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Listed lighting bulb maker looks set to be booming in 2011
Financial experts expect the lighting bulb producer Dien Quang Lamp (HoSE: DQC), listing on the Ho Chi Minh Stock Exchange, will be booming on the repayment from its foreign partner and a promising investment project in the Latin American market.
Experts expect the lighting bulb maker Dien Quang Lamp will be a good investment in medium terms
Cuba-based Comsumimport is US$56.4 million in debt to DQC, which is arisen from a purchase order under an inter-governmental cooperation program between Vietnam and Cuba.
As the debt was overdue, DQC, known as Vietnam’s second-largest lighting bulb maker, earns a lending rate in accordance with the purchase order.
Statistics show that the debt makes over 60 percent out of the firm’s total asset of VND1.7 trillion ($85 million). DQC borrowed more than VND490 billion from a bank with a preferential interest rate of 0.75 percent per month to prepare the order.
The government office also exempted the lighting bulb producer from setting aside a provision on both the debt of the Cuban firm and the bank’s loan.
Ho Quynh Hung, chairman and general director of DQC, said the company and the Cuban partner set a detailed repayment plan on the sideline of the inter-governmental conference between Vietnam and Cuba at the end of last year.
According to the agreement, Consumimport will return the debt in six years, of which they repaid more than $2.1 million in the first two months of the year, Hung said, expecting DQC will get around $12 million at yearend.
The lighting bulb maker is set to cooperate with a Venezuelan firm to open a venture named VietVen in Venezuela. Hung said the cooperation is expected to be a lucrative investment as there is no lighting bulb producer in the Latin American market.
Financial experts expect DQC will be a good investment in medium-term thanks to its healthy and stable earning results and promising investment projects.
They also noticed that the information about the Cuban partner’s repayment plan would likely to lure investors, helping to boost its share price in the upcoming time.
In 2010, DQC made a net revenue of VND583 billion ($29 million), a year-on-year increase of 25 percent. Its after-tax profit increased eight times year-on-year to VND45.43 billion and the dividend rate is up to 12 percent .
The export turnover moved up 66 percent year-on-year to VND$11 million. However, it failed to meet the targeted growth rate of 30 percent.
DQC this year targeted a revenue of VND699 billion, a year-on-year increase of 20 percent, and a pretax profit of VND55.5 billion, a year-on-year increase of 5 percent, with the dividend rate of 15 percent.
Dien Quang provides the local market with 25 million of fluorescent lights, 20 million of incandescent lights in different types, approximately 7,000 tons of glass and millions of high quality lamps and civil equipment, meeting 70 percent of the domestic demand.
At the annual general meeting this year, shareholders approved to cancel the employee stock ownership plan (ESOP) for 2010 and approve the 2011 ESOP with 50,000 ESOP shares at VND10,000/shares. These shares will be untransferable within three years.
Thai Ca - Tran Manh - Vu Minh
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