Vingroup-tied stocks rally as Vinhomes unveils plan to buy back 370 mln shares

By Quang Minh
Wed, August 7, 2024 | 2:01 pm GMT+7

Stocks of companies related to Vietnamese private conglomerate Vingroup flew high in the Wednesday morning trade after leading residential housing developer Vinhomes announced a plan to buy back up to 370 million shares.

A view of the Vinhomes Ocean Park complex in Hanoi. Photo courtesy of the company.

A view of the Vinhomes Ocean Park complex in Hanoi. Photo courtesy of the company.

Shares of Vingroup (HoSE: VIC) rose 2.54% to VND42,350 ($1.68) apiece while those of Vincom Retail (HoSE: VRE) jumped 5.88% to VND18,000.

Vinhomes (HoSE: VMH) hit the ceiling at VND37,200 ($1.48) a share. However, that market price is still 14% lower than at the beginning of this year.

The rallies were prompted by the Wednesday announcement on Vinhomes’ scheme to buy back 370 million shares, or 8.5% of the outstanding shares.

The timeframe for the buyback plan will be made public after the stock market watchdog greenlights it. Transactions will be made via put-through or order-matching methods.

Vinhomes claims that the plan is aimed at safeguarding rights of the company and its shareholders as VMH market prices are below its “true value.”

At VND37,200 ($1.48) a share, Vinhomes is expected to spend VND13,764 billion ($546.8 million) to realize the plan.

Under current legislation, if the buyback goes through with 370 million shares, Vinhomes will have to rescind the amount, causing its charter capital, currently at VND43,543 billion ($1.73 billion) to decrease by the corresponding VND3.7 trillion ($147 million).

Vinhomes is now the largest residential home developer in Vietnam with a land fund of some 19,600 hectares.

The company earned a consolidated net profit of VND11,668 billion ($463.5 million) in H1/2014, down 46% year-on-year. Revenue dropped 41% to VND36,429 billion.

Its total assets stood at VND494,460 billion ($19.64 billion) as of June 30, up 11.2% from end-2023.

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