State capital management firm prepares four divestments

State Capital Investment Corporation (SCIC), which manages and invests state capital in enterprises, will organize four auctions this month to sell part of its stakes in four companies.

The four companies are: Vinacontrol Group, listed on the Hanoi Stock Exchange (HNX) as VNC; GP9 Hanoi Joint Stock Company; Asia Foods Corporation; and Feature Film Joint Stock Company I.

The SCIC announced on December 12 the auction of 3.15 million shares or 30% of Vinacontrol’s charter capital with a starting price of VND171.7 billion ($7.08 million), or VND54,500 per share. The auction will be held on January 15, 2024 at the HNX.

Vinacontrol was established in 1957 as the Department of Import and Export Goods Inspection under the Ministry of Trade (now the Ministry of Industry and Trade). It inspects import and export goods, makes quality assessments and issues certificates accordingly.

Its business results are relatively stable, with annual revenues of around VND500-600 billion ($27.34 million) and profits of VND30-35 billion ($1.44 million). It has paid cash dividends of over 12% each year.

However, VNC shares have not attracted investors as its liquidity is thin at just a few thousand shares per session, and even zero transactions during some. VNC shares were trading around VND50,000 ($2.06) per share and news of SCIC's divestment triggered a spurt in liquidity of more than 60,000 shares, increasing the ticker’s value to VND51,500 per share.

On December 8, SCIC announced the auction of 212,629 shares of GP9 Hanoi JSC, or a 12.7% stake, with a starting price of VND9.2 billion ($379,300). The auction will be held on December 28, 2023 at Hanoi-based Royal International Securities JSC.

GP9 Hanoi, with a charter capital of VND16.7 billion ($688,520), operates in the field of housing construction. In 2022, the company recorded revenues of VND106 billion ($4.37 million), an increase of 140%, and an after-tax profit of VND2.3 billion ($94,825), six times higher than in 2021.

On December 27, SCIC will auction more than 1.3 million shares of Asia Foods at Petroleum Securities Joint Stock Company (PSI) with a starting price of VND23.3 billion ($960,626).

Asia Foods, which operates in the field of milk and dairy products processing, has a charter capital of VND17 billion ($700,880). It has posted stable business results with revenues of about VND30 billion ($1.24 million) and profits of several hundred million of VND per year. SCIC has tried to auction its shares several times, but there have been no takers so far.

At the end of November, the SCIC announced the auction of 840,910 million shares of Feature Film Joint Stock Company I for VND8.8 billion ($362,810). The auction will be held on December 26 at PSI.

Feature Film JSC I, formerly known as Feature Film Studio I, was established in 1990 and became popular after making feature films like Chuyen cua Pao (Pao's Story), Luoi troi, Linh Chien (Soldier), Phuong Chay and Mien nui và hai dao (Mountains and Islands). Currently, it has a charter capital of more than VND14 billion. Its business situation showed signs of improvement in 2022 with revenues of VND13 billion ($535,970) and a profit of VND25.3 million ($1,043), compared to losses of VND9.2 million ($379) in 2021 and no profit in 2020.

SCIC's divestment activity this year has been relatively gloomy. The corporation launched many offerings in the first half of the year, but most of the auctions failed to materialize because no investors registered to bid.

In the first half of this year, SCIC recorded revenue of nearly VND2.6 trillion ($106.7 million) and an accumulated after-tax profit of VND3.1 trillion ($131.9 million), exceeding the year's plan by 10.5% and 6.2%, respectively. The corporation paid VND126 billion ($5.17 million) in corporate income tax.

It aims to become a top financial investment organization in the country in the coming decade.