The majority of water companies have solid business results, good profitability indicators and stable annual dividends, making shareholders tend to focus on long-term investment instead of short-term trading. (Photo: tinnhanhchungkhoan.vn)Hanoi (VNS/VNA) - Positive businessperformance and the divestment of State capital from enterprises has helpedfirms in the water supply and drainage sector draw attention from investors.
The first half of 2019 was solid for most watersector enterprises.
Ben Thanh Water Supply Joint Stock Company (BTW)saw six-month revenue increase by 3.6 percent compared to the same period lastyear, while post-tax profit rose by 117.7 percent to 18.9 billion VND (810,000USD).
The growth in profit was much higher than in revenuethanks to a decrease in cost of goods sold, selling expenses and administrativeexpenses.
Currently, BTW's shares are being traded at 25,800VND each, up 85 percent compared to early this year.
Binh Duong Water - Environment Joint Stock Company(BWE) also reported high profit in the first half of 2019. Its post-tax profitreached 207.41 billion VND, up 101.7 percent year-on-year.
In the second quarter of 2019, BWE’s post-taxprofit rose by 145.6 percent thanks to the increase in net revenue from sales andservice provision and lower cost of goods sold.
Most water companies had solid business results,good profitability indicators and stable annual dividends, making shareholdersfocus on long-term investment.
Among more than 60 companies in the water supplyand drainage sector listed on the stock exchange, most of them are smallbusinesses with inefficient business operations and slow information publishing.
The wave of equitisation and divestment of Statecapital in enterprises, including the water sector, is attracting largeinvestors such as DNP Water JSC (DNP), Refrigeration Electrical EngineeringJoint Stock Company (REE) and AquaOne Water JSC.
Established in 2017, DNP Water is a subsidiary ofDong Nai Plastic JSC (DNP), currently owning 10 projects and serving more than500,000 customers.
DNP is the first company in Vietnam's clean waterindustry the International Finance Organisation (IFC) pledged to provide 24.9million USD to support its development strategy in clean water plants. In thenext five years, DNP aims to become a leading clean water investor in the localmarket, with capacity of 1 million cubic metres per day.
REE owns three water plants in HCM City and one inHanoi, with total capacity of 1.2 million cubic metres per day.
AquaOne Water JSC has three factories and hasinvested in many water supply and drainage companies.
Nguyen Van Thien, Chairman of the Board of Membersand General Director of Binh Duong Water - Environment Joint Stock Company(BWE) said "the characteristics of the water industry are great demand,sustainable growth and low risk". However, to maintain positive growth,enterprises need to focus on improving service quality, apply appropriate pricemechanisms and expand operations to rural areas.
On August 20, BWE and VietinBank signed a creditdeal, enabling BWE to implement many large-scale projects in water supply andsewage treatment, with total capital of about 4 trillion VND, of which loansaccount for some 3 trillion VND.
BWE supplies clean water in the southern provinceof Binh Duong with capacity of 450,000 cubic metres per day and is expandingthe factory to Chon Thanh district in the southern province of Binh Phuoc,serving Becamex Binh Phuoc industrial urban area and sub-areas.
From 2017 to 2019, the State has been carrying outdivestment from 57 water supply and drainage companies nationwide.
According to the Ministry of Construction, it isforecast that by 2020, the country's urban population will reach 44 millionpeople, demand for urban water supply will increase to 9.4 - 9.6 million cubicmetres per day and about $10 billion will be needed to build new water plantsand improve existing water systems.
Local authorities have encouraged investment inthe sector.
At the German - Vietnamese Industry Forum inMarch, Vice Chairman of the Hanoi People's Committee Nguyen The Hung saiddemand for clean water of the capital was very large and expected to reachabout two million cubic metres per day by 2020. By 2020, the city will striveto raise the rate of rural residents with access to clean water to 100 percent.
To achieve the target, the city encouragedinvestors and businesses to invest in water supply projects, Hung said.-VNS/VNA
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