Consequently, its pre-tax profit is estimated to reach VND204 billion (US$9 million), down 57% year on year, said the compnay's production and investment plan recently released.
Genco 3 remains cautious over profit target in 2018.
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Genco3's total investment in 2018 is reported at VND19.1 trillion (US$841.3 million), in which payable debt accounted for VND4.8 trillion (US$211.4 million), while the remaining is set for investment.
Genco3 made debut on UPCoM in March 21 with its reference price at VND24,800 (US$1.09) per share. For the total share amount of 2.08 billion, Genco 3's market capitalization is estimated at VND51.5 trillion (US$2.25 billion).
Genco 3 raises VND184.8 billion (US$8.13 million) from the initial public offering (IPO) on February 9. The proceeds were a measly 3% of the government's target of raising at least VND6.5 trillion ($286 million) from the stake sale. Reflection low investor interest, only 7.45 million shares of the 267 million on offer were sold in the auction.
The Ho Chi Minh City Stock Exchange (HOSE) earlier said in a statement published on its website that a total of 336 investors had registered interest in only 2.8% of the stakes-amounting to less than 0.36% of the company-by the February 1 deadline. According to analysts, the disappointing results were due to Genco 3 being overvalued.
Genco 3's prospective price-to-earnings (P/E) valuation is 19 times, higher than the 15 times average reported by regional peers and the 13 times of state electricity producer and distributor PetroVietnam Power (PV Power)'s IPO.
After the IPO, Genco 3's charter capital is expected to increase from VND10.56 trillion (US$464.6 million) to VND20.8 trillion (US$915.2 million), equivalent to over 2.08 billion shares, of which Vietnam Electricity (EVN) will hold 51%. The company will then sell 36% to strategic investors and 0.16% for its employees.
The disappointing auction followed the IPO of Vietnam Rubber Group (VRG) on February 2 that saw the government raise VND1.31 trillion (US$57.7 million), far lower than its expectations of at least VND6.2 trillion (US$273.1 million).
Its total capacity reached 6,304MW, accounting for 16% of the national electricity system. The total capacity of the 4 Phu My Thermal Power Plants operated by Genco 3 (Phu My 1, Phu My 2.1, Phu My 2.1 Extension, and Phu My 4) is 2,540MW alone.
