Ministry of Construction divests capital, Viglacera shares skyrocket, money pours into stocks

In the trading session on May 29, VGC shares of Viglacera Corporation - JSC skyrocketed more than 6%, to nearly 40,000 VND/share, the highest level since the beginning of 2023.

Investors received information that Viglacera has an invitation to quote for providing valuation consulting services and consulting on State capital transfer plans.

Viglacera has a charter capital of VND4,483 billion. Currently, the Ministry of Construction owns 38.6% of Viglacera's capital, equivalent to 173 million shares. VGC's largest shareholder is Gelex (GEX), owning 50.21%.

This leading enterprise in the construction and industrial park sector has total assets of nearly VND 14,136 billion as of the end of 2022. Liabilities are more than VND 7,300 billion.

According to the announcement, Viglacera is in the process of developing and reviewing the proposed offering plan as well as investor criteria. The company will organize introduction sessions related to this offering.

Previously, VGC shares reached nearly 70,000 VND/share in September 2022.

VGC divested state capital in phase 1 in 2019.

Recently, the Ministry of Construction sent a document to the Ministry of Finance estimating revenue from selling state capital to the State budget for the period 2021 - 2025.

This year, the Ministry of Construction plans to divest all state capital in Viglacera, expected to collect more than 5,800 billion VND. The divestment plan is also mentioned by VGC in the upcoming shareholders' meeting documents.

*Small and medium-sized stocks have increased sharply in price recently, with many stocks increasing by 50-100%. (Photo: HH)*

In the first quarter of 2023, Viglacera recorded a sharp decrease in revenue and profit. In 2023, VGC plans to achieve revenue of VND 16,000 billion and pre-tax profit of VND 1,300 billion, also down from the previous year. VGC plans to maintain the dividend rate as in 2022 at VND 2,000/share.

The move to sell shares at VGC is part of the State's general policy of divesting capital from a number of enterprises.

In addition to the ministries, the State Capital Investment Corporation (SCIC) also plans to divest capital from many enterprises. SCIC has just announced the list of divestments in the first phase in 2023, including 73 enterprises, including Licogi Corporation - JSC (code LIC), Vietnam Seafood Corporation - JSC (Seaprodex - code SEA)...

SCIC is about to divest all 18% of its capital at Civil Engineering Construction Corporation 8 (Cienco 8) and divest the remaining capital at the "golden goose" Binh Minh Plastics (BMP).

Strong cash flow from individual investors

In the trading session on May 29, the stock market received a strong cash flow. Cash flow continued to come from individual investors and poured into small and medium-sized stocks, and tended to be less concentrated in blue-chip stocks in the context of foreign investors net selling about 10,000 billion VND in the past month and a half.

Some groups of stocks have attracted quite strong cash flows, including public investment stocks, although this group still faces pressure from interest rates and provisioning. Many public investment stocks have increased by 10-20% since February, such as: LCG, C4G, HHV, VCG...

In 2023, the Government aims to achieve a disbursement rate of public investment capital of at least 95% of the plan. Prime Minister Pham Minh Chinh emphasized that public investment is both a driving force and a resource for development, and must strive to disburse at least 95% of the total of more than VND 711,000 billion in public investment capital in 2023.

2023 is a year of great expectations for the public investment sector after a fairly successful year in 2022. Public investment is considered a growth driver for the economy in the medium term.

This is positive news for infrastructure construction businesses.

The VN-Index increased by 11 points in the early afternoon of May 29, reaching 1,075 points. The pillar stocks also unexpectedly increased quite strongly after many days of stagnation. The stocks of banks, real estate, securities, finance... all increased in price.

According to VNDirect Securities, public investment stocks have positive prospects and will make a breakthrough in 2023. Since the beginning of the year, the Government has boosted public investment to support economic growth in the context of weakening private investment and foreign direct investment.

According to the General Statistics Office, realized state capital (public investment) in April 2023 increased by 16.4% year-on-year to VND39,300 billion. In the first 4 months of 2023, realized state capital increased by 17.9% year-on-year to VND131,200 billion.

VNDirect maintains the forecast of state capital implementation increasing by 25% compared to actual implementation in 2022 in the context of significant reduction in public debt in recent years; government bond yields have decreased sharply since the beginning of 2023; inflation has cooled down; efforts to start key transport infrastructure projects before June 30.

SCIC is divesting all its capital from Cienco 8. Will the secretive Phuc Loc Group be interested in this "leading bird" in the transport construction industry when they are holding a controlling stake?

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