an increase of 25 stores compared to the beginning of the year.

FPT Retail’s representative also revealed the company will continue to invest in developing its Long Chau drugstore chain, which will lead in FPT Retail's overall growth in the future.

The company aims to have 470,000 Long Chau pharmacy stores in 2021 and the revenue from its pharmaceutical business will reach VND4.4 trillion. 

VietJet Air, Masan purchase Viet Capital shares

Viet Capital Securities Joint Stock Company (VCSC) has announced the results of its bond issuance.

Accordingly, Vietjet Aviation Joint Stock Company and food and beverage Masan Group spent nearly VND400 billion (US$17.17 million) to own VCSC's non-convertible bonds in the recent issuance of bonds worth VND500 billion.

Specifically, Vietjet bought 70 per cent of the bonds for VND350 billion. Masan spent VND37 billion owning 7 per cent of issued bonds of Viet Capital Securities.

In addition, domestic investors purchased VCSC’s bonds worth VND103 billion, equivalent to 21 per cent and foreign investors bought the remaining VND10 billion, equivalent to 2 per cent.

All of 50,000 VCSC’s bonds (par value of VND10 million per bond) are registered, non-convertible, two-year bonds with nominal interest rates and actual issuing interest rates in the range of 6-8.2 per cent per year.

In the second quarter of 2019, VCSC ranked third with 9.37 per cent market share in the top 10 securities companies with the largest brokerage market share on the Ho Chi Minh Stock Exchange (HoSE).

Generally, for the first six months of 2019, VCSC ranked third with 9.71 per cent market share of stock and fund certificates.

This year, VCSC targets revenue of VND1.65 trillion and net profit of VND680 billion, a year-on-year decrease of 17 per cent.

However, at the end of the first quarter of 2019, VCSC's revenue decreased by 35 per cent over the same period to reach VND371.48 billion and after-tax profit decreased by 39 per cent over the same period to VND202.5 billion.

Hong Kong fund introduces MSCI Viet Nam ETF

Hong Kong-based investment firm Premia Partners, one of the top 8 exchange trade fund (ETF) issuers in Hong Kong, has announced the listing of Premia MSCI Viet Nam ETF to seek investment opportunities in Viet Nam.

Premia MSCI Viet Nam ETF tracks the MSCI Viet Nam Index, which aims to capture leading large and mid-cap Viet Nam-based companies that represent 85 per cent of market capitalisation in Viet Nam.

The index is dominated by the real estate (45.5 per cent) and consumer staples (30.2 per cent) sectors and comprises 16 constituents, most notably property developer Vingroup (22.0 per cent) and Vinhomes (12.7 per cent), and dairy producer Vinamilk (17.8 per cent).

Compared to other ETFs currently operating in Viet Nam’s stock market, Premia MSCI Viet Nam ETF remains modest with fund size of US$21 million.

Premia MSCI Viet Nam ETF's portfolio has 16 stocks, including property developers Vingroup (VIC) (20.94 per cent), Vinhomes (VHM) (12.63 per cent) and Vincom Retail (VRE) (7.84 per cent), dairy producer Vinamilk (VNM) (17.01 per cent), Masan Group (MSN) (7.64 per cent), new generation carrier Vietjet (VJC) (4.97 per cent), brewer Sabeco (SAB) (4.31 per cent), Vietcombank (VCB) (3.99 per cent), PetroVietnam Power Corporation (POW) (1.54 per cent), PetroVietnam Gas Corp (GAS) (1.47 per cent), Bank for Investment and Development of Vietnam (BID) (1.39 per cent) and the Vietnam National Petroleum Group (PLX) (1.17 per cent).

Currently, there are a number of investment funds in Viet Nam tracking the MSCI indexes, such as MSCI Frontier Markets Index and MSCI Frontier Markets 100 Index. Notable names include iShares MSCI Frontier 100 ETF with over $500 million in funding, and Schroder ISF Frontier Markets Equity with $1 billion, among others.

The launch of Premia MSCI Viet Nam ETF facilitates investors with efficient market access and liquidity management tools as they position for opportunities amid market uncertainties, global supply chain reconfiguration, and new trade pacts including CPTPP and EVFTA with Viet Nam.

