Leading beverage maker Sabeco will continue with its equitisation, but may move slower than expected as it attempts to list shares during the current period of uncertainty on the stock exchange.
The company’s IPO is still slated for some time in the fourth quarter, and is still receiving a great deal of attention from investors.
Nguyen Quang Minh, the company’s general director, says equitisation progress depends heavily on market demand for shares, which has been poor of late.
Post and Telecommunications Investment and Construction JSC (PTIC), for example, only sold 297,400 of the 2 million shares up for grabs in an auction yesterday. Lacklustre demand has been a problem for a slue of other large-cap companies, including Bao Viet.
Sabeco, maker of Sai Gon Beer, plans to sell a 20 per cent stake in the company during its IPO, with no shares allocated to foreign strategic partners.
"Sabeco will still attract investors, even with the market in such a poor state," says a Kim Long Securities analyst. "It’s one of those companies that investors have been eagerly anticipating, given its solid earnings results over the past few years."
People, though, should not expect to make money off Sabeco shares quickly, given current market uncertainties, and should instead look to the company’s long term prospects, according to Kim Long Securities.
The stock price may not surge on its first day on the bourse, but shares should sell out during the book building phase of the IPO, according to VinaCapital and Bien Viet Securities.
Seasonally strong earnings among food manufacturers in the final months of the year will ensure demand for the shares, analysts say.
Sabeco plans to use the capital raised during the IPO for capacity expansion projects, which will likely help the company’s bottom line in the long term.
In addition, the local beer market is expanding aggressively, catching foreign investor interests, with annual consumption at around 18 litres a person.
"We are also considering several co-operation projects with foreign partners, which will help us advertise products abroad," says Minh, who predicts 2007 revenue will be around VND8 trillion.
"With promising expansion plans, positive earnings result and control over a significant portion of the local market, buying into Sabeco is a good move, especially with the market in such a gloomy state," the Kim Long Securities analyst said.
Source: VNS
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