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VRG and Genco 3 to make debut on UPCoM
Ngoc Thuy 10:58, 2018/03/21
Vietnam Rubber Group (VRG) and Power Generation Corporation (Genco 3) will be listed on the Unlisted Public Company (UPCoM) today on March 21, according to the Hanoi Stock Exchange`s recent announcement.
With 4 billion shares, VRG set the reference price in the its first trading session at VND13,000 (US$0.57) apiece, equivalent to its market capitalization of VND52 trillion (US$2.27 billion). 
 
VRG to make debut on UPCoM today.
VRG to make debut on UPCoM today.
Concurrently, Genco 3 will make it debut on UPCoM with its reference price at VND24,800 (US$1.09) per share. For the total share amount of 2.08 billion, Genco 3's market capitalization is estimated at VND51.5 trillion (US$2.25 billion). 

Substantially, total market capitalizations of Genco 3 and VRG will reach VND103.5 trillion (US$4.52 billion). In the scenario of both companies' share value increase to the maximum of 40%, total market capitalizations will be VND145 trillion (US$6.4 billion). 

Genco 3 raises VND184.8 billion (US$8.13 million) from the initial public offering (IPO) on February 9. The proceeds were a measly 3% of the government's target of raising at least VND6.5 trillion ($286 million) from the stake sale. Reflection low investor interest, only 7.45 million shares of the 267 million on offer were sold in the auction. 

The Ho Chi Minh City Stock Exchange (HOSE) earlier said in a statement published on its website that a total of 336 investors had registered interest in only 2.8% of the stakes-amounting to less than 0.36% of the company-by the February 1 deadline. According to analysts, the disappointing results were due to Genco 3 being overvalued. 

Genco 3's prospective price-to-earnings (P/E) valuation is 19 times, higher than the 15 times average reported by regional peers and the 13 times of state electricity producer and distributor PetroVietnam Power (PV Power)'s IPO. 

The disappointing auction followed the IPO of Vietnam Rubber Group (VRG) on February 2 that saw the government raise VND1.31 trillion (US$57.7 million), far lower than its expectations of at least VND6.2 trillion (US$273.1 million). 

Genco 3's revenue in 2017 was estimated at over VND34.6 trillion (US$1.52 billion), with profit at VND1.27 trillion (US$55.8 million), as stated in the company's financial statement. Its total capacity reached 6,304MW, accounting for 16% of the national electricity system. The total capacity of the 4 Phu My Thermal Power Plants operated by Genco 3 (Phu My 1, Phu My 2.1, Phu My 2.1 Extension, and Phu My 4) is 2,540MW alone.

VRG currently possesses a land fund consisting of 420,000ha of rubber plantation area (300,000ha in Vietnam, 90,000ha in Cambodia, and 28,000ha in Laos). At the end of June 2017, VRG's total consolidated asset value was VND72 trillion (US$3.1 billion), including 22.7% of short-term and 77.3% of long-term assets. According to VRG, the rubber firm's net revenue in the first nine months of 2017 stood at VND354.4 billion (US$15.6 million), up 83%year-on-year. The group's after-tax profit stood at VND708.8 billion (US$31.2 million), 2.3 times as much as in the same period in 2016.
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