Deo Ca Tunnel, a project of Deo Ca Traffic Infrastructure Investment. Deo Ca is operating six BOT (build-operate-transfer) toll stations, which have been a stable source of revenue for the past year. (Photo: Courtesy of Deo Ca Company)Hanoi (VNS/VNA) - A series of construction enterprises will benefitfrom the Government implementing multiple strategic public investmentinfrastructure projects.
Shares of the Fecon Joint Stock Company had a price increase of 37% in May2023, from nearly 11,000 VND per share to over 15,000 VND per share, after thiscompany continuously won bids for projects.
In May, Fecon won bids for projects worth a total value of 300 billion VND,including the concrete embankment of the Cầu Hôn project worth nearly 60billion VND in Phu Quoc, soil cement pile D1200 of the Royal Group Headquartersproject worth 22.2 billion VND in Cambodia, and production and pile pressing atthe Clubhouse Vung Tau project worth 12.2 billion VND in Phu Quoc. In the firstfive months of 2023, Fecon won bidding packages with a total value of nearly 800billion VND.
Fecon said the company selected projects carefully, ensuring the best resourcesfor projects and that they did not try to win bids at all costs. This was asafe plan in the context that lending interest rates of banks are still highand cash flow is still scarce in the market, it said.
Many other stocks such as Deo Ca Traffic Infrastructure Investment (HHV),CIENCO4 Group JSC (C4G), Licogi 16 (LCG) also witnessed increases in price inMay as well as in the first five months of 2023, thanks to the positivedevelopments in business operations.
Deo Ca Traffic Infrastructure Investment (HHV) has won three bidding packagesof the North - South Expressway project, phase 2. Besides construction, Deo Ca isoperating six BOT (build-operate-transfer) toll stations, which have been itsmain source of revenue for the past year, collecting about 2.6 billion VND ofgross profit per day. The increased travel demand due to the recovery of thetourism industry is expected to bring more revenue for these BOT stations of DeoCa.
According to DSC Securities Company, the construction industry has a positiveoutlook in 2023.
In the 2023-25 period, Deo Ca is expected to participate in investing in manymore expressways, with a total investment of about 40 trillion VND, focusing onprojects in the form of Public-Private Partnerships (PPP). In order to haveenough resources, Deo Ca plans to raise capital.
In 2023, the revenue and profit of Deo Ca is forecasted by DSC to reach 2.63trillion VND and 345 billion VND, up 25.5% and 16.2%, respectively, compared to2022.
CIENCO4 Group JSC (C4G) is also expected to benefit when the Governmentimplements a series of strategic transport infrastructure projects such as theEast North-South Expressway (phase 2), Long Thanh international airport, Hanoi andHo Chi Minh City ring routes, and green energy traffic projects.
In the recent 2023 Annual General Meeting of Shareholders, Cienco 4 GeneralDirector Nguyen Tuan Huynh said that in the first quarter of 2023, Cienco 4achieved revenue of 460 billion VND, profit after tax of nearly 41 billion VND,increases of 8% and 27%, respectively, over the same period in 2022. In 2023,Cienco 4 plans to achieve revenue of 4.5 trillion VND and net profit of 330trillion VND.
The Construction Industry Outlook 2023 Report of VNDIRECT Securities Companystates that this year promoting public investment disbursement will helpinfrastructure construction companies make a breakthrough in both revenue andprofit in the 2023-25 period.
Four factors promoting public investment
The disbursement rate for public investment as of April 30, 2023 is estimatedto reach 14.7% of the National Assembly's 2023 plan, with total disbursed valueof 711.7 trillion VND, an increase of more than 130 trillion VND compared tothe 2022 plan.
In May, investment capital from the State budget reached 45.1 trillion VND, andin the first five months of 2023 it reached 177 trillion VND, up 19.7% fromlast year, completing 25.5% of the yearly plan.
VNDIRECT believes that there are four supporting factors that will acceleratepublic investment projects this year.
First, Vietnam's public debt has decreased significantly in recent years thanksto high GDP growth in the 2016-22 period and tight spending control. The publicdebt ratio decreased from 51% in 2016 to 40% in 2022, according to IMFestimates, much lower than the public debt ceiling of 60% of GDP. Low publicdebt creates room for expansion of fiscal policy to support economic recovery.
Second, government bond yields have fallen sharply since the beginning of 2023.As of May 10, in the primary market, 10-year and 15-year bond yields fell 1.67%and 1.7%, respectively, down to 3% per year and 3.1% per year. On the secondarymarket, 5-year and 10-year bond yields fell by 2.42% and 1.89%, to 2.6% peryear and 3.2% per year, respectively.
Third, inflation slowed significantly. The consumer price index in May 2023 onlyincreased by 2.43% over the same period last year, while in January itincreased by 4.89%; on average, in the first five months of 2023, the ConsumerPrice Index increased by 3.55%. When inflationary pressures decrease, theGovernment may consider loosening fiscal policy.
Fourth, the Prime Minister directed the transport sector to completepreparations to start the construction of three expressways, Chau Doc-CanTho-Soc Trang, Bien Hoa-Vung Tau and Khanh Hoa-Buon Ma Thuat, and two ringroads including Ring Road 4 in Hanoi and Ring Road 3 in HCM City. Theseprojects are expected to start construction before June 30, 2023.
Mac Quoc Anh, Vice President of HCM City's Small and Medium EnterprisesAssociation, said the second and third quarters of 2023 are an important periodfor businesses when policies to promote the economy are implemented, especiallyin terms of finance, fiscal, cost reduction, and loan interest reduction in thebanking system.
