HA NOI (VNS)— Seafood processor Hung Vuong (HVG) is enjoying a lucrative business one-and-a-half years after it bought the shares of rival company Sao Ta Foods (FMC).
This is because FMC's stock has increased by more than 150 per cent since the time of the purchase. At the end of 2012, FMC was offering five million shares for sale at a minimum price of VND10,000. Five months later, Hung Vuong spent VND52.5 billion (US$2.4 million) to buy the shares at VND10,500 each and ended up owning 41.8 per cent of the rival company. FMC's share price at that time stood at VND9,400.
Last year, the seafood processing industry faced a number of challenges, with shrimp prices increasing by 50 per cent. However, some companies, including FMC, managed to save their respective businesses.
FMC's revenue grew by more than 40 per cent to almost VND2.2 trillion ($103.7 million), leading to a net profit of VND32.7 billion ($1.5 million), or 5.4 times more than that of 2012.
According to an FPT Securities Company report, by 2020, FMC is expecting an annual growth of 7.65 per cent in shrimp output and 6.7 per cent in revenue, as well as a four per cent share of shrimp exports.
Data from the Viet Nam Association of Seafood Exporters and Producers shows that FMC ranked seventh nationwide in shrimp export value in the first five months this year, reaching $48.3 million.
In mid-July, the company announced that its second quarter profits surged by 340 per cent over that of the same period last year, with its shares repeatedly hitting the ceiling price and reaching VND28,900 ($1.3).
Meanwhile, HVG is reportedly aiming to buy a 10 per cent stake in Viet Thang Feed (VTF) at VND22,000 ($1) per share, to increase its total stake in the company to 75.96 per cent. VTF's share price increased by 4.7 per cent yesterday and closed at VND22,500. — VNS