UPCoM-traded firms seek ways for bourse switch

June 16, 2020 - 08:11

The bourse switch will allow UPCoM companies to raise capital to finance their investment projects


The Đèo Cả Tunnel connects the two provinces of Phú Yên and Khánh Hòa in the central region of Việt Nam. The project investor Đèo Cả Traffic Infrastructure Investment JSC (UPCoM: HHV) is planning to move shares from the Unlisted Public Company Market (UPCoM) to the Hồ Chí Minh Stock Exchange (HoSE) in June 2021. — Photo deoca.vn

HÀ NỘI — Unlisted public companies are planning to move to the Hồ Chí Minh and Hà Nội stock exchanges to increase share liquidity and capital.

Đèo Cả Traffic Infrastructure Investment JSC (UPCoM: HHV) will propose shareholders approve a plan to cancel trading on the Unlisted Public Company Market (UPCoM) to list on the Hồ Chí Minh Stock Exchange (HoSE) in June 2021.

The company is trading more than 227 million shares on UPCoM. The switch will allow the company to raise capital, thus funding its infrastructure investment projects.

Đèo Cả Traffic Infrastructure Investment is the investor of many build-operate-transfer (BOT) projects such as Bắc Giang-Lạng Sơn Highway, Đèo Cả Tunnel and Phước Tượng-Phú Gia Tunnel. In 2020, the company will need VNĐ730 billion to invest in the two former projects.

In 2019, the company earned VNĐ477 billion (US$20.5 million) and VNĐ155 billion in total revenue and profit, respectively. Earnings targets for 2020 are expected at VNĐ1.7 trillion worth of revenue and VNĐ185 billion worth of profit, up 260 per cent and 19 per cent on-year.

Equitised Bình Sơn Refining and Petrochemical JSC (UPCoM: BSR) has filed to list its 3.1 billion shares on the Hà Nội Stock Exchange (HNX). The filing has been received.

The listing will make BSR shares more liquid, allowing the Government to proceed with its divestment plan, according to the board of directors.

Ending the first quarter, BSR posted a record loss of VNĐ2.35 trillion. The company targets a total output of 5.56 million tonnes of products for 2020; a total revenue of VNĐ80.68 trillion and a total post-tax profit of VNĐ1.18 trillion.

The post-tax profit for the whole year is expected to drop nearly 60 per cent on-year as crude prices are expected to trade at $60 a barrel on average this year. Earnings targets can be adjusted upon the movement of oil prices.

Other popular names that are considering a bourse switch included industrial park developer Nam Tân Uyên JSC (NTC) and some lenders like VietBank (VBB), LienVietPostBank (LPB) and KienLongBank (KLB).

UPCoM is seen as a transit station to encourage unlisted companies to trade their shares on the Vietnamese equity market. This is also the secondary option for those that are removed from the two stock exchanges to keep their shares liquidating.

Information and earnings quality standards on UPCoM are often lower than the two exchanges, so the majority of stocks are not as attractive to investors. Therefore, the market liquidity is lower than that of the two exchanges.

On Monday, the market index UPCOM dropped 0.73 per cent to end at 55.54 points with nearly 41.5 million shares being traded, worth VNĐ439 billion.

Trading volume and value of the HNX were double UPCoM’s while those of the HoSE were 17 and 52 times higher, respectively.

If those firms are qualified for HoSE and HNX listing, it means they are able to meet stricter requirements set by the two exchanges, thus allowing shares to be more active to benefit shareholders and investors. — VNS