Monday, 18 Dec 2017
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INVESTMENTOPPORTUNITIES

Leading Vietnam's brewer Sabeco: 54% shares up to sale

Updated at Wednesday, 29 Nov 2017, 16:52
The Hanoitimes - Vietnam will kick off the sale of 54% of Sabeco, the country’s biggest brewer and the maker of Bia Saigon and 333 beers on December 18, in an ambitious deal the government hopes will raise at least 109 trillion VND or 5 billion USD.
Saigon Beer Alcohol Beverage Corp (Sabeco) is Vietnam's leading beer producer. It is owned and under the authority of Vietnam's Ministry of Trade and Industry. In 2011, Sabeco produced 1.2 billion liters of beer, 51.4% of the national market. Its main brands are Saigon Beer and 333 Beer. Sabeco has several regional subsidiaries throughout Vietnam.
 
The minimum price for Sabeco’s sale was set at 320,000 VND a share.
The minimum price for Sabeco’s sale was set at 320,000 VND a share.
As such, the total shares of Sabeco up to sale are 343,662,587, which are equivalent to 53.59% of Sabeco, so the total divestment from the government is nearly 5 billion USD. With this being said, the mininum price for Sabeco’s sale was set at 320,000 VND a share, trade ministry official Truong Thanh Hoai told a news conference on Wednesday, days after the company held investor roadshows in Singapore and London. 

The initial price was determined based on the principle of taking the highest price among 3 options. With this being said, the average referring price after 30 trading sessions in the stock market before releasing sale information is 281,500 VND per share. The highest price valued by consultant is 184,700 VND per share, and the price after the most recent session is 320,000 VND per share. The long-awaited sale has already attracted interest from brewers seeking access to what is the second-most profitable market for Heineken NV, which holds 5 percent of Sabeco.

But analysts said the tripling of Sabeco’s share price to 340,000 dong ($14.96) from its December 2016 listing, and a foreign ownership limit of 49 percent could deter some global brewers from participating in the auction. The sale could provide a blueprint for other privatizations which Hanoi is considering as part of broader economic reforms, including that of peer Habeco, in which Danish brewer Carlsberg A/S owns 17.3 percent.“The big sale is to increase the attractiveness,” Hoai said.

Foreigners already owned over 10 percent in Sabeco, and the total limit for such ownership was still capped at 49 percent, he said. The government owns nearly 90 percent of Sabeco and analysts said the low float had inflated the market value. “Through the two recent roadshows, we saw a very high level of interest. Most investors highly valued Sabeco’s business performance and the potential of the beer market,” Sabeco Chairman Vo Thanh Ha told reporters.

Vietnam is on track to become Asia’s biggest per-capita beer market by 2021 and is shaping up as a battleground for global brewers thanks to a youthful population and beer-drinking culture. However, Sabeco’s valuations have soared, with its shares trading at a price-to-earnings multiple of 49 compared with 20 for Japan’s Asahi Group Holdings, 17 for Thai Beverage PCL and 15 for Japanese brewer Kirin Holdings, Thomson Reuters data showed.

On Wednesday, the president of the Philippines’ San Miguel Corp said the conglomerate was looking to bid for Sabeco. Kirin was also interested and would make a decision once sale details were finalized, a spokesman said this week after the Singapore roadshow.
Nguyen Tung
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