VietJet Aviation Joint Stock Co yesterday surged by the 20 percent daily limit in its trading debut on the Ho Chi Minh City Stock Exchange , reflecting investor interest in Vietnam’s first main board-listed carrier as travel demand soars in the nation.
The stock jumped to 108,000 dong at the midday break, valuing the low-cost carrier at 32.4 trillion dong (US$1.4 billion) and exceeding the market values of some rivals, such as Asiana Airlines Inc.
VietJet, known for marketing stunts such as bikini-clad flight attendants, listed 300 million shares after an initial public offering (IPO) at 90,000 dong per share.
“The surge was already anticipated, as the initial price was quite cheap and this is an attractive company with a positive growth story,” ACB Securities JSC Ho Chi Minh City-based analyst Tran Thi Hai Yen said.
Rising living standards and more affordable tickets from budget carriers such as VietJet as the nation gradually liberalized its aviation market have helped boost demand for air travel.
Vietnam will continue to see a double-digit increase in passenger numbers over the next decade, after annual growth of 17 percent in the past decade, ACB Securities said in December last year.
The listing by Vietnam’s only privately owned carrier will also boost the size and liquidity of the country’s US$96 billion stock market, Southeast Asia’s second-best performer this year behind Singapore’s Straits Times Index.
Vietnam Airlines Joint Stock Co in 2014 sold shares and currently trades on the regulated over-the-counter UpCom market in Hanoi, Vietnam.
Ho Chi Minh City Securities Co placed fair value for VietJet at 100,000 dong per share, it said in a Feb. 7 note.
VietJet is the leading low-cost carrier in a country at the beginning of a long-term growth cycle with a compound annual growth rate of passenger volume forecast at 14 percent, the note said.
The airline has efficient cost management and potential to improve per passenger ancillary revenue, it added.
VietJet’s core customers are working-class Vietnamese with low-to-medium incomes and an increasing demand for air travel, ACB Securities said.
GIC Pte, Singapore’s sovereign wealth fund, is VietJet’s largest shareholder after billionaire founder and CEO Nguyen Thi Phuong Thao, who has a stake of more than 60 percent held directly and through holding companies and other entities, exchange filings showed.
“I’m very happy that VietJet managed to reach an international pool of investors,” Thao said after the listing event. “The context of Vietnam is extremely favorable to investors and I believe that the IPO of VietJet will have a good impact on future IPOs.”
VietJet’s profit this year is poised to rise 30 percent from 2.3 trillion dong last year, the carrier forecast in January.
The airline projected its passenger numbers would also climb 30 percent this year, from 15 million last year.
Vietnam’s VN Index has climbed 7.7 percent this year, outpacing the 6 percent advance in the MSCI South East Asia Index. The Vietnamese gauge yesterday fell 0.2 percent at the 11:30am break.
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