Bamboo Capital to make strong investment in subsidiary Tracodi’s infrastructure segment

Vietnamese conglomerate Bamboo Capital Group will invest strongly in the infrastructure segment of its subsidiary Tracodi as the government speeds up public investment in social housing projects.

Tracodi is expected to make a major contribution to fulfilling Bamboo Capital’s goal of surpassing the revenue milestone of VND32 trillion ($1.36 billion) by 2027.

Bamboo Capital, listed on the Ho Chi Minh Stock Exchange (HoSE) as BCG, targets over VND6.92 trillion ($295.1 million) in consolidated revenue and VND650.3 billion ($27.7 million) in after-tax profit for 2023, up 152.8% and 120.3% year-on-year, respectively.

The respective figures are expected to reach VND10.55 trillion ($449.5 million) and VND1.36 trillion ($57.7 million) in 2024; and VND32.08 trillion ($1.36 billion) and VND5.41 trillion ($230.4 million) in 2027.

To achieve the ambitious goal of surpassing the revenue milestone of over VND32 trillion ($1.36 billion) in the next four years, in addition to three core business segments including renewable energy, real estate and financial services, Bamboo Capital will focus on investment in Tracodi's infrastructure segment.

It aims to increase the competitiveness of Tracodi and invest in more machinery and equipment to turn the company into a leading transport infrastructure developer and construction contractor in Vietnam in the next five years.

In 2022, Tracodi completed the procedures to upgrade its industrial construction and renewable energy development capacity certificate from Grade II to Grade I. This is an important condition for Tracodi to bid for large-scale infrastructure projects.

In recent years, the company has been supported by parent group Bamboo Capital to access major transport infrastructure projects. Currently, it is constructing a taxiway for Phan Thiet Airport in the south-central province of Binh Thuan; a residential area and a reservoir adjacent to the Duc Thang residential area in Hiep Hoa district, the northern province of Bac Giang; and National Highway 3-Vo Nguyen Giap-Dong Anh Road in Hanoi. The firm is also building factories for a large FDI enterprise in the Mekong Delta province of Long An.

According to Bamboo Capital, Tracodi is under negotiation with southern provinces to implement three big projects during 2024-2027, namely the Go Dau-Xa Mat Expressway in Tay Ninh, Duc Hoa-Duc Hue Road in Long An, and Provincial Road 935 in Soc Trang.

Besides Tracodi's experience and construction capacity, one of the reasons for Bamboo Capital's confidence in promoting the infrastructure segment is that Tracodi owns the Antraco quarry, one of the largest in the Mekong Delta, providing stone products for the construction of bridges, roads and high-rise buildings, the firm said in a release.

This advantage will enable Tracodi to self-supply materials, minimizing construction costs.

At its recent annual general meeting of shareholders 2023, Bamboo Capital said that in addition to focusing on infrastructure projects, it is planning for Tracodi to manufacture prefabricated components for infrastructure construction or provide to other businesses.

According to the national road network plan for the 2021-2030 period, with a vision to 2050, approved by the Prime Minister, the Mekong Delta region will have six expressways with a total length of about 1,166 kilometers. In 2023 alone, this region will be allocated nearly VND100 trillion ($4.26 billion) to develop traffic projects.

Therefore, Bamboo Capital's strategy of "pivoting" to the infrastructure segment at this time is reasonable.

Tracodi, listed on the HoSE as TDC, sets a target of raking in VND3.3 trillion ($141 million) in consolidated net revenue this year, a year-on-year increase of 13%, and over VND267 billion ($13.39 million) in net profit, down 20%.

BCG closed the Thursday session at VND8,710 ($0.37) per share, while TDC hit VND11,350 ($0.48)