ty le keo bongso88 recently successful Initial Public Offering (IPO) is just ty le keo bongso88 first step of An Phat Holdings (Ticker symbol: APH) in ty le keo bongso88 company’s plan to mobilise capital for AnBio compostable material manufacturing plant. ty le keo bongso88 project will put APH on ty le keo bongso88 list of one of ty le keo bongso88 few enterprises in ty le keo bongso88 world such as BASF, Novamont, NatureWorks, Total Corbion … that capable in producing compostable materials.
- APH – ty le keo bongso88 noteworthy stock IPO during Covid-19 outbreak
In an interaction with media, Mr. Dinh Xuan Cuong, Vice Chairman and Chief Executive Officer (CEO) of APH proudly said that this will be ty le keo bongso88 first compostable material manufacturing plant in Vietnam that would be able to supply “green” materials for both domestic and international production.
When AnBio project is completed in 2022, APH will fully take ty le keo bongso88 initiative in production inputs, while reducing product’s cost to create more competitive advantage. In ty le keo bongso88 context that ty le keo bongso88 market of compostable products is expected to accelerate in ty le keo bongso88 next few years to replace disposable plastic products, this is considered an important strategic move of ty le keo bongso88 largest green materials manufacturer in Vietnam.
To have a more comprehensive view, ty le keo bongso88 reporter had an interview with ty le keo bongso88 Vice Chairman and CEO of APH.
As seen, ty le keo bongso88 registration for your last IPO auction was nearly5 times higher than your expectation , ty le keo bongso88bidpriceis 2 times higher than initial one. Maybe, bothof you & BoD were really surprised with this result?
– We were not surprised with ty le keo bongso88 auction results, but we impressed with ty le keo bongso88 number of auction registrations that nearly 5 times higher than ty le keo bongso88 selling volume. Prior to ty le keo bongso88 IPO, many investors who participated in this auction had earlier discussed and worked with APH. Therefore, we foresaw ty le keo bongso88 price they were willing to pay.
In ty le keo bongso88 recent IPO, APH has been highly priced. It can also be seen that many investors are interested in APH’s stock and AnBio compostable material manufacturing plant. That is a good sign.
Calculation methods indicate that ty le keo bongso88 book value of An Phat Holdings as of December 31, 2019 at only VND 15,300, while other calculating methods point out market value of An Phat Holdings at around VND 23,800 per share. So, in your opinion, what are ty le keo bongso88 reasons for investors to pay more than VND 50,000 per share, much higher than ty le keo bongso88 valuation of ty le keo bongso88 other companies in ty le keo bongso88 same industry?
-According to ty le keo bongso88 statistics of ty le keo bongso88 listing consultant, ty le keo bongso88 average P/E ratio of ty le keo bongso88 domestic and regional plastic industry is about 11.17x. With 2019 EPS is VND 3,433 per share, based on ty le keo bongso88 company’s P/E ratio, ty le keo bongso88 valuation of APH is VND 38,344 per share. However, I believe that investors buying a stock not only based on historical data but also its future prospect. Therefore, when investors paid more than VND 50,000 per share, it represents investors’ confidence in ty le keo bongso88 growth prospects of APH as well as our subsidiaries.
Though securities market now has recovered slightly, but it is still very unpredictable. In ty le keo bongso88 past, there were many successful IPO with high bid prices, but when listed, ty le keo bongso88 stock price will plunge in ty le keo bongso88 first few session. What is your opinion on this matter?
-Listing immediately after ty le keo bongso88 IPO is an usual and common activity in developed stock markets to mitigate ty le keo bongso88 risk after investors participating in ty le keo bongso88 IPO, so that they can trading stocks as soon as possible.
APH aims to issue and prioritize majority of shares for institutional investors who aim to hold stock for a long-term. We strongly believe that their long-term commitment with businesses will help reduce price variation.
In addition, when AnBio comes into operation, it will contribute significantly to ty le keo bongso88 company’s business results.
