The long-awaited listing of the Hanoi Beer Alcohol and Beverage Joint Stock Corp (Habeco), the country’s third-largest brewer, will finally happen this Friday as it lists its shares on UPCoM (UPCoM: BHN). The Initial price was set at VND39,000 but the stock will trade within a +/-40% range on its first day on UPCoM.
To put things in perspective, when the company originally equitized in 2008, the average auction price was VND50,015 per share. And as of this week, on the OTC market, we saw bids at VND60,000, which reflects an 18.2x 2016E EPS (ASEAN brewers are trading around 22x). So it’s very likely the price on UPCoM will shoot up on the first day.
Considering the Ministry of Industry and Trade currently holds 81.79% and Carlsberg owns 17.23%, the free float will only be 2.2 million shares. Until the MoIT actually divests, we could expect dismal liquidity and upward pressure on the stock price. Even then, once the government speeds up its plan to offload assets, shares may go straight to a strategic; Carlsberg intends to double its stake in Habeco (and has preemptive rights to do so).
The bottom line is there’s no lack of interest for Vietnam’s beer market. According to the Vietnam Beer Alcohol Beverage Association, Vietnamese drinkers are expected to consume more than 4 billion litres of beer this year, up from 3.88 billion litres in 2015. On average Vietnamese drink 27.4 litres of beer per year, making them the biggest beer drinkers in Southeast Asia and the third largest in Asia after Japan and China.
Marc Djandji is Head of Institutional Sales at Viet Dragon Securities Corporate.