Vinalines fails to attract investors to IPO

10:35 | 06/09/2018

State-owned shipping giant Vinalines sold 5.44 million shares at its initial public offering (IPO) on September 5, only 1.1 per cent of the nearly 490 million shares offered for sale.

vinalines fails to attract investors to ipo
Vinalines only managed to sell 1.1 per cent of the shares offered at its IPO

The Hanoi Stock Exchange has announced the results of Vinalines' IPO, which attracted 42 investors who registered to buy nearly 5.44 million shares for over VND54 billion ($2.39 million), equal to 0.38 per cent of the corporation’s charter capital.

Vinalines planned to sell 490 million shares, or 34.8 per cent, at the IPO. The starting price was VND10,000 ($0.44) per share. The highest winning bid was VND13,000 ($0.57).

Vinalines is planning to operate as a joint stock company by late 2018 or early 2019. Its shares will be listed on the UPCoM market within 90 days of September 5.

The poor results of the IPO were forecast by industry insiders after the collapse of a strategic stake sale, blaming the unfavourable timing and unattractive financial indexes, despite interest among international groups, including SM Group and SK Securities.

As shown in the audited financial statements for 2015-2017, Vinalines’ return on assets (ROA) was 5.5 per cent in 2015, 13.7 per cent in 2016, and 1.9 per cent in 2017, while return on equity (ROE) was 9.5 per cent, 21 per cent, and 2.5 per cent, respectively. The ratios were lower than the industry average.

What is more, the shareholder structure, with the state holding 65 per cent, is believed to be an impediment to convincing investors.

Although Vinalines is a leader in the Vietnamese shipping industry, its annual revenue and profit remain low. In the first half of 2018, the group's profit stood considerably low at only VND73 billion ($3.23 million), compared to the annual target of VND668 billion ($29.56 million).

Vinalines was not the only state-owned corporation that saw poor IPO performance in recent times, many other high-profile groups shared the same fate, such as Vietnam Rubber Group, Power Generation Cooperation 3, and Song Da Corporation.

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Bich Thuy

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