What can big corporations’ cooperation deals bring?

Analysts have been talking about the trend of “brand name trading”. This is when big corporations signs agreements on strategic partnership and cooperation.

A lot of cooperation agreements have been signed recently, between the Vietnam Post and Telecommunications Group (VNPT) and three corporations, Vincom (real estate developer), BIDV (bank) and Vinaconex (construction); between BIDV and the Vietnam Development Bank (VDB); between the Vietnam Coal and Mineral Industries Group (Vinacoal) and a transport works design company.

It has become a trend that big corporations cooperate with each other, which can help them share risks in doing business while allowing them to seek more profit.

VNPT, for example, is mainly a telecommunications service provider. However, with the cooperation with Vinaconex and Vincom, it is attempting to enter a new business field: construction and real estate. The enterprises that cooperate with VNPT will also benefit from having VNPT as a special partner in terms of access to its services.

The news about cooperation between corporations has brought about a lot of effects. One year ago, when the stock market was hot, news about cooperation deals helped a lot in making corporations’ shares more valuable. The shares of the companies involved in cooperation agreements skyrocketed right after mass media reported on the deals.

That explains why questions have been raised about the reasons for the partnerships.

VNPT now can establish a bank, while FPT, a software and informatics company, now can jump into other business fields, including finance and securities. Meanwhile, other enterprises have not made any moves after their hand shakings.

Vincom’s representatives stressed that the company did not intend to take advantage of VNPT to polish its image. VNPT and Vincom now have common, specific goals in capital investment, technology infrastructure for high-grade apartment areas.

According to VNPT’s representative, it will not happen that VNPT will be the sole service provider for Vincom. VNPT will have to compete with other rivals, though it has advantages as the strategic partner of Vincom.

Anyway, experts have warned that enterprises should think carefully before making cooperation deals. If the benefit the two sides can get does not satisfy enterprises, they will cheapen their brand names.

Source: VNE

VNPT, Vinaconex ‘synergise’ strengths

Viet Nam Post and Telecommunications Group (VNPT) on July 12 signed a strategic partnership agreement with Viet Nam Construction and Import-Export Corp (Vinaconex), forming the country’s largest cooperation deal.

”This is a very notable partnership as it will synergise the strengths and resources from two of the country’s leading companies,” said Vinaconex’s CEO Nguyen Van Tuan.
The two giants committed to using each other’s products and services.

“Partnering with the country’s biggest contractor will help VNPT expand its coverage with our products and services being used at Vinaconex projects,” said VNPT Deputy General Director Nguyen Ba Thuoc.

As Vinaconex expands globally, VNPT will also have an opportunity to reach new markets, he added.

On the other side, Vinaconex will be awarded VNPT infrastructure development contracts.
Vinaconex predicts 2007 revenue will reach 6.5 trillion VND (406 million USD), up 16.4 percent over last year. Pre-tax profit is expected to increase 49.7 percent to 350 billion VND (22 million USD).

VNPT last year posted a revenue of 38.3 trillion VND (2.4 billion USD), up 14.9 percent compared to 2005 and 3.4 percent higher than the company’s initial forecast.

Source: VNA

Constructions to increase by 70%

Enterprises under the Construction Ministry will implement 493 investment development projects capitalised at over 35.7 trillion VND (2.2 billion US$) in 2007, a 70% increase over 2006.
Investment will be focused on cement plants, housing and urban development, power plants, and infrastructure facilities for transport.
Among them, the Song Da Corporation will carry out hydro-power plant projects, the Machinery Installation Corporation (Lilama), thermal-power plants, the Viet Nam Construction and Import-Export Corporation (Vinaconex) and the House and Urban Development Corporation, cement plants and work in urban areas.

Source: VNA

Vinaconex publishes goals for 2007

The Viet Nam Construction and Import-Export Corporation (Vinaconex) yesterday announced a 6.5 trillion VND (406mio US$) revenue target for the year, up 16.4% compared to 2006.
The corporation based its growth estimates on ongoing and new property development projects and capacity expansion efforts in its construction materials businesses, according to CEO Nguyen Van Tuan.
Pre-tax profit is expected to rise 49.7% to 350 billion VND (22mio US$) in 2007, while

Vinaconex’s contribution to State coffers is forecasted at 210 billion VND (13mio US$).
To achieve growth targets, Vinaconex plans to speed up marketing efforts for cement produced at its Cam Pha and Yen Binh plants some time in the fourth quarter. Vinaconex will also resume the Ngoi Phat Irrigation Project in the second quarter, and plans to establish its own finance company to help mobilise investment capital.
Last year, the companies annual earnings jumped by nearly 17% on the back of record high exports. Total trade turnover was 78mio US$, of which 42.2mio US$ was from exports.

In 2006, Vinaconex completed it equitisation and construction on the National Conference Centre, both of which contributed to earnings growth. It also begun major transportation infrastructure projects like the Bai Chay Bridge.

The company is seeking co-investors in a 600mio US$, Cai Gia-Cat Ba urban-tourism complex, located in the northern port city of Hai Phong.
On its 172 hectares, the complex is set to be home to villas, hotels, and an entertainment districts built around the city’s hills and waterways. The developer also plans to build infrastructure to accommodate international conferences, marinas and shopping centres.
Executives want the complex to be the biggest modern ecological tourism centre in Viet Nam.
Vinaconex is currently discussing potential co-operation agreements with domestic and foreign investors, said Tran Ngoc Quang, director of the Cai Gia-Cat Ba project management board.
The company has already begun the first phase of the complex, the construction of a 10-hectare, 300mio US$ resort. The resort is scheduled to be complete in 2012.

Source: VNS

Vinaconex increases chartered capital

The Viet Nam Construction and Import-Export Joint Stock Corporation (Vinaconex JSC) expects to raise its chartered capital from 1.5 trillion VND (93mio US$) to VND2 trillion (124mio US$) in the first quarter of the year.

To meet the mark, the corporation will issue shares targeted at potential foreign partners specialising in cement, construction material production, real estate and finance. The State will retain 51 per cent of the firm. It now controls 64 per cent of shares, worth 960 billion VND (59.6mio US$)

Vinaconex JSC expects to reach 5 trillion VND (312.5mio US$) in chartered capital by 2010 through the issuance of shares.

Aside from equitisation, the company’s road map for growth will depend on stock trading and the demand for development.

Since the firm’s first share issuance, the stake of six strategic investors – which include domestic banks, investment funds and securities companies – has increased more than three fold to reach 33 million shares.

Source: VNS

Oversubscribtion of Vinaconex' share offer

The Hanoi Securities Transaction Centre (HASTC) has reported that a total of 2,248 investors have registered to buy 158,464,200 shares of the Vietnam construction giant Vinaconex, four times more than the amount offered between October 10 and 15. On November 1, HASTC will auction about 43 million ordinary shares at 10,000 dong par with an initial price of 11,000 dong.This will be the third largest amount of shares to be auctioned via the Vietnamese stock market.