10:03 | 16/10/2017 Energy
PetroVietnam Oil Corporation (PV Oil) may double the amount of shares offered as part of its initial public offering (IPO), which is scheduled in the fourth quarter of this year.
A PV Oil representative told the HCM City Securities Corporation (HSC) at a recent meeting that the company will offer 20 percent of its total shares for sale at the IPO, or 210 million shares.
That number is twice the initial planned rate of 10 percent, or 105 million shares. The company also plans to sell 44.7 percent of its stake to several strategic investors.
The IPO and strategic stake sale will reduce the Government’s ownership in PV Oil to 35.1 percent. The company is in talks with potential partners and the list of strategic shareholders is expected to be completed by November.
PV Oil is a member of the Vietnam Oil and Gas Group (PetroVietnam or PVN), which is an entirely State-owned enterprise. The company has a monopoly of crude exports and is the second largest petroleum dealer after Petrolimex in Vietnam.
According to HSC, PV Oil is seeking to raise its market share in the local market to 30-35 percent in the next three to five years from the current 22 percent by increasing the number of gas stations.
The company expects its combined profit margin will rise to 6-6.5 percent in the targeted period by increasing its productivity and having advantages over competitors due to its large-scale business.
PV Oil has more room to grow thanks to the fast-increasing number of cars and other vehicles, leading to high demand for gas and oil products, HSC said, adding that market demand growth could reach 3.5-4 percent per year.
HSC estimated PV Oil’s revenue in the first six months was 28.3 trillion VND (1.25 billion USD), a yearly increase of 74 percent, or equal to 82 percent of the yearly plan, while pre-tax profit rose eight percent year-on-year to 231 billion VND, or 71 percent of the yearly plan.
For 2017, HSC forecast PV Oil could earn 48 trillion VND in revenue, an annual increase of 22 percent, and 650 billion VND in pre-tax profit, a yearly increase of 3.6 percent.
Shares of PV Oil could be listed in the first quarter of 2018 at the market capitalisation of 12 trillion VND, or 520 million USD, HSC forecast.