Viglacera and new business opportunities for stock investors

With impressive business growth, Viglacera has attracted many foreign investors; their stocks were highly sought ever since their first public offering on UPCoM and many investors are waiting to buy stocks of Viglacera. On the morning of 22nd December 2016, Viglacera was officially listed on HNX, becoming the 167th stock listed on HNX in 2016, with capitalized value VND 4,912 billion, 75% higher than when it was first listed on UPCom. The listing of Viglacera Corporation has raised the total capitalized value of HNX to approximately VND 450,000 billion, 2.4 times higher than that at the end of 2015 and the total number of companies transacting on HNX to 777.

Chairman of the Board of Management, Mr. Luyen Cong Minh stroke the gong to open the first transaction of VGC

The total volume of Viglacera’s stocks (VGC) listed on HNX is more than 65 million, equivalent to VND 650 billion. The reference price for the initial public offering is VND 15,600 per stock.

According to Mr. Nguyen Thanh Long – Chairman of the Board of Management, Hanoi Stock Exchange – HNX: “Viglacera is a state-owned enterprise which was successfully equitised in 2014; the company works in real estate, production and trading of construction materials. When VGC stocks are listed, transactions on HNX marks an important milestone in the development of the enterprise as well as a new choice for investor. This listing will allow Viglacera to have public and transparent enterprise management, contributing to the sustainable development of the enterprise. Thereby, their shareholders and investors can exercise their rights and obligations; and this will open a new capital mobilization channel for Viglacera.

Mr. Nguyen Thanh Long - Chairman of the BOM, Hanoi Stock Exchange – HNX presents the certificate of stock listing on HNX to Mr. Luyen Cong Minh – Chairman of the BOM, Viglacera.

VIGLACERA (VGC) is among the leading businesses in the production of construction materials, with main products including building glass, sanitary ceramics, shower heads, tiles and terracotta; it is also a prestigious company in real estate investment. During 42 years of development, Viglacera has a total of 40 subsidiaries and affiliated companies nationawide.

The Deputy Minister of Ministry of Construction, Bui Pham Khanh highly evaluates the opportunities and prospects of VGC in its first public offering.

Business activities blossom with high profit growth

Until September 2016, Viglacera has earned VND 557 billion of before-tax profit, a sharp increase of VND 140 billion compared with the same time the previous year (equivalent to a 44% increase; this figure is also 6.3% higher than the before-tax profit of 2015. VGC has nearly reached its profit target for the year (VND 559 billion).

VGC’s main source of revenue comes from the trading of building materials. The revenue from these products accounts for the highest proportion of the total revenue, and also the sector with the highest gross profit margin.

Since 2014, total revenue from building materials has always been more than VND 5,000 billion, accounting for more than 70% of net revenue of the enterprise. In 2014, net revenue from these products was VND 5,165 billion; this figure increased by 7% to VND 5,527 billion in 2015. It is estimated that, in 2016, this figure may increase by 4.8% and reach revenue of VND 5,790 billion. This is the core business activity which makes the brand name for VGC.

The gross profit margin from the trading of these products in 2015 was 23%, an increase of 3.3% so from 2014 (19.7%) and is estimated to maintain in 2016.

Viglacera inaugurated low-e Glass factory (25/7/2016) – the first square meters of glasses offered to the market which are produced by a Vietnam enterprise.

Building glass

Owning three glass factories of a total capacity up to 1000 tons/day equivalent to 64 million m2 standard glass/year, accounting for 40% total designed capacity of the whole industry and is a pioneer in the manufacture of Low – e glass.

Ceramic sanitary wares and fittings

The total capacity of the three sanitary ware factories and one sanfi factory is up to 13 million units/ year, accounting for 12% total capacity of the whole industry. Viglacera’s sanitary wares and faucets are applied advanced green manufacturing: antibacterial Nano baked technology; water-saving technology on sanitary ware, shower and faucet, etc.

VGC is continuing to develop the market in the Southern region. In July 2016, Viglacera has started construction one sanitary wares factory in Vinh Xuan Industrial Zone, Vung Tau with over 50,000m2, and capacity of 750,000 sets of high-end sanitary ware annually.

Ceramic and Granite Tiles

In 2016, Viglacera has invested ISO 14000 green manufacturing production line produce Digital printing Granite Tiles – Eco, which increased the total capacity of Ceramic wall and Granite tiles of VIGLACERA up to 22 million m2/year, of which: Ceramic tiles - 14 million m2/year; Granite tiles - 8 million m2/year; contributing to make Vietnam become the leader in Southeast Asia and one of the world’s top 10 countries for production of tiles.

Clay tiles

Viglacera has 6 subsidiaries and 2 associated companies with a designed capacity of about 1.4 billion QTC bricks/year. Annually expected products for domestic and export of about 700 million all types of QTC bricks, 100 million roofing tiles and 10 million m2 of high-end tiles from terra cotta. Viglacera is continuing to invest in new projects with environmental friendly products and apply advanced technologies into production.

Real estate continues to bring greater revenue for VGC

Viglacera has invested in industrial park, urban area and housing, commercial center and office for lease of various segment, high-level, mid-level and social housing.

In 2015, revenue from real estate reached VND 1561 billion, accounting for 20% of the total revenue of the company. The gross profit margin of this segment was relatively high, reached 20% in 2015 and contributed to VGC’s total gross profit margin of nearly 15%.

VGC has a stable income from the rental and management of industrial zones

Viglacera has successfully developed 10 industrial zones with a total area of 3,580 ha. All of them are located in priority areas for national economic development, which are close to arterial transportation routes and provide convenient access to large airports, harbors and border gates of the Northern and Central areas. Therefore, many investors choose to build factories and production facilities in these industrial zones.

Viglacera’s industrial projects include: 1.Tiên Sơn IP - Bắc Ninh; 2.Yên Phong IP - Bắc Ninh; 3.Thuận Thành IP - Bắc Ninh; 4.Hải Yên IP - Quảng Ninh; 5.Đông Mai IP - Quảng Ninh; 6.Phú Hà IP - Phú Thọ; 7.Tiền Hải IP - Thái Bình; 8.Yên Mỹ IP - Hưng Yên; 9.Đồng Văn IV IP - Hà Nam; 10. Phong Điền IP - Thừa Thiên Huế.

In 2015, VGC made revenue of VND 501 billion from service provision, accounting for almost 6.4% of total revenue. The average gross profit margin of this area in 2014 and 2015 was more than 30%. This figure of the first 9 months of 2016 wasVND 345 billion, which is about 6.1% of total revenue.

VGC’ housing projects attract customers

VGC is the pioneering enterprise in building houses for workers, social housing and has achieved many successes. By now, the enterprise has finished and provided about 1418 apartments for experts and workers at industrial zones and nearly 5000 social houses for low-income households.

Đặng Xá – the most successful social housing project in Vietnam

In addition, VGC has also completed and exploited 18,000m2 of floor area for luxurious office rental and successfully constructed many residential areas, condominiums, adjacent houses and villas, typically Thang Long number 1 Commerce and Luxurious Apartment, 671 Hoang Hoa Tham Building…

VGC’s profitability ratio quite attractive with significant increase since 2014

Since 2014, VGC’s gross profit margin has remained at 20%, this shows that the enterprise has a very good and stable business. The gross profit margin in 2014 was 20%, increasing to 22% in 2015 and 25.2% in the first 9 months of 2016.

Prospects

The prospects of the enterprise will mainly depend on the situation of the construction industry and real estate. The construction and real estate markets are gradually recovering; they are expected to increase the demands for building materials as well as real estate business activities of VGC.

The enterprise has exploited quite well the domestic market. Viglacera has a wide network of distributors in all three areas, with more than 10,000 agents and distributors of building materials. Currently, the enterprise has about 40 export country partners. It is also expected that the export market will help the enterprise grow.

Viglacera is promoting partnership with foreign partners; in addition, Viglacera will form a joint venture to produce building materials and invest in hotel services in Cuba.

Besides, the total areas of 3,580 ha for the 10 industrial zones in convenient locations are expected to continue generate stable income for VGC in the coming time.

Therefore, if the construction and real estate markets become more active, it will be a good condition for the growth of the enterprise, and VCG stocks may become more attractive.