Vietnam's Kinh Do Food Corporation (KDC) expects its net profit to rise by one third this year and to complete the takeovers of two subsidiaries, including North Kinh Do Food Co (NKD), an executive said on Thursday.
Le Phung Hao, Deputy General Director of the Ho Chi Minh City-based firm, said this year's net profit would rise 37.8 percent from 2006 to 332 billion dong ($20.5 million) and to 572 billion dong ($35.4 million) next year.
"We will complete the acquisitions within this year after a share issue for which we are seeking licence from the State Securities Commission," Hao told Reuters on the sidelines of a conference in Hanoi.
In April, Kinh Do said it would issue 11 million shares to raise funds for three property projects and lift its registered capital by 30.6 percent to 470 billion dong ($29 million).
"We need more than 1,200 billion dong for our property projects," Hao said.
The projects include an office building in downtown Ho Chi Minh City, a shopping mall and office complex and an apartment building.
"Foreign investors are arriving in Vietnam, people's living standards are also getting higher, so the pressure on housing in Ho Chi Minh City is huge," Hao said.
Kinh Do was also running a venture with a Vietnamese military company to build a complex of office, trade promotion facilities and apartments in Ho Chi Minh City, he said.
Kinh Do's future business would include food processing, retail property and financial investment with food processing still contributing 70-80 percent of revenues, Hao said.
After the share issue, Kinh Do will take over the North Kinh Do Food Company, based in the northern province of Hung Yen.
It would be the first acquisition between two firms listed on the country's fledgling stock market, which has risen about 20 percent so far this year after a 144 percent surge last year.
North Kinh Do, which has a market value of $144 million, makes cakes, snacks and processes foods for domestic markets and export to the United States and Taiwan. Its shares last traded flat at 230,000 dong ($14.2) each.
Kinh Do makes food, confectionaries and fruit juice. It is also a general trading firm, dealing with a wide range of goods from textiles and electric appliances to stationery, fruit and vegetables.
Shares in Kinh Do ended up 2.04 percent at 250,000 dong ($15.5) on Thursday, valuing the company at $557 million.
It would also take over Kido Company, another subsidiary in the 10-member Kinh Do group, Hao said.
Source: Reuters
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