FREE

VGC - Catalysts Ahead for VGC to Fully Realize its Potential

​“Viglacera is one of Vietnam’s leading building materials producers and property developers. Viglacera’s brand has been renowned with Vietnamese people, and its major products include construction glasses, toilet ceramics and tiles. Regarding its property business, VGC has been active in its participation in social housing developments in Ha Noi and has 4,000ha of industrial land.

Currently, most of VGC’s building materials production lines are running at maximum capacity. Therefore, the firm is planning to add new production capacity by embarking on projects in energy saving glasses, toilet ceramics, tiles and special white glasses. Given that the majority of new projects are able to begin production in late 2017 and early 2018, the company’s main growth catalysts are likely to fully kick in after 2016.

Regarding its property business, continued FDI flow to Northern Vietnam will be a growth catalyst for VGC’s industrial land demand. However, we do not expect a high return from this particular business until state ownership starts reducing more at VGC.

We believe VGC to be fairly valued at 17,800VND (11.9% upside from today’s closing price on December 14, 2016) and have come up with a “Neutral” recommendation for the stock in the Long-term”. In the short-term, VGC’s move to the HNX bourse on 22/12/2016 could support its stock price. However, the dilution risk is a great concern for investors at the moment.”