Becamex IDC ticker dives close to one-year bottom despite market recovery

Although the Vietnamese stock market has gradually recovered since November 2022, with a series of stocks rising several times, BCM of industrial property developer Becamex IDC is on the way to its bottom set more than a year ago.

On the Ho Chi Minh Stock Exchange (HoSE), the stock closed the Friday session at VND69,500 ($2.85) per share, down over 29% from September 2022.

The VN-Index, which represents the HoSE, peaked in March 2022 and fell away March 2022, but has since been recovering, but BCM has seen the opposite trend. The stock has continuously slid since it peaked at VND98,000 ($4.04) per share in September 2022.

Becamex IDC is known as the industrial land "tycoon" in the southern province of Binh Duong and also the No. 1 infrastructure developer in Vietnam. It belongs to the provincial People's Committee, which owns 95.44% of its charter capital. BCM was traded on the Unlisted Public Companies Market (UPCoM) from 2018 to August 2020, when it moved to the HoSE.

After nearly 50 years of development, Becamex IDC now has 23 member companies operating in many fields such as industrial parks, construction, trade, real estate, services, telecom-information technology, construction materials, ports, education, and healthcare.

As industrial park development is a core business, the firm has invested in and managed dozens of industrial parks, not only in Binh Duong but many other localities such as Binh Dinh, Long An, Binh Phuoc and Binh Thuan.

At the same time, it has developed residential and commercial real estate around industrial parks such as My Phuoc, An Thoi, Bau Bang and VietSing. Other fields like healthcare, education, electricity, and construction have helped Becamex IDC create a complete ecosystem.

The corporation is considering investment in the field of port operations, focusing on inland waterway ports, waterway cargo transportation by barges, and passenger ships. According to its leadership, this field is expected to open up many opportunities for the firm in the coming period.

Among Becamex's member units, there are many prominent names on the stock exchanges such as Binh Duong Trade And Development JSC (HoSE: TDC), Becamex IJC (HoSE: IJC), Becamex ACC (HoSE: ACC), and Becamex BCE (HoSE: BCE).

Besides, it is impossible not to mention Vietnam-Singapore Industrial Park (VSIP) - a joint venture between Becamex IDC and Sembcorp Development of Singapore, with the company holding a 49% stake. Not only in southern Vietnam, the joint venture has successfully developed industrial parks in northern and central provinces such as VSIP Bac Ninh, VSIP Hai Phong, VSIP Hai Duong, VSIP Nghe An anad VSIP Quang Ngai.

According to Pham Ngoc Thuan, board member and CEO of Becamex, in the 2023-2028 term, the corporation will invest in building VSIPs in nine more provinces and cities, bringing the total number to 20. It will develop social housing, new-generation industrial parks, and urban areas-services and transport infrastructure.

With this great ambition, he said that Becamex IDC needs to increase its charter capital by VND20-30 trillion ($1.24 billion). Currently, it has total assets of nearly VND48.7 trillion ($2 billion), charter capital of VND10.35 trillion ($426.15 million) and equity of VND17.8 trillion ($732.89 million).

Its net profit continuously increased from 2015 to 2019 but has decreased since the Covid-19 period in 2020. In the first half of this year, Becamex IDC recorded revenue of VND1.89 trillion ($77.82 million), down 44% over the same period last year, as the revenue contribution of its real estate business dropped from 76% to 58%.

Joint venture activities saw a 63% decline in profit while other activities suffered losses of nearly VND100 billion ($4.12 million), causing the parent company's shareholder profit after tax to plunge by 87.3% to VND173 billion ($7.12 million).

Although business activities are forecast to continue facing difficulties and challenges in 2023, the leadership still targets VND9.56 trillion ($393.62 million) in revenue and VND1.26 trillion ($51.88 million) in after-tax profit, up 19% and 32% from 2022, respectively.

According to broker Saigon Securities (SSI), Becamex IDC plans to complete the transfer of 18.9 hectares of land in Binh Duong New City to Singapore-based CapitaLand for VND5.7 trillion ($234.7 million) in the second half of the year. In addition, the VSIP is expected to bring stable cash flow to the firm with about VND600-850 billion ($35 million) in annual dividends.

These two factors can be the basis for the board of directors to set a strong growth plan despite economic difficulties. The company may report a sudden profit in the second half of the year if it completes the deal with CapitaLand and receives dividends from the VSIP.