Business is down and we have to step up capital mobilization to carry out many large-scale real estate and infrastructure projects at the same time, but surprisingly, CII shares have increased rapidly. Statistics from April 9 to May 27 show that CII shares have increased by 51.4%, to VND15,900/share.
The recent price increase of CII shares is expected to be related to the re-evaluation of land funds in Thu Thiem (HCMC), when the City plans to re-auction some land lots in the area, along with the Trump Organization Group's interest and desire to build the Trump Tower Project in this area.
In the 2024 Annual Report, Ho Chi Minh City Infrastructure Investment Company said that the land lots in Thu Thiem include: lot 3.2 to implement the D'Verano Project, with a scale of 9,474 m2, a total investment of 704 billion VND and has been handed over; lot 4.8 with an area of 9,474 m2 to implement the Lakeview 4 Project, with an estimated total investment of 170 billion VND, in the investment preparation stage; lot 3.6 with an area of 9,474 m2 to implement the D'Vernal Project, with an estimated investment capital of 357 billion VND, in preparation for investment; lot 3-13 to implement the Riverfront Residence Project on an area of 5,823 m2, with an estimated investment capital of 1,450 billion VND, in preparation for investment; Lot 3-16 implements The River 2 Project, area 19,882 m2, estimated investment capital 3,157 billion VND, is preparing for investment; Lot 1-18 implements Commercial office project with area 6,054 m2, estimated total investment capital 683 billion VND, is preparing for investment.
In fact, most of the Company's remaining land lots in Thu Thiem are still in the planning stage of investment, still waiting for legal procedures and cannot be implemented to create cash flow in 2025, so the story of re-valuing Thu Thiem land fund is mainly an expectation rather than a reality.
The sharp increase in CII shares also triggered the selling action of the leaders when Mr. Le Toan, a member of the Board of Directors, registered to sell all 500,000 shares to solve personal financial needs, the transaction time is expected to be from May 30 to June 28. In particular, the valuation up to May 27, CII shares are trading at a P/E of 21.56 times, higher than the industry average of 19.76 times, so the valuation is no longer cheap.
In fact, Ho Chi Minh City Infrastructure Investment Company is one of the enterprises with a very high proportion of floating shares outside. As of the end of 2024, there was only one major shareholder, Ho Chi Minh City State Financial Investment Company, owning 24,049,215 shares, equivalent to 7.52% of charter capital; the remaining 92.48% of charter capital belonged to minority shareholders. In particular, Ho Chi Minh City State Financial Investment Company continuously disagreed or had no opinion on many proposals at recent General Meetings of Ho Chi Minh City Infrastructure Investment Company.
For example, the proposal to the General Meeting of Shareholders to approve the Board of Directors, based on the actual situation, to temporarily reduce the ownership ratio of CII Bridge and Road Investment Joint Stock Company (CII B&R) to below 50% in any fiscal year and strive to increase the ownership ratio to above 50% in the following years, the largest shareholder voted against, but the proposal was still approved.
Notably, CII B&R is the unit that owns most of the transport infrastructure projects of Ho Chi Minh City Infrastructure Investment Company. In particular, from the fourth quarter of 2023, CII B&R will begin to take control and merge Trung Luong - My Thuan Joint Stock Company.
Mr. Le Quoc Binh, General Director of Ho Chi Minh City Infrastructure Investment Company, shared: “The specialty of Ho Chi Minh City Infrastructure Investment Company is to invest in BOT projects. BOT projects have large total investment capital, high loan capital and increasing revenue over time (thanks to increased adjusted fees and increased traffic volume). Therefore, the Company often records low profits, even large losses in the early stages due to high interest expenses, but in the final years of the project life cycle, large profits are made thanks to increased traffic volume and zero debt. This is a paradox in BOT project accounting, the more BOT projects the Company invests in, the larger the loss, and this is a fake loss due to the burden of interest expenses in the early years. The final years have large profits, but they are fake profits because the capital has been recovered, the interest expenses are zero, it is simply the accumulated profits from previous years”.
It is known that Trung Luong - My Thuan Joint Stock Company is the owner of the Trung Luong - My Thuan Expressway BOT project (over 51 km long), the project will officially open to traffic in early 2022 and collect tolls from August 9, 2022. Thus, when merging the owner of the Trung Luong - My Thuan Expressway BOT project, it will help to account for profits from the revaluation of the investment of Ho Chi Minh City Infrastructure Investment Company.
Duy Bac
Source: https://baodautu.vn/con-qua-som-de-ky-vong-vao-co-phieu-cii-d293046.html
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