Military companies’ shares sought as defense ministry divests from businesses
  • | vietnamnet | July 16, 2017 11:36 AM
Viettel, the telecom group, and Tan Can Sai Gon (SNP), a port developer, are the two names topping the list of military companies sought by investors.

Under a plan to restructure military enterprises, the Ministry of National Defence will retain only 17 state-owned enterprises and 12 joint stock companies with state capital (the state holds more than 51% of stakes until 2019).

The ministry won’t be engaged in business and will only manage enterprises really necessary for military affairs and national defence.

Viettel and SNP, together with two other names – Military Bank (MB) and the Vietnam Helicopter Corporation – four out of tens of corporations under the armed forces are sought by domestic and foreign investors.

Of these, Viettel is the largest corporation with the turnover of over US$10 billion in 2016 and pre-tax profit of US$2 billion. Under a PM decision, Viettel’s charter capital in 2015-2020 would increase from VND100 trillion to VND300 trillion, or nearly US$14 billion.

As the No 1 telecom group in Vietnam, Viettel has invested in nine other countries and holds the biggest market share in five of them.

However, Viettel is still closing the door to investors and there has been no plan on equitization. A senior executive of Viettel said in the international market, Viettel is worth more than US$20 billion.

Viettel has only opened doors to investors at some of its subsidiaries including Viettel Post and Viettel Global.

At present, investment opportunities at Viettel Post still exist, but the company’s share price in the OTC market has reached VND60,000 per share. At least 68% of Viettel Post stakes are being held by Viettel holding.

At Viettel Global, the holding company still holds 98% of charter capital and is no longer accepting investments from outside. Le Dang Dung, CEO of Viettel Global, revealed that Viettel plans to sell Viettel Global shares in foreign markets but is still studying the matter.

Listed among 20 Vietnam’s leading logistics companies, SNP is also a ‘hot name’. Holding 25% of the inland maritime shipping market share, the company has average growth rate of 21% per annum.

SNP possesses 17 ports, capable of receiving vessels of up to 200,000 DWT and other facilities. It holds nearly 50% of the market of import containers and 89% of HCMC market share. If SNP is equitized, it will be a hot commodity for the stock market.

Military Bank bears ‘military’ in its name, but most of its shares are being held by non-military investors. Viettel is the largest shareholder of the bank, holding 15.79% of market share.

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