“I think the second and third quarters of 2023 will be a growth period for Vietnamesebusinesses,” he said./.
Shares of the Fecon Joint Stock Company had a price increase of 37% in May2023, from nearly 11,000 VND per share to over 15,000 VND per share, after thiscompany continuously won bids for projects.
In May, Fecon won bids for projects worth a total value of 300 billion VND,including the concrete embankment of the Cầu Hôn project worth nearly 60billion VND in Phu Quoc, soil cement pile D1200 of the Royal Group Headquartersproject worth 22.2 billion VND in Cambodia, and production and pile pressing atthe Clubhouse Vung Tau project worth 12.2 billion VND in Phu Quoc. In the firstfive months of 2023, Fecon won bidding packages with a total value of nearly 800billion VND.
Fecon said the company selected projects carefully, ensuring the best resourcesfor projects and that they did not try to win bids at all costs. This was asafe plan in the context that lending interest rates of banks are still highand cash flow is still scarce in the market, it said.
Many other stocks such as Deo Ca Traffic Infrastructure Investment (HHV),CIENCO4 Group JSC (C4G), Licogi 16 (LCG) also witnessed increases in price inMay as well as in the first five months of 2023, thanks to the positivedevelopments in business operations.
Deo Ca Traffic Infrastructure Investment (HHV) has won three bidding packagesof the North - South Expressway project, phase 2. Besides construction, Deo Ca isoperating six BOT (build-operate-transfer) toll stations, which have been itsmain source of revenue for the past year, collecting about 2.6 billion VND ofgross profit per day. The increased travel demand due to the recovery of thetourism industry is expected to bring more revenue for these BOT stations of DeoCa.
According to DSC Securities Company, the construction industry has a positiveoutlook in 2023.
In the 2023-25 period, Deo Ca is expected to participate in investing in manymore expressways, with a total investment of about 40 trillion VND, focusing onprojects in the form of Public-Private Partnerships (PPP). In order to haveenough resources, Deo Ca plans to raise capital.
In 2023, the revenue and profit of Deo Ca is forecasted by DSC to reach 2.63trillion VND and 345 billion VND, up 25.5% and 16.2%, respectively, compared to2022.
CIENCO4 Group JSC (C4G) is also expected to benefit when the Governmentimplements a series of strategic transport infrastructure projects such as theEast North-South Expressway (phase 2), Long Thanh international airport, Hanoi andHo Chi Minh City ring routes, and green energy traffic projects.
In the recent 2023 Annual General Meeting of Shareholders, Cienco 4 GeneralDirector Nguyen Tuan Huynh said that in the first quarter of 2023, Cienco 4achieved revenue of 460 billion VND, profit after tax of nearly 41 billion VND,increases of 8% and 27%, respectively, over the same period in 2022. In 2023,Cienco 4 plans to achieve revenue of 4.5 trillion VND and net profit of 330trillion VND.
The Construction Industry Outlook 2023 Report of VNDIRECT Securities Companystates that this year promoting public investment disbursement will helpinfrastructure construction companies make a breakthrough in both revenue andprofit in the 2023-25 period.
Four factors promoting public investment
The disbursement rate for public investment as of April 30, 2023 is estimatedto reach 14.7% of the National Assembly's 2023 plan, with total disbursed valueof 711.7 trillion VND, an increase of more than 130 trillion VND compared tothe 2022 plan.
In May, investment capital from the State budget reached 45.1 trillion VND, andin the first five months of 2023 it reached 177 trillion VND, up 19.7% fromlast year, completing 25.5% of the yearly plan.
VNDIRECT believes that there are four supporting factors that will acceleratepublic investment projects this year.
First, Vietnam's public debt has decreased significantly in recent years thanksto high GDP growth in the 2016-22 period and tight spending control. The publicdebt ratio decreased from 51% in 2016 to 40% in 2022, according to IMFestimates, much lower than the public debt ceiling of 60% of GDP. Low publicdebt creates room for expansion of fiscal policy to support economic recovery.
Second, government bond yields have fallen sharply since the beginning of 2023.As of May 10, in the primary market, 10-year and 15-year bond yields fell 1.67%and 1.7%, respectively, down to 3% per year and 3.1% per year. On the secondarymarket, 5-year and 10-year bond yields fell by 2.42% and 1.89%, to 2.6% peryear and 3.2% per year, respectively.
Third, inflation slowed significantly. The consumer price index in May 2023 onlyincreased by 2.43% over the same period last year, while in January itincreased by 4.89%; on average, in the first five months of 2023, the ConsumerPrice Index increased by 3.55%. When inflationary pressures decrease, theGovernment may consider loosening fiscal policy.
Fourth, the Prime Minister directed the transport sector to completepreparations to start the construction of three expressways, Chau Doc-CanTho-Soc Trang, Bien Hoa-Vung Tau and Khanh Hoa-Buon Ma Thuat, and two ringroads including Ring Road 4 in Hanoi and Ring Road 3 in HCM City. Theseprojects are expected to start construction before June 30, 2023.
Mac Quoc Anh, Vice President of HCM City's Small and Medium EnterprisesAssociation, said the second and third quarters of 2023 are an important periodfor businesses when policies to promote the economy are implemented, especiallyin terms of finance, fiscal, cost reduction, and loan interest reduction in thebanking system.
“I think the second and third quarters of 2023 will be a growth period for Vietnamesebusinesses,” he said./.
VNA
