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PV Power to launch IPO in January 2018
PetroVietnam Power Corporation (PV Power) will put more than 468.3 million shares of its charter capital for sale in its initial public offering (IPO) on January 31, 2018.
The shares will be listed on the Ha Noi Stock Exchange (HNX), the northern market regulator said in its Wednesday announcement.
The initial auction price for PV Power’s 20 per cent ownership is set at VND14,400 (64 US cents) per share. PV Power expects to receive at least VND6.74 trillion from the IPO, according to HNX.
The market capitalisation of PV Power at the share price of VND14,400 is estimated at US$1.48 billion while its charter capital is projected at VND23.4 trillion ($1.04 billion) after the equitisation process is completed.
According to HCM City Securities Corp (HSC), the IPO price is not cheap as the price-to-earnings per share (P/E) of PV Power for 2017 is estimated at 21 compared to the region’s average price-to-earnings (P/E) ratio of 15.46.
The HCM City-based brokerage firm said that despite the concern, the upcoming PV Power IPO would still be attractive due to the firm’s growth prospects and its leading role in Viet Nam’s electricity market, which is forecast to be the fastest-growing in the Southeast Asia region with annual power usage growth rate of 7.1 per cent in the period 2016-20.
PV Power will also sell 676 million shares or 29 per cent of its charter capital to strategic investors, which have not yet been addressed. The strategic investors are required to make profits in the last two years, have no accumulated loss, and hold on to PV Power shares for at least five years.
The Vietnam National Oil and Gas Group (PetroVietnam or PVN) will hold 51 per cent of PV Power’s capital on behalf of the Government after the power generator becomes a joint-stock company.
The State ownership in PV Power may lessen in 2019 onwards depending on how the company is able to restructure its loans and complete negotiations with debt holders.
PV Power was established in 2007 and it was fully-owned by PVN. The company operates one coal-based thermal power plant, three gas-used thermal power plants, and three hydropower plants. The annual production is more than 4,208 megawatts — equal to 10 per cent of the country’s total power output.
PV Power is forecast to record VND31.5 trillion in net revenue for 2017, a yearly increase of 12 per cent, according to HSC. The company’s post-tax profit is projected to increase 25 per cent year on year to VND1.9 trillion.
In the first nine months, HSC estimates PV Power posted VND23.1 trillion and VND1.66 trillion in net revenue and pre-tax profit.
Earlier IPOs for PV Oil
PetroVietnam Oil Corporation (PV Oil), another member of PVN, has announced its IPO will take place in the HCM Stock Exchange on January 25, 2018.
The company will offer nearly 207 million shares or a fifth of its charter capital for sale at a starting price of VND13,400 per share.
At that price level, the company’s market capitalisation is VND13.86 trillion while its post-equitisation charter capital is set at VND10.34 trillion.
The company will trade its shares on the Unlisted Public Company Market (UPCoM) under the Ha Noi Stock Exchange within 90 days from the IPO.
PV Oil will also sell more than 462 million shares (44.72 per cent stake) to strategic investors. PVN will hold a 35.1 per cent ownership in the petrol dealer after the equitisation is completed.
It will organise two roadshows in HCM City and Ha Noi on January 11-12 to introduce its portfolio to potential investors.
PV Oil is seen as the second-largest petrol dealer in Viet Nam after Petrolimex with a 22 per cent market share. In 2016, the company posted VND34 trillion in revenue and VND530 billion in pre-tax profit.
In 2017, its revenue is estimated at VND55.5 trillion and pre-tax profit is forecast at VND520 billion, outstripping the full-year forecast by 63 per cent and 36 per cent in revenue and profit, respectively.
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