(Stock Investment Magazine) Stock prices have declined sharply in the last month due to unfounded rumors opens opportunities to invest in Bamboo Capital JSC (BCG) because the company has stable business with profit growth and no significant outstanding loans …
Nguyen The Tai (photo), CEO of BCG talks to Stock Investment Magazine about the Company’s current operations and business plans in the near future.
It is said that BCG has large loss in a subsidiary, what do you say about this?
BCG currently has 9 member companies with holding percentage of 51% or more. Looking ahead, we will increase the ownership in several companies to 100%. In 2015, all of these companies have met their targets and contributed to BCG’s revenue and profit. There is no company with loss.
BCG’s 2015 audited profit will decrease by about 8 billion compared to forecast figure. This is due to some following reasons: Nguyen Hoang Company recorded additional 5 billion dong of interest expense of previous fiscal years (this expense has already been paid up in previous years, so the recognition only affects recorded profit rather than cash flow). The second reason is the decrease of nearly 3 billion dong of Antraco’s profit due to revaluation of resource taxes and additional provision for receivables as required by regulations.
However, audited profit after tax of BCG in 2015 has reached 52 billion dong, exceeding the plan by 41 billion. Currently BCG does not have any significant bank loans. Revenue is of nearly 1,000 billion dong, but accounts receivable is slightly over 200 billion dong, which proves stable and healthy cash flow status.
Can you share with us the business plan of 2016?
In 2016, BCG expects consolidated revenue of more than 1,800 billion dong, profit before tax of 95 billion dong and profit after tax is expected at more than 75 billion dong, respectively increasing by 87%, 33% and 26% compared to 2015.
The profit figure of 75 billion dong is a big challenge for BCG as the strategic M & A investment orientation has just started since 2015. In just one year of investment, the pressure will be great for companies to grow and contribute profit to BCG. However, BCG still expects the profit in 2016 will be contributed greatly from Tracodi, Antraco, Nguyen Hoang and especially the parent company BCG when this year it has been boosting trading activities and project development, through which contributing significantly to the consolidated profit.
In addition, as planned in 2016, BCG will continue to acquire a number of companies such as 1-5 Auto Company, Vu Thanh Tay Ninh, Da Lat Vinacafe. These are manufacturing companies with large sales, expected to contribute greatly to the business plan of BCG.
So will BCG plan to pay dividend in cash?
In 2015, BCG expects to pay 8% dividend in shares, as the 1,800 billion dong of revenue and 100% rate of growth require huge additional working capital. Dividend in 2016 can be divided in cash after BCG finish listing of Tracodi and Thanh Vu Tay Ninh in the stock market to reduce invested capital in those company but still ensure dominant ownership percentage.
BCG plans to increase its charter capital by issuing shares to existing shareholders and employees at 12,000 dong / share.
What is your backup plan in case the issuance turns out not successful?
In recent times, BCG’ falling stock price may affect somewhat to the issuance. So, at the AGM on the coming 5 April, BCG will suggest a change to the issuance plan, in which the expected offering price will be at par value of VND10,000 / share. BCG was looking for some foreign investors to buy shares in this issuance.
BCG’s subsidiaries operate in many different industries. So can you summarize the core business activities of BCG, sir?
BCG’s core activities focus on four main areas: Consulting and investment banking services; M & A investment; distribution and project management.
M & A activities focus on rising small and medium enterprises. We will implement restructuring and strengthening governance for these companies and then proceed to the listing of these companies to realize the investment value for BCG.
Project development is also the focus of BCG to create cash flows in medium and long term. In 2016, BCG has been participating in infrastructure projects, energy projects, production and distribution project for bedding products of the famous, over 25 year old brand Aussino, cold storage warehouse project for agricultural products, capsule coffee project.
In trading line, BCG takes advantage of synergy effects from subsidiaries, in which BCG promote sales activities for their products and perform centralized management of cash flow for production activities of those companies.
Consulting and investment banking services is a traditional line of BCG that helps to build network, connect partners and most importantly increase efficiency of BCG’s own M & A investment line. Looking ahead, we will actively carry out activities like dialogues with shareholders and investors so that the market will better understand BCG./.
By Thu Hương
Link for details here: http://tinnhanhchungkhoan.vn/chuyen-dong-doanh-nghiep/bcg-tai-chinh-vung…