Vietnam's logistics heavyweight Gemadept plans over $38 mln buyback if shares plunge

Gemadept, Vietnam's leading port and logistics company, listed on the Ho Chi Minh Stock Exchange as GMD, plans to buy back 21 million shares, equivalent to 5% of its outstanding shares.

The plan will be presented at the company’s 2025 AGM on June 24.

The move would reduce the company’s charter capital from VND4.2 trillion ($160.91 million) to VND3.99 trillion ($152.88 million).

The buyback aims to protect the interests of Gemadept and its shareholders, as GMD shares trade below the company’s fair value, its leaders stated. The repurchase is funded by share premium reserves.

The board has set the buyback to proceed when GMD’s share price falls 1.5 times below its book value and after receiving approval from the State Securities Commission, the country's stock market watchdog.

According to calculations, the company’s book value stood at around VND30,000 ($1.15) per share at the end of Q1/2025. Therefore, if the share price falls below VND45,000 ($1.72), Gemadept will spend about VND1 trillion ($38.32 million) on the buyback, regardless of the charter capital reduction.

Gemadept’s buyback plan comes after GMD shares plunged below VND42,000 ($1.61) per share following U.S. President Donald Trump’s surprise announcement of reciprocal tariff policy in early April. Since then, GMD has rebounded strongly to around VND59,100 ($2.26) per share, about 15.5% below the peak set in April 2024.

GMD shares closed Wednesday at VND57,900 apiece ($2.22).

Amid the sharp price drop in early April, apart from the buyback plan, several executives and insiders registered to buy tens of millions of shares. Some fully executed their purchases, while others bought less than planned due to price targets not being met.

For example, CFO Bui Thi Thu Huong bought 175,000 shares out of 500,000 registered; CEO Nguyen Thanh Binh purchased 400,000 shares out of 1 million registered; and vice chairman Chu Duc Khang acquired 630,000 shares out of 1 million registered.

Gemadept ranks among the cash-rich firms on the stock market. At the end of Q1, the company held about VND3.68 trillion ($141 million) in cash and cash equivalents, along with VND1.13 trillion ($43.3 million) in short-term financial investments, mainly deposits.

In 2024, it successfully issued over 103 million shares to existing shareholders at VND29,000 ($1.11) per share, with a small portion sold to other investors at VND45,000 ($1.72) per share after rights were waived, raising more than VND3 trillion ($114.97 million) to boost its operating capital.

Business plan remains flat

Gemadept’s leadership said early 2025 is marked by global instability and unpredictable geopolitical and trade developments, with signs of slowing growth worldwide and in Vietnam.

Against this backdrop, management set 2025 targets on par with 2024, including revenue of VND4.85 trillion ($185.83 million) and pre-tax profit of VND1.8 trillion ($69 million). These figures exclude capital transfer gains, which have historically caused profit spikes in previous years.

In Q1, Gemadept reported continued growth in its core operations. Revenue rose 28% to VND1.28 trillion ($49.04 million), while gross profit increased 27% to VND561.6 billion ($21.51 million).

Profit from joint ventures and associates more than doubled to VND227 billion ($8.7 million). However, financial income plunged from VND354 billion to VND29 billion ($1.11 million) due to a VND335.7 billion ($12.86 million) capital transfer gain booked in the same period last year.

Selling expenses doubled to VND86 billion ($3.29 million), and administrative costs rose 17% to VND125 billion ($4.8 million). These factors dragged net profit down 21% to VND527 billion ($20.2 million).

In 2024, the company reported revenue growth of 25.6% to VND4.83 trillion ($185.07 million), while net profit declined 24% to VND1.92 trillion ($73.57 million) due to a shortfall in financial income.

In 2023, Gemadept recorded a one-off gain of VND2.25 trillion ($86.21 million) from the sale of Nam Hai Dinh Vu Port in the northern port city of Hai Phong to Vietnam Container Shipping JSC (VSC).

Based on 2024’s results, the board proposed a 20% cash dividend payout, equivalent to approximately VND840 billion ($32.18 million).