Multiple listed companies announce capital raising plans, drawing investors

Headquarters of SmartInvest Securities JSC (AAS) in Hà Nội. At the annual general meeting of shareholders held earlier this week, SmartInvest Securities JSC (AAS) also asked for shareholders’ opinions on the plan to increase its charter capital by 6 times to VNĐ5 trillion. Photo cafef.vn

HÀ NỘI – Multiple listed companies on the stock market are set to announce their charter capital raising plans at the upcoming general meetings of shareholders.

Among the listed companies, the banking group seems to have been the most eager.

Vietnam International Bank (VIB) has attracted great attention from investors with its plans for capital increase, profit growth and bad debt reduction.

VIB plans to increase its charter capital to over VNĐ21 trillion (US$918 million) through the distribution of bonus shares at the rate of 35 per cent of charter capital to existing shareholders, and 0.7 per cent of equity sources to employees under the Employee Stock Ownership Plan (ESOP) programme.

In 2022, VIB sets a profit target of VNĐ10.5 trillion, an increase of 31 per cent compared to 2021. The targets for total assets, total credit balance and capital mobilisation all increased by 30 per cent, respectively to VNĐ402.5 trillion, VNĐ265.6 trillion and VNĐ280.6 trillion.

The bank also aims to control the bad debt ratio below 3 per cent, the capital adequacy ratio (CAR) calculated according to Basel II standards above 10 per cent. The return on assets (ROA) and return in equity (ROE) are expected to be 2.4 per cent and 29.5 per cent, respectively.

In April, many banks will hold their general meetings of shareholders, announcing information on capital increases and business targets. Asia Commercial Joint Stock Bank (ACB) will submit to shareholders a plan to increase capital through stock issuance. The bank plans to pay dividends in 2021 at the rate of 25 per cent in shares, raising its charter capital to more than VNĐ33.7 trillion.

Similarly, at the beginning of 2022, the Joint Stock Commercial Bank for Foreign Trade of Việt Nam (VCB) issued more than 1.02 billion shares to pay dividends from the remaining profit in 2019 to increase charter capital to more than VNĐ47.3 trillion. This year, VCB will continue to submit another plan to increase charter capital.

Bank for Investment and Development of Việt Nam has just also completed its plan to raise charter capital to VNĐ50.59 trillion. This bank is also set to issue 341.5 million new shares, equivalent to 8.5 per cent of charter capital through public offering or private placement to continue raising charter capital.

In the group of securities companies, many “huge” capital raising plans have also been released. For example, Saigon-Hanoi Securities Joint Stock Company (SHS) has just been approved by the State Securities Commission to issue shares to existing shareholders at a ratio of 1:1 at the price of VNĐ12,000 per share to increase capital to VNĐ6.5 trillion.

Having just doubled its capital from VNĐ731.5 billion to VNĐ1.46 trillion, APG Securities Joint Stock Company (APG) is expected to submit to the 2022 Annual General Meeting of Shareholders a plan to increase its capital to more than VNĐ4 trillion.

At the annual general meeting of shareholders held earlier this week, SmartInvest Securities JSC (AAS) also asked for shareholders’ opinions on the plan to increase its charter capital by 6 times to VNĐ5 trillion.

Thanh Tâm, an investor told tinnhanhchungkhoan.vn that information on raising capital had a positive impact on stock price movements, attracting lots of attention. However, the possibility of them buying would depend on factors such as strategic partners participating in the issuance, if any, the plan to use capital and the target profits.

“In the current context, many experienced investors will not only look at the plan of increasing capital, but they will also pay attention to the ability to realise the growth and profit goals of the business,” Tâm said.

Ambitious plans

Trần Minh Tuấn, Vice Chairman of the Board of Directors of SmartInvest Securities JSC (AAS), said that it was likely that the market would receive mainly positive news, with many bold and ambitious plans.

Explaining this more specifically, Tuấn said: “The size of the economy and the market have both increased significantly compared to previous years, so listed companies, especially financial enterprises such as banks and securities will increase capital to increase financial strength, competitiveness, providing more complete services according to market demand. Along with the capital increase plans, they have also announced positive earning plans.”

“At present, except for large listed companies that have clear information disclosure processes, most small and medium-cap companies have not paid enough attention to the process of information disclosure. In this regard, the information provided to shareholders has not been regular and timely,” Trần Khanh Hiền, Director of Analysis of VNDIRECT Securities Joint Stock Company, said.

“In addition to publishing quarterly financial statements, many businesses seem to only provide information on their production and business situation once a year, during the general meeting of shareholders. This is not enough in the current context of many macro fluctuations,” she said.

“In this year’s season of the general meeting of shareholders, perhaps many capital increase plans will be announced. Taking advantage of favourable market movements, many businesses have planned to increase capital to expand production and business and strengthen their financial capacity to recover from the pandemic. This is a good sign, proving that the stock market is becoming an increasingly important capital channel for the economy,” said Hiền.

However, listed companies all needed to balance between optimising capital efficiency and meeting the long-term expectations of shareholders, she said.

“Therefore, businesses need to provide clearer information about capital use plans to ensure confidence for investors.”

“On the other hand, investors also need to closely monitor the capital use plan of the business, giving priority businesses with transparent plans and an effective history of capital raising,” she said. VnExpress News