Vietnam Dealbook: Bao Phuoc-VNECO, Petro Song Da-PetroVietnam Construction, Kim Long Securities

Visual from Kizuna Group website

This week, Bao Phuoc JSC, a small domestic brand in Vietnam, acquired nearly 12.5 per cent in electricity and construction major VNECO. Another development in Vietnam’s construction industry saw the company Petro Song Da, become a subsidiary of PetroVietnam Construction via a share purchase deal.

Meanwhile, Kim Long Securities Company, worth VND202.5 billion ($9.4 million) in charter capital is planning to offload nearly 10 per cent of its stake to a foreign partner. Industrial zones in Quang Ngai province, centre of Vietnam, has two investors from Japan, with an outlay of $13.6 million for new projects.

Lighting device retailer become VNECO’s second biggest shareholder

Electric equipment distributor Bao Phuoc JSC has become the second largest shareholder of the Vietnam Electricity Construction Corporation (VNECO) by purchasing almost eight million shares of the company, the Ho Chi Minh City Stock Exchange announced.

After the transaction, Bao Phuoc JSC holds 12.48 per cent in the listed company, following the holding of its largest shareholder Khai Toan Group, which owns a 17.61 per cent stake.

The purchase was conducted through the negotiation method, on the stock exchange, at the price of VND13,500 per share.

Bao Phuoc JSC is based out of central Da Nang city in Vietnam. It deals in global electric lighting products such as AC and Comet. Prior to this deal, another electric equipment dealer, Khai Toan Group together with an individual investor had bought a 30 per cent stake in VNECO.

Bao Phuoc JSC has, reportedly, re-purchased the shares from the earlier investor. Meanwhile, according to corporate information website hosocongty.vn, the legal representative of Bao Phuoc JSC is Dang Trong Ngon, who also the CEO of Khai Toan Group.

Therefore, this might be a consolidation move of Khai Toan Group.

Also read: Vietnam’s Khai Toan Group buys 17.6% in VNECO

Petro Song Da to be the subsidiary of PetroVietnam Construction

Petro Song Da Trading and Investment JSC, an affiliate company of the state-owned construction corporation Song Da, has said it is planning to offload shares to PetroVietnam Construction Company to become its subsidiary.

PetroVietnam Construction holds a 27 per cent stake in Petro Song Da, but will possibly become the parent company if Petro Song Da’s allows it an ownership increase to 51 per cent.

In 2014, Petro Song Da’s revenue was VND560.8 billion ($26 million), a shortfall of 10 per cent from the annual revenue target, leaving a profit of VND9.9 billion. This year, the company has set a target of 135 per cent growth in revenue and 161 per cent growth in profit. Dividends are expected to be paid at six per cent.

Meanwhile, PetroVietnam Construction has recorded constant losses since 2012 until the third quarter of last year. The losses in 2012 and 2014 were VND1.34 trillion and VND1.6 trillion respectively.

In 2014, it managed to reverse the situation to a profit of VND15.4 billion. In terms of internal resources, it is still a leading company in the local oil and gas installation and construction sector.

Kim Long Securities targets to operate as an investment bank

Kim Long Securities Company has revealed that it is planning to expand its activity base to include investment banking, which will include, activities of consulting, capital investment and brokerage.

Among the company’s operations, brokerage accounts for only four per cent of the total revenue, while the “other revenue” category in the financial statement (which comprises of mainly capital investment) accounts for the largest proportion of 56 per cent.

Its revenue last year reached VND230.54 billion ($10.7 million), growing 37 per cent over 2013, and profit increased slightly to stand at VND144.78 billion.

Also last year, Kim Long Securities witnessed development in its consulting services, executing 64 consulting contracts, including 19 merger and acquisition deals.

In addition, the company said to be looking for a foreign investor to sell its 20 million treasury stocks, equivalent to a 9.9 per cent stake.

While it expects a 5-10 per cent growth for profit this year, Kim Long Securities made a loss of VND39 billion in the first quarter.

Quang Ngai Province gets new project investment of $13.6m 

The central province of Quang Ngai, Vietnam, has granted license to the $10 million Sumida spare part factory, which will produce inductors, coils and consumer and industrial electronic components. Japan’s Sumida Electronics Ltd, the owner of this project, expects the factory to start operation from January 2016, with an initial capacity of 10 million items per month. The duration of the project is 31 years from the receipt of investment license.

In addition, the province has also approved the expansion of investment for another Japanese company, Kizuna Group in the Tinh Phong Industrial Zone, which will see a $3.6 million 30,000 square metre factory and office project completed by November this year.

Foreign companies investing in Vietnam because of production cost saving and availability of skilled workers, Kizuna Group said. “However, many of them do not invest in building factory. Thus, they look for partners who provide factory for rent services. Foreseeing this demand, Kizuna builds factories for rent based on the standards and production requirements from our customers, mainly electronic companies.”

Le Viet Chu, chairman of the Quang Ngai province’s people’s committee, said that every investment project in the locality is critical, as the economic recovery has been slow.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.