In stark contrast with other businesses, APH chose to IPO and listing at this sensitive period. In comparison with state-owned enterprise, it seems that equitization activities, IPOs will be delayed due to COVID-19. Sir, what is ty le keo bongso88 reason behind this scenery?
-We have a clear goal of raising capital for AnBio plant. Capital from ty le keo bongso88 IPO will be retained to increase ty le keo bongso88 surplus and value for ty le keo bongso88 company. This project is indispensable and crucial in APH’s development plan, thus it is suitable to implement at this time.
Moreover, COVID-19 has been well controlled in Vietnam. Vietnam has also become a bright spot in ty le keo bongso88 world after successfully contained ty le keo bongso88 pandemic. ty le keo bongso88 fewer businesses listed at this time, ty le keo bongso88 more prominent we become to lure more investors.
During ty le keo bongso88 time combating COVID-19, we still ensure production and business activities. As a result, when ty le keo bongso88 pandemic is under control, APH is ready to welcome investors, especially foreign investors, who are increasingly considering Vietnam as an attractive destination.
Sir, as it is known that APH will spend 15.75 million shares to sell to strategic investors. Could you please reveal more information about potential investors as well as their strengths to support ty le keo bongso88 company in business operations and market expansion in ty le keo bongso88 future?
We spend majority of this issuance for strategic investors while targeting long-term financial investors.
Reputable and experienced long-term financial investors in developed and developing countries will bring long-term, stable financial support to us.
On ty le keo bongso88 other hand, strategic investors will offer recommendation about project implementation such as: implementing and working with contractor, reaching potential customers, expanding product consumption markets, technology and operation support.
Currently, APH is working with 7 investors, of which 5 are long-term financial institutions and two strategic investors. Investors are all from foreign countries like Korea, Japan, Germany and some multinational organizations.
- Strategic move to conquer North American market
Sir, as far as I know, APH Board of Directors has had many working trips in ty le keo bongso88 US to prepare for ty le keo bongso88 plan to develop market for compostable products. Could you reveal what has been achieved and ty le keo bongso88 company’s goal in ty le keo bongso88 coming time?
We consider ty le keo bongso88 US as a huge potential market for ty le keo bongso88 development of compostable products. APH has had many working trips with organizations in ty le keo bongso88 US, including strategic advisory firm ty le keo bongso88 Asia Group.
At present, we have established a company in ty le keo bongso88 US and we are forming plan to penetrate this market. In my opinion, social instability is temporary and ty le keo bongso88 impact of ty le keo bongso88 COVID-19 will not halt ty le keo bongso88 medium to long term growth trend of eco-friendly products here.
Sir, might you give an overview of ty le keo bongso88 attractiveness of compostable products market in Europe and ty le keo bongso88 US, where you have been selling your products?
-Our overseas market has expanded significantly, from 5 countries (in 2019) to more than 20 countries at present, including ty le keo bongso88 US, Canada and other European countries. This is a very potential market when these countries tend to switch gradually to environmentally friendly products. Since then, compostable products are perfect replacement.
According to research, in ty le keo bongso88 next 3-5 years, environmentally friendly products will account for 20-30% of total plastic products worldwide.
We have solved ty le keo bongso88 puzzle for compostable product price in best way. Therefore, in order to catch up with this global trend, we decided to invest in AnBio compostable plant, taking ty le keo bongso88 initiative in materials, reducing production cost and creating more competitiveness for APH. Many familiar customers in these markets now have shifted to our compostable products.
ty le keo bongso88 potential of ty le keo bongso88 North American market as mentioned is enormous. But this is also certainly a very competitive market. Sir, what do you think about ty le keo bongso88 opportunities & challenges for APH compared to competitors in this market?
-ty le keo bongso88 North American market is larger than both Europe and Japan. Moreover, we can see ty le keo bongso88 quick trend shifting to environmentally friendly products here.
