EVNGENCO 2 to sell over 581 million shares through IPO
Power Generation Corporation 2 (EVNGENCO 2), a subsidiary of Vietnam Electricity, plans to sell over 580.12 million shares, or 48.8875 per cent of its charter capital, to investors and over 1.33 million shares, or 0.1125 per cent, to employees.
An initial public offering will be held at the Ho Chi Minh Stock Exchange, with the shares auctioned at a starting price of VND24,520 (US$1.06).
EVNGENCO 2 held an IPO road show in HCM City on January 21 to tell investors about the opportunity for investing in the company.
It saw the participation of representatives from the Government Office, ministries, the State Securities Commission, the Hanoi and Ho Chi Minh City stock exchanges, Vietnam Electricity, economists, energy experts, representatives of auditing and securities companies, and potential investors.
The company was valued at VND46.1 trillion ($2.01 billion) as of January 1, 2019, with the Government’s stake being worth more than VND26.6 trillion.
Fully owned by EVN, EVNGENCO 2 has seven dependent accounting units, holds 100 per cent stake in one company and at least 51 per cent in five others, which are operating in various fields ranging from hydroelectricity to thermal power.
According to Associate Professor Dr Vu Minh Khuong of the National University of Singapore, the equitisation of EVNGENCO 2, 100 per cent owned by EVN, attested to the efforts to reform the power sector and offers valuable investment opportunities to investors.
“EVNGENCO 2 has an important position in the power sector, good business efficiency, healthy finance, and competent staff. As of the end of 2020, EVNGENCO 2 had an installed capacity of 4,461 MW, accounting for 6.4 per cent and 15.1 per cent of the country’s total installed capacity and EVN’s total installed capacity.”
Its return on equity was around 10 per cent in 2018 and 2019, which is high for the sector, he said.
In terms of finance, equity accounts for more than a third of total assets, which is considered healthy in the power sector, he said.
“EVNGENCO 2 has great potential for growth.”
With a number of power plants in strategic locations across the country, EVNGENCO 2 would achieve very high growth in future, he said.
“In addition, with its efforts to embrace digital transformation and apply new technologies, EVNGENCO 2 is expected to make great strides in improving its production efficiency in the next three to five years, especially operational efficiency and significantly reducing the environmental impacts of coal-fired thermal power plants, which currently account for 50.7 per cent of its total generation capacity.”
It has also actively invested in clean energy projects across the country, he said.
It recently completed 50 MWp solar power projects, and is in the process of building wind power plants with a capacity of 55 MW, and is applying for investment policies for eight new power projects with a total capacity of 2,593 MW comprising six solar power plants and two thermal plants.
Its strategies for the future include focusing on improving operational efficiency at existing plants and stepping up investment in renewable energy, Khuong said.
In addition, people investing in EVNGENCO 2 would greatly benefit not only from EVNGENCO 2's own rapid growth but also Viet Nam's.
Tran Phu Thai, EVN GENCO 2’s chairman of the board of members, said, “EVN GENCO 2 has strived to become a leader in the electricity generation sector in Viet Nam and a socially and environmentally responsible company.”
Duong Quang Thanh, EVN’s chairman of the board of members, said EVN GENCO 2 always enjoyed good profits since it was established in 2013.
The power sector is expected to sustain at least 10-12 per cent growth in generation capacity for the next 20-30 years to meet the country’s demand, offering investors a great opportunity, he said.