Nearly 3 million tourists come to Binh Thuan in H1

The south-central coastal province of Binh Thuan welcomed close to 3 million visitors in the first six months of this year, a year-on-year rise of about 12 percent, reported the provincial Department of Culture, Sports and Tourism.

Of the figure, there were more than 380,000 foreign tourists, rising 14 percent compared to the previous year. They mostly came from Russia, China, the Republic of Korea and Germany.

The province earned more than 7.4 trillion VND (317.75 million USD) from tourism, up 18 percent against the same period last year.

In addition to the development of resort tourism and water sports, Binh Thuan has focused on improving service quality and building new attractions, such as a fish sauce museum, an ancient fishing village and a wine castle, among others.

The province aims to receive 6.3 million holidaymakers this year for 15.4 trillion VND, and is set to continue tourism promotion in Vietnam and abroad in the rest of 2019.

Notably, in the coming time, Binh Thuan’s tourism sector will call on local people and businesses to switch from single-use plastics and plastic bags to eco-friendly products to ensure sustainable tourism environment and green growth.

In 2018, Binh Thuan welcomed more than 5.7 million tourists, up 12.8 percent year-on-year, with foreign arrivals reaching 675,000, up 14.3 percent, and earned 12.8 trillion VND, up 18.9 percent against 2017.

Binh Thuan has a coastline of 192km, with various beautiful landscapes such as Mui Yen, Cau isle, Ke Ga lighthouse, Ganh Son, Gieng Tien, and the Hon Cau Marine Protected Area where hundreds of rare species live.

In addition, Binh Thuan boasts Phu Quy island which is known as “the pearl in the middle of the sea” and located about 56 nautical miles off the coast. Meanwhile, Mui Ne beach, with its warm and windy climate, has been favoured as a venue for well-known surfers from the UK, France, Russia, Germany, and Australia.

First int'l exhibition on processing, packaging and preserving food and agricultural products opens in HCM City

The first Viet Nam International Exhibition on Processing, Packaging and Preserving Food and Agricultural Products (Vietnam PFA) 2019 opened in HCM City on Wednesday, offering opportunities for local and foreign exhibitors to introduce their products and explore business co-operation.

The exhibition has attracted nearly 100 exhibitors, including many local brands such as Vinamilk, TH Milk, Masan, Veam, Tin Dan, Song Hiep Loi, Arico, VMS, and Dai Chinh Quang.

Products on display at 150 booths included machines for processing meat, seafood, vegetables, rice, tea and coffee, grinding machines and equipment, shelling and sorting machines, dairy product lines and equipment, equipment and lines for packaging, canning, bottling, vacuum packing machine, preserving technology, food and agricultural products, materials used in the processing industry, and laboratory equipment.

An international conference on “Development of the processing and preserving industry for agricultural products in the integration period” will be held as part of the exhibition to discuss solutions to improve the added value of Viet Nam’s agricultural value chain.

Speaking at the opening ceremony, Phan The Anh of the Ministry of Industry and Trade said: “Viet Nam’s agricultural and food processing market has lots of room for development by both domestic and foreign investors to focus on investing capital and improving competitive capacity.”

With a series of new generation of free trade agreements about to be valid as well as the dynamic development of the economy, Viet Nam’s agricultural and food processing industry has great potential for advanced development.

Nguyen Quoc Toan, director of the Agro Processing and Market Development Authority, said: “To promote the development of agriculture, and take advantage of bilateral and multilateral free trade agreements, one of the urgent and necessary solutions is priority investment in research and development of technology lines, seeds, preserving and cleaning agricultural products, thereby diversifying and improving the quality of exported products in accordance with the international market’s technical standards.”

According to experts, 2019 will be a year with strong flow of capital into the agro-processing sector so that Viet Nam can have strong steps forward, Anh said.

Viet Nam’s agricultural processing industry has enjoyed an annual growth rate of 5-7 per cent, greatly contributing to an increase in agricultural exports.

Earnings from exports of agricultural products reached a record of US$40.02 billion last year. The cashew, coffee, rice, shrimp and seafood industries are among the sectors with modern processing technology on a regional and global scale.

Organised by the Agro Processing and Market Development Authority and C.I.S Vietnam Advertising & Exhibition Fair JSC., the exhibition is being held at the Saigon Exhibition and Convention Centre (SECC) until July 27 and is expected to attract 20,000 visitors. 

54th ASOSAI Governing Board meeting held in Kuwait

State Auditor General of Vietnam Ho Duc Phoc, Chairman of the Asian Organisation of Supreme Audit Institutions (ASOSAI) for the 2018-2021 tenure, chaired the 54th ASOSAI Governing Board Meeting in Kuwait City from July 21-24.

The event attracted over 100 delegates from audit institutions of Vietnam, China, Japan, the Republic of Korea, India, Bangladesh, Kuwait, Indonesia, Malaysia, Nepal, Russia and Thailand, among others.

Speaking at the event, acting President of the State Audit Bureau of Kuwait Adel Al-Sarawi spoke highly of the State Audit Office of Vietnam (SAV) and State Auditor General Phoc’s contributions to promoting linkage among ASOSAI members.

On the occasion, a memorandum of understanding on cooperation between ASOSAI and the Arab Organisation of Supreme Audit Institutions (ARABOSAI) was signed in order to further enhance inter-regional cooperation in public audit.

The ASOSAI Governing Board also adopted proposal by the Vietnamese side to implement the Hanoi Declaration, including stepping up knowledge sharing and capacity building for audit of environment issues and fulfillment of sustainable development goals.

In an interview granted to Vietnam News Agency on the sidelines of the meeting, Phoc said the SAV will play a guiding role in improving the capacity of 47 member SAIs, contributing to the sustainable development of the country and the world.

Within the framework of the meeting, a delegation of ASOSAI leaders led by Phoc met Crown Prince of Kuwait Sheikh Nawaf Al-Ahmad Al-Jaber Al-Sabah.

The Crown Prince highly valued SAIs’ efforts in ensuring the effective operations of public investment funds.

He hoped that the success of the meeting along with recommendations will help improve the capacity of financial resources management, support economic reform and fuel comprehensive development.

HCM City commits continuous support for Intel Vietnam

Permanent Vice Chairman of the Ho Chi Minh City People’s Committee Le Thanh Liem has committed all possible support for Intel Products Vietnam (IPV) to do effective business for mutual growth.

He made the statement during a reception in Ho Chi Minh City on July 24 for Director of Global Public Affairs and Sustainability at Intel Corporation Todd Brady.

Liem congratulated IPV on its achievements after 14 years of operating in Vietnam, adding that IPV still plays a key role in manufacturing and exports at the Saigon Hi-Tech Park (SHTP).

He hailed IPV for paying attention to not only production and trade but also workforce training, contributing to improving the city’s competitiveness.

Additionally, IPV also helps foster bilateral ties between Vietnam and the US, thus facilitating Vietnam’s global integration, especially in high-tech and knowledge-based economy.

Brady, for his part, said Intel is expanding investment in many countries to manufacture new products, and building factories in the US, Ireland and Europe which are specialised in virtual reality, artificial intelligence and unmanned auto applications.

He expressed wish to receive further support from the city to expand plants and pledged to partner with the city in fields of strength such as hi-tech human resources and smart urban development, virtual reality and artificial intelligence.

According to him, nearly 3,000 workers are working for Intel in Vietnam. From 2010 to late 2018, IPV earned about 26 billion USD from exports.

Vietnam int’l ads equipment exhibition underway in HCM City

The 10th annual Vietnam International Advertising Equipment & Technology Exhibition – VietAd 2019 is underway in Ho Chi Minh City from July 24-27.

The event attracts nearly 150 firms from 10 countries and territories, displaying advertising equipment and machinery at 400 stalls.

Nguyen Truong Son, permanent Vice Chairman of the Vietnam Advertising Association, said Vietnam has signed a number of free trade agreements, affording firms a chance to improve their competitiveness and seek business opportunities.

Head of the Ministry of Culture, Sports and Tourism’s Agency of Grassroots Culture Ninh Thi Thu Huong said Vietnam’s advertising sector has ceaselessly grown over the past years with increasing quantity and quality of enterprises, contributing to popularising their trademarks.

VietAd was held for the first time in 2010 with only 100 stalls.

 
 

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