Coteccons Construction (CTD) plans to sell treasury shares to key personnel at a price seven times lower than market price

Coteccons’ shares have exhibited robust growth on the stock exchange, rising from the price range of VNĐ45,000 per share at the end of October 2023 to VNĐ70,000 per share at present. Photo Coteccons

HÀ NỘI Coteccons Construction Joint Stock Company (CTD) has recently unveiled its plan to sell approximately 713,000 treasury shares to its key personnel at a price of VNĐ10,000 per share. This price is seven times lower than the current market price.

Eligible individuals who can purchase these treasury shares include members of the board of directors, key managers and employees of Coteccons and its subsidiaries. The ownership transfer will be facilitated through the Việt Nam Securities Depository, and employees who acquire the shares will be subject to a one-year restriction on transferring them.

The purpose of this employee stock ownership plan (ESOP) is to boost staff morale, retain talent and foster long-term commitment among key personnel. Coteccons’ board of directors believes that this programme serves multiple objectives, such as limiting the expenditure on welfare programs while enhancing the company’s reputation and generating positive societal effects. Moreover, they anticipate that it will contribute to increasing shareholder value.

Coteccons’ shares have exhibited robust growth on the stock exchange, rising from the price range of VNĐ45,000 per share at the end of October 2023 to VNĐ70,000 per share at present. As a result, the company’s market capitalisation approaches VNĐ7 trillion.

In a recent analysis report, VNDirect Securities Company forecasts a target price of VNĐ79,300 per share for Coteccons.

According to VNDirect, Coteccons experienced significant growth in the value of newly acquired contracts following a period of restructuring, indicating the effectiveness of their new business strategies. Despite a decline in demand for civil construction due to a challenging real estate market starting from the third quarter of 2023, the company compensated for the revenue decline by securing construction packages for large foreign direct investment (FDI) enterprises, with notable projects including the Lego factory in Bình Dương.

The improved capacity in industrial project construction, along with established investor relationships and trust, positions Coteccons to secure more bidding packages in the industrial construction segment in the near future.

Regarding the civil construction segment, the VNDirect analysis team believes that Coteccons will continue to be a preferred choice for investors seeking to undertake large projects, thanks to their longstanding partnerships and ability to meet the needs and requirements of foreign investors.

It is estimated that the revenue in this segment will grow at a compound annual growth rate (CAGR) of 17.2 per cent over the next three years. VNS