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

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.

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.