TTC Sugar purchasing treasury shares

21-Apr-2018 Intellasia | VN Economic Times | 6:00 AM Print This Post

Company to acquire treasury shares from April 18 to May 17.

The Thanh Thanh CongBien Hoa JSC (TTC Sugar, stock code: SBT) began to purchase shares on April 18 to increase its treasury share (TS) holding and capital surplus, via order matching at market prices. It expects to continue to do so until May 17.

The number of shares projected to be bought is 83,552,800, or 15 per cent of the total issued. The target purchase price is expected to be under VND30,000 ($1.30) per share and the total value of TS being purchased will not exceed VND2.506 trillion ($110 million). MB Securities Company has been appointed as the agent to conduct the transactions.

The move also reflects its management’s commitment to complying with a resolution approved by the annual general meeting in terms of applying its operational strategy. Management is also optimistic about the development, growth scenario, and future potential of the company.

SBT’s share has recently traded under its real value. The company has expressed confidence in positive business performance in 2017-2018 and plans to utilise free cash flows to invest in profitable investments in the future.

In a report released in the first quarter of 2018, FPT Securities (FPTS) recommended purchasing SBT shares at VND30,000 ($1.30) per share, based on analysis of growth motivation, profitability, management assessments, and stock evaluation.

After 23 years of operations, SBT has upgraded its total capacity from 8,000 tonnes of sugarcane to 48,600 tonnes per day, making it the leader in Vietnam’s sugarcane industry. It is making significant changes in production capacity and increasing efficiency by mechanisation as well as the capacity of raw sugar refining.

The company is also expanding in both domestic and foreign markets. Its gross profit margin is expected to improve annually, to 17 per cent by 2020, while its ROE is to reach 15 per cent in 2021 after M&As. Pre-tax profit from 2018 to 2022 will increase at 30 per cent per annum. FPTS claims that SBT is in a period of both revenue and profit growth.

The company has announced plans to 2020, including selling 1.1 million tonnes of sugar, increasing export volumes, and growing the market share in both the institutional and individual segments. After the recent merger, the company’s production and business operations have been growing and expanding, gaining economies of scale and enhancing value chains.

The company possesses an in-depth and strategic orientation and has changed its organisational model in accordance with international management standards. It is currently being consulted and advised by the Big 4 global audit companies and the IFC on corporate governance and also strengthening its cooperation with international institutional investors in the industry.

SBT’s market capitalisation on April 17 stood at $458 million, accounting for 0.3 per cent of total market capitalisation. It is the leader in Vietnam’s sugar industry, accounting for approximately 42 per cent of the sugarcane industry’s market capitalisation and is 16 times larger than the second-largest company in the industry.


Category: Stocks, Vietnam

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