At this moment, this market is competing for ty le keo bongso88 supply of environmentally friendly products in ty le keo bongso88 direction that benefit APH when we are one of ty le keo bongso88 few enterprises in ty le keo bongso88 world holding ty le keo bongso88 patent for manufacturing compostable materials.
Sir, you have just mentioned “ty le keo bongso88 patent for manufacturing compostable materials”, so what are ty le keo bongso88 outstanding features of this project?
-We will have raw materials self-supply for production from ty le keo bongso88 first to ty le keo bongso88 last stage instead of importing raw materials from aboard to manufacture finished products.
So, what role will AnBio play in APH production system?
– This will be ty le keo bongso88 first compostable material manufacturing plant in Vietnam that can supply and meet ty le keo bongso88 demand for both domestic and foreign markets. ty le keo bongso88 factory will completely change APH’s position, to be both a producer and a trader of green materials.
There have been a number of large partners in Vietnam coming to APH and questioning ty le keo bongso88 trade of AnBio compostable material. Our goal of becoming Southeast Asia’s largest bioplastic group is in ty le keo bongso88 near future.
Sir, according to ty le keo bongso88 calculation of ty le keo bongso88 investment project, what is ty le keo bongso88 internal rate of return (IRR) of this project? In comparison with other plastic and packaging projects that APH has invested, are ty le keo bongso88 profit margins superior?
-ty le keo bongso88 rate of return of ty le keo bongso88 project is 36% according to our estimates. Overall, this project is extremely important because it will help increase ty le keo bongso88 efficiency of subsidiaries by helping reduce input costs and increase profit margins. ty le keo bongso88 rate of return on a (consolidated) perspective of ty le keo bongso88 Group is much higher than previous projects.
We are currently importing materials from Europe, manufacture products and then exporting them back to Europe. ty le keo bongso88 raw materials self-supply will help APH save production costs about 30% for subsidiaries while ty le keo bongso88 parent company still enjoys a gross profit margin of 25-30% of this project.
- Difficulties provide a window of opportunity
Until now, we all know how COVID-19 has negatively impacted on ty le keo bongso88 world economy while America is one of ty le keo bongso88 most impacted countries and now concerns about ty le keo bongso88 second wave of COVID. Thus, APH may encounter many difficulties in ty le keo bongso88 coming time. Sir, will epidemics affect ty le keo bongso88 progress and investment plan of ty le keo bongso88 company?
– It can be said that COVID-19 influences our outreach activities and seeking new customers in this market. But ty le keo bongso88 North American development plan is a long-term one, and we believe that Covid-19 will soon be contained here. Furthermore, ty le keo bongso88 use of environmentally friendly products is an inevitable trend, so in ty le keo bongso88 long-term, there is nothing to be worried about.
Sir, can you disclose about ty le keo bongso88 business situation of ty le keo bongso88 two prominent subsidiaries (AAA and NHH) in ty le keo bongso88 first 6 months. Is ty le keo bongso88 influence of COVID-19 significant, especially on AAA’s international trade, or with NHH’s industrial supporting equipment production?-As we mentioned in ty le keo bongso88 media earlier, ty le keo bongso88 production of AAA has not decreased in quantity, especially ty le keo bongso88 compostable products segment is still growing because these are essential consumer products.
Supporting industry is also affected by Covid-19 due to some customers suspending production but we forecast to grow strongly in ty le keo bongso88 last 6 months.
What did APH Board of Management do to help subsidiaries overcome difficult times, especially to help them rebound when ty le keo bongso88 market recovers?
-I hold ty le keo bongso88 belief that “fire proves gold, adversity proves men “, we have nearly 20 years of experience in ty le keo bongso88 market, facing many challenges but we overcame those obstacles to grow. I think that, under any circumstances, difficulties provide a window of opportunity. ty le keo bongso88 recent successful IPO of APH is a testament to this. During tough times, we have been doing very well. So, there is no reason when ty le keo bongso88 market recovers, we could not do better.
Thank you very much.
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