27 July 2022
Transport Development and Investment Joint Stock Company (Tracodi, stock code TCD) is extending its growth momentum due to many favorable factors.
A boost from the construction segment
The government is promoting the disbursement of public investment capital, which is beneficial for business like Tracodi.
"Disbursement of public investment capital will increase in the second half of 2022 when the prices of many commodities show signs of peaking and the economic stimulus package of more than 113,000 billion dong began from April", VNDirect Securities Company said.
In fact, at the Ministry of Transport alone, in the first 5 months of 2022, the volume reached VND 15,080 billion, equivalent to 34.9%. For 12 sub-component projects under the Eastern North-South expressway, phase 2, the National Assembly has approved the entire public-investment projects. The government is finishing relevant documentation and procedure so that the projects can start in 2022 and are expected to be completed in 2026.
Currently, Tracodi is restructuring its capital structure through divestments. In June, the Company transferred 60 million shares of BCG Land, reducing its ownership from 22.5% to 9.4%. At the same time, the company also sold all 700,000 shares, equivalent to 70% of the charter capital of Tracodi Labor Export Joint Stock Company. This July, Tracodi transferred all 20 million shares in Indoba Trading Joint Stock Company (56.34%).
Focusing on its core business, Tracodi sees a huge potential in residential real estate in Vietnam. It is known that the value of Tracodi's future contract value as of May 2022 was VND 8,500 billion.
Yuanta Securities Vietnam expects Tracodi's revenue from construction to grow sharply in the second and third quarters of this year, mainly from real estate projects, especially the Malibu Hoi An, Hoian d'Or, King Crown Infinity. In addition, the divestment in the second quarter was expected to bring in about VND 300 billion in financial profit.
Other businesses are still growing
This year, Tracodi has set an ambitious business plan, with revenue of 4,431 billion dong, profit (after tax) reaching 507 billion dong, up 42% and 51% respectively compared to 2021. According to the company's leaders, the business performance is going right.
The quarrying segment, which has been a stable source of income for Tracodi for a long time, also sees potential growth thanks to the fact that the exploration of Antraco mine has been approved by the An Giang Provincial People's Committee (the second phase). It has a reserve of 25 million m³ and can be exploited in 10 - 15 years. The construction segment is thriving due to major projects such as King Crown City, King Crown Park, King Crown Infinity, BCG CME Long An 1-2-3 renewable energy projects, Khai Long 1-2-3 (wind power projects)…
In the first quarter this year, Tracodi completed the issuance to existing shareholders to increase charter capital to VND 1,744 billion. However, The ambition of its business leaders is to continue to increase capital to VND 5,156 billion by the end of 2022, through a issuance of 50 million more shares, converting VND 250 billion of bonds into shares, and issuing 1.6 million ESOP shares, paying dividend 5% share and offering to existing shareholders at the ratio of 1:1 (expected to be in the third quarter). If the plan is a success, the company will have a large capital to get more deeply involved in the infrastructure construction - real estate, improve production - business efficiency, accelerate the annual growth rate. Consolidated profit in the first 6 months of 2022 is expected to reach over VND 366 billion, more than 72.1% of the plan.
Started listing on the stock market since 2017, Tracodi is famous for its continuous innovation and business performance. Over the past 4 years, its average annual growth rate has been over 60%. After-tax profit in the last two years increased dramatically. In 2021, the company reached a record of (after-tax) profit of VND 335 billion, an increase of 129% compared to 2020.