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Listed companies draw cautious business plans for 2009
Some listed companies have built up their business plans for 2009. They seem to be very cautious with the planning, setting production and business targets completely different from the ambitious ones for 2008.
Two big names on the bourse, DPM, a fertilizer and chemical company and HAG (Hoang Anh Gia Lai group) have announced the targeted profit for 2009. DPM plans to obtain the total turnover of over VND 5,800 billion and pretax profit of VND 1,084 billion. Both the targets are lower than the implemented figures in 2008, which were VND 6,603 billion and VND 1,450 billion, respectively.
DPM General Director Phan Dinh Duc said that the oil price is not likely to return to the 2008 level which will have a bad impact on Vietnam’s economy in general, and the fertilizer and chemical in particular. Therefore, the said target proves to be reasonable.
Doan Nguyen Duc, Chairman of Hoang Anh Gia Lai group, said that the targeted VND 1,100 billion in pre-tax profit is the minimum level which can be reached in all cases. In case the market shows more favorable conditions, Hoang Anh Gia Lai will over-fulfill the plan.
Duc said that the group plans to begin selling apartments of Phu Hoang Anh project in district 7. If all the apartments of the projects can be sold, the group is likely to over-fulfill the plan.
A lot of real estate development companies have also built up business plans based on the expected turnover and profit from the contracts on selling real estate products signed in the last year.
As for exporters, Saigon Garment Company (GMC) has set the target of VND 18 billion worth of pre-profit in 2009, which proves to be lower than the 2008’s profit at VND 22.4 billion.
Garment companies have been facing big difficulties due to the export unit price decreases in the European market. In America, Columbia, a big importer, has cut 30-50% of import orders from GMC.
DIC, an investment and trade company, has also built up the business plan with the targeted profit of over VND 20 billion in 2009, lower by 10% than the implemented figure in 2008.
According to HSC Securities Company, the growth of listed companies in 2009 will decrease by 10% as more difficulties are expected to come.
The lower profit targets of most listed companies may cause investors to stay pessimistic about the recovery of the stock market. However, the cautious business plans by listed companies can help investors foresee risks. If the national economy recovers well, listed companies are likely to over-fulfill business plans.
In the latest report, Ban Viet Securities Company said that while the Government’s demand stimulus policy is believed to serve as the driving force for the national economy, the strengthening of the banking system will serve as an important foundation for maintaining the high economic growth rate in 2009.
Ban Viet has advised investors to keep close watch over the indexes, like the retail turnover, consumption index and export-import figures, industrial production value to know about the health of the national economy, which will help them make suitable investment decisions.
As such, perhaps listed companies would not have high profits in 2009, but investors will be safer with more cautious business plans drawn up by listed companies.
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