Vinhomes finalises timeline for Vietnam’s largest treasury share buyback

In the repurchase announcement dated October 11, Vinhomes set the buyback period for 370 million treasury shares from October 23 to November 22.

“The purpose of the buyback is due to the current market price of Vinhomes shares named VHM being below their intrinsic value, and the buyback aims to protect the interests of the company and its shareholders. The funding for the repurchase will come from undistributed after-tax profits, as stated in the audited financial statements for 2023. The repurchase will be conducted via order matching and negotiated transactions through securities companies, in compliance with legal regulations,” Vinhomes JSC stated in its report.

The buyback plan was approved by Vinhomes' general meeting of shareholders through a written resolution on September 4.

According to the plan, Vinhomes will repurchase up to 370 million treasury shares, equivalent to 8.5 per cent of the total outstanding shares. If the maximum number of shares is repurchased, Vinhomes' charter capital will decrease from aroundr $1.81 billion to $1.66 billion.

On October 11, the State Securities Commission of Vietnam confirmed that it had received the report on the share buyback plan from Vinhomes JSC.

Since the announcement of the plan in early August, VHM's share price has seen significant growth of approximately 33 per cent. Consequently, the company's market capitalisation has increased by more than $2 billion over two months, reaching approximately $8 billion. This surge has propelled Vinhomes past VietinBank to reclaim its position as the fourth largest listed company in Vietnam, behind only Vietcombank, BIDV, and FPT.

As of the close of trading on October 14, VHM's share price stood at $1.89 per share, marking a 4.01 per cent increase compared to the previous session.

At this price level, the real estate giant would need to spend over $666.67 million to complete the aforementioned share buyback. This would make it the largest share buyback transaction in the history of the Vietnamese stock market.

The last time Vinhomes conducted a share buyback was in 2019 when it repurchased 60 million shares at an average price of $3.85 per share, citing a similar reason. By 2021, as the price of VHM shares rose above $4.58 per share, Vinhomes sold all of its treasury shares to supplement working capital.

According to a notice from the Ho Chi Minh City Stock Exchange (HSX) on October 8, the record date for the second written consultation of Vinhomes JSC's shareholders in 2024 is October 23, with the ex-dividend date set for October 22. The consultation period will run from October 23 to November 23.

Vinhomes will also finalise the shareholder consultation rights. The specific content of the consultation has not yet been disclosed.

This consultation follows approval from the Vietnam Exhibition and Fair Centre Corporation for signing a business cooperation contract with Vinhomes to develop Vinhomes Global Gate, which is also known as the Vinhomes Co Loa project.

