Vinhomes to buy back 370m shares to protect investor’s interest

Vinhomes Ocean Park, an urban area invested by Vinhomes. — Photo courtesy of the company

HÀ NỘI — Vinhomes JSC has recently revealed a plan to repurchase 370 million shares, amounting to 8.5 per cent of the current outstanding shares.

The buyback is slated to occur post the approval of the State Securities Commission of Việt Nam (SSC) and the company’s formal announcement regarding the repurchase process. 

Both matching orders and negotiated transactions may be used.

Shares of the property developer closed Wednesday at VNĐ37,200 a share, 15.4 per cent lower than the reported book value per share in its second quarter financial statement (about VNĐ44,000 per share). 

Based on the closing price, Vinhomes is expected to spend over VNĐ13.7 trillion in the buy back.

The move happened after the company’s shares hit an all-time low. 

It said that the current market price of Vinhomes falls below the actual company value and the share buyback aims to protect the company’s and shareholders’ interests.

According to the Securities Law of 2019, effective from January 1, 2021, the repurchase of 370 million shares will lead to a proportional decrease of Vinhomes’ registered capital by VNĐ3.7 trillion, as the company is obligated to annul the acquired shares.

A decrease in the circulating shares is poised to enhance the earnings per share (EPS). Vinhomes’ initiatives are anticipated to potentially assist in driving its price closer to its book value.

To date, Vinhomes retains its position as the largest residential real estate development enterprise in Việt Nam, managing a land reserve of around 19,600 hectares.

As per the regulations, publicly traded companies are required to finalise the share buybacks within the time frame specified in the information disclosure, not exceeding 30 days from the commencement of the transaction. 

Each trading day must see a minimum total purchase volume of three per cent and a maximum of ten per cent of the registered transaction volume with the SSC, excluding canceled orders with an exception when the remaining purchase volume falls below three per cent.

According to the consolidated financial report for the initial six months of 2024, Vinhomes achieved a net consolidated revenue of over VNĐ36.4 trillion. Excluding the revenue from the first quarter of 2024, the company generated over VNĐ28.2 trillion in the second quarter.

Its consolidated profit after tax was VNĐ11.5 trillion in the first half, primarily attributed to a significant transaction involving the sale of a large plot at the Vinhomes Royal Island project and the continuous handover of units in ongoing projects. 

As a result, in the second quarter of 2024 alone, the company recorded a profit of over VNĐ10.6 trillion, marking a nearly ten per cent increase year-on-year. 

As of June 30, Vinhomes’ total assets and equity stood at VNĐ494.46 trillion and VNĐ206.78 trillion, up 11.2 per cent and 13.2 per cent from December 31, 2023, respectively. 

An analysis report from An Bình Securities showed that Vinhomes’ growth prospects for the second half of the year remain promising due to the significant unrecorded cumulative sales volume at the close of the second quarter, totalling VNĐ118.7 trillion, ensuring profitability for the company.

Anticipated sales is also set to rise further with the imminent launch of major projects.

The company is reaching the final stages of two wholesale transactions valued at around VNĐ40 trillion. — VNS