Subsidiary companies following their parent company's IPO: A new wave in the stock market.
After years of welcoming only a small number of "newcomers" to the stock market, the wave of listing subsidiaries/affiliated companies by many large listed companies is expected to provide more options for investors.
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| Vingroup Corporation is currently undertaking procedures to list Vinpearl on the stock exchange. |
Newcomers debut: New, but not unfamiliar.
June 13th is expected to be the final trading day for 110 million shares of Moc Chau Dairy Joint Stock Company (MCM) on the UPCoM exchange. The long-standing dairy brand, with 65 years of history, has officially received approval for listing from the Ho Chi Minh City Stock Exchange after 8 months since submitting its application and more than a year since shareholder approval.
“The plan to transfer the listing will begin implementation after being approved by the General Meeting of Shareholders. The company will do its best to complete the transfer procedures within one year,” Ms. Mai Kieu Lien, General Director and Member of the Board of Directors of Vinamilk , who also holds the position of Chairwoman of the Board of Directors of Moc Chau Dairy, strongly affirmed at last year's annual general meeting.
With the listing of Moc Chau Dairy, the HoSE will have a second dairy company, alongside Vinamilk – which is also the largest shareholder of the company. At the beginning of 2020, Vinamilk officially acquired the largest stake in Moc Chau Dairy after the merger of GTNFoods into Vietnam Livestock Corporation (Vilico). At the end of 2020, Moc Chau Dairy registered for trading on the UPCoM exchange. The news of the move to a listed exchange not only boosted MCM shares to a new record price, but more notably, the stock's trading volume has surged from tens of thousands of units per session to hundreds of thousands in recent sessions.
Vinamilk is not the only company preparing to list its subsidiaries on the stock exchange. Gelex Power Corporation – a subsidiary 80% owned by Gelex Group (GEX) – officially submitted its application to list GEE shares on the HoSE at the end of April 2024.
The plan to list Masan Consumer (MCH) shares on the HoSE stock exchange was also presented and unanimously approved by shareholders at the recent annual general meeting. Nearly 93.6% of Masan Consumer's charter capital is owned by MasanConsumerHoldings Co., Ltd. – a subsidiary of Masan Group.
“In 2024, Masan decided to begin its IPO journey for Masan Consumer (MCH),” declared Mr. Nguyen Dang Quang – Chairman of the Board of Directors of Masan Group Corporation (MSN) at the meeting, emphasizing one of the group's important tasks this year. The effect of the listing transfer, along with the new expectations of the leadership, was quickly reflected in MCH stock trading immediately after the General Meeting, both in price and trading volume per session.
Although not listed on the HoSE, BCG Energy – a renewable energy subsidiary of Bamboo Capital Joint Stock Company – is expected to trade on the UPCoM exchange in the second quarter of this year. On May 20th, the State Securities Commission approved the company's public offering registration application – one of the steps in implementing the listing roadmap for this subsidiary.
Although not yet officially documented, the IPO plan for the subsidiary Gia Lai Livestock has been hinted at by Mr. Doan Nguyen Duc, Chairman of the Board of Directors of Hoang Anh Gia Lai. According to Mr. Duc, Gia Lai Livestock is in no way inferior in terms of value and assets compared to currently listed companies such as Dabaco, BAF, etc.
Although not yet listed on the UPCoM exchange, Vinpearl – a major player in resort and entertainment tourism – promises to be a prominent name on the Vietnamese stock market. At the 2024 annual general meeting, Vingroup's leadership stated that they are carrying out the procedures to list Vinpearl on the stock exchange. A successful listing is expected by the end of this year.
Seize the opportunities arising from the market upgrade.
Becoming a publicly traded company with a charter capital of VND 7,500 billion and 49.3% of its shares held by retail investors, BCG Energy aims for transparency of information. According to Mr. Nguyen Giang Nam, Deputy General Director in charge of Project Financing at BCG Energy, corporate governance is one of the top priorities at the company. The determination to list shares on the stock exchange is also aimed at achieving this. With stricter requirements for transparency of financial reports, management reports, etc., investors will have a more accurate understanding of the company's value.
As for Masan, the decision to list its subsidiary on the stock exchange is considered a "family heirloom" of the Group, as Chairman Nguyen Dang Quang calls it, directly aimed at raising capital. Masan Consumer has had several ESOP share issuances for employees but has never raised capital through issuing shares to existing shareholders.
Mr. Danny Le, CEO of Masan Group Corporation, stated that Masan Consumer's average annual growth rate of 15% over the past 6-7 years provides a solid basis for considering the potential IPO plan. In addition to raising capital, the CEO expects the Masan Consumer share offering to help improve the valuation of the stock, which is currently trading below its intrinsic value on the UPCoM exchange.
In fact, in just the past month, MCH's share price has increased by more than 30% since the General Meeting. As a result, the market capitalization of this manufacturing company has risen to over $5 billion. Simultaneously, trading volume in each session has reached several hundred thousand shares.
Beyond the internal story of the companies, the stock market has also witnessed vibrancy in both the primary and secondary markets recently. In addition to the market's dynamism reflected in the total trading value each session, the successful IPO of DNSE Securities, which raised 900 billion VND earlier this year, is also a positive sign for the market.
Furthermore, as "commodities" on the stock exchange, the emergence of "newcomers," especially large-scale enterprises, is crucial for sustainable market development. At the first ever Conference on Implementing the Task of Developing the Stock Market in 2024, chaired by the Head of Government, in the group of tasks/solutions for issuers, the Prime Minister encouraged all types of enterprises to conduct IPOs associated with listing and trading registration on the stock market.
Recently, the State Securities Commission has also been revising the coordination regulations to help shorten the time required for post-IPO and listing/trading registration processes for businesses; consolidating reporting to a single point of contact to simplify the information disclosure process for businesses.
This is also one of the efforts by regulatory agencies aimed at upgrading the market's status. The capital expected to flow into the stock market from the upgrade can only be utilized if investors find opportunities to invest. It cannot be achieved overnight if investors are to have a correct understanding of the value of businesses, or further, if the stock market is to play its role as a medium- and long-term capital channel.
Source: https://baodautu.vn/cong-ty-con-theo-me-len-san-lan-song-moi-tren-thi-truong-co-phieu-d216337.html
