Vinhomes to start record-breaking stock buyback plan this month

Vinhomes JSC, the largest residential housing developer in Vietnam, plans to start buying back shares later this month in the largest ever buyback plan by a Vietnamese company.

Vinhomes plans to buy back a total of 370 million shares, equivalent to 8.5% of its outstanding shares, in one month starting October 23, the company said in an announcement on Friday.

The shares will be bought via order-matching and/or put-through transactions via securities companies.

The announcement was made after the State Securities Commission, Vietnam’s stock market watchdog, had received dossiers filed by Vinhomes JSC, a subsidiary of Vingroup (HoSE: VIC).

Vinhomes shares, listed on the Ho Chi Minh Stock Exchange as VHM, closed Friday at VND43,600 ($1.76) apiece. At this price, Vinhomes will have to spend VND16,132 billion ($649.83 million) on the plan.

Vinhomes made the buyback plan public for the first time on August 7, when its stock closed at 37,200 ($1.5) a share. VHM shares have increased 17.2% since.

The buyback plan is aimed to protect shareholders’ rights as the stock’s market prices are under the company’s price to book value (P/B), Vinhomes said.

According to Saigon Securities, Vinhomes’ P/B stood at VND44,208 ($1.78) as per its half-year financial statement.

As of June 30, Vinhomes had VND17,180 billion ($692 million) in cash and cash equivalents, according to its audited consolidated financial statement. It had VND146,351 billion ($5.9 billion) in retained earnings.

If Vinhomes fully realizes its buyback plan, its charter capital will decrease VND3.7 trillion ($149 million) to VND39,843 billion ($1.61 billion).