Hapro and Protrade Corp. report successful IPOs

15:54 | 30/03/2018
Both state-owned Hanoi Trade Corporation (Hapro) and Binh Duong Producing and Trading Goods Corporation (Protrade Corp.), the owners of several golden land plots and industrial parks, conducted successful IPOs.
hapro and protrade corp report successful ipos
Both corporations' IPOs were successful

$22.97 million from Protrade Corp. IPO

On March 28, Protrade, the third largest state-owned firm in the southern province of Binh Duong, offered 30 million shares for sale, equalling 10 per cent of its stakes, at its IPO with the initial price of VND12,000 ($0.53).

As a result, 63 investors joined the auction, four of whom won with the highest bid of VND21,000 and the lowest bid of VND16,600. The average selling price was VND17,474, which was 46 per cent higher than the initial price.

Being the third largest state-owned firm in Binh Duong, Protrade currently owns a series of industrial parks, including Protrade International Tech Park, VSIP II Open Industrial Zone, as well as Song Than 3 and Dat Cuoc IZs.

After the IPO, the state’s holding in Protrade decreased to 50 per cent, equalling 150 million shares. Besides, Protrade Corp. will put 119.7 million shares, equalling 39.91 per cent of the stakes, on sale to strategic investors.

Previously, Protrade Corp. also published the following criteria for strategic investors:

Interested investors, either domestic or foreign firms, have to be operating for at least ten years in one of the following sectors: garments and textile, wood processing or real estate. Besides, interested investors must have the financial potential to promote the development of Protrade.

Furthermore, after the deal ends, the strategic investor will not be permitted to transfer the bought stake for at least five years after Protrade receives the business registration certificate.

The offering price to strategic investors will be equal to the minimum successful bidding price.

So far, three firms applied to become the strategic investor of Protrade, including SACOM Investment and Development JSC applying to buy 13 per cent stake, U&I Investment Corporation (6 per cent), and Development Limited Company (20.91 per cent).

Hapro’s success despite poor performance

This morning, Hapro put 75.93 million shares or 34.51 per cent of its charter capital on auction with the initial price of VND12,800 ($0.56). It expected to acquire at least VND971 billion ($42.78 million) from the IPO.

The entire volume of shares on offer was sold for a total VND980 billion ($42.96 million), nearly VND10 billion ($438,440) higher than previous expectations.

The average winning bid was VND12,908 ($0.57), while the highest bid was VND20,000 ($0.88) and the lowest VND12,800 ($0.56).

Almost all of the shares were acquired by individual investors.

A range of Hapro subsidiaries hold further valuable land parcels, for instance Hapro Holdings, which owns eight real estate projects in Vietnam, or Long Bien Trade Investment JSC with its 11 office buildings, and Trang Thi Trade & Service Company with 42 land plots for lease.

After the IPO, the firm will prepare dossiers to list its shares on the Unlisted Public Company Market (UpCOM).

Despite operating in the retail and import-export sectors and owning numerous golden land plots, in reality, Hapro is not a coveted asset for numerous reasons.

Notably, the corporation reported poor results in key business segments, including retail and export-import. The management capacity of the Board of Directors is still weak, which has been shown via consecutive decreases in revenue and profit.

Notably, in 2016, the revenue from trading and services decreased by VND500 billion ($21.92 million) against 2015 and VND1 trillion ($43.84 million) against 2014. In the past five years, the company’s highest profit reached VND40 billion ($1.75 million) per year. In 2017 alone, the figure was VND13.42 billion ($588,386) only.

Regarding Hapro’s golden land plots, almost all of them are relatively small, ranging between 500 and 1,624sq.m. Thus, it is difficult for the board of management and its strategic investors to develop large-scale real estate projects in the upcoming time.

It is expected that in the future, the success of Hapro will depend on the cooperation with Vietnam N.A Motor Co., Ltd. (N.A Motor), which was approved to become the strategic investor of Hapro.

Based on MasterCMS Ultimate Edition Ver 2.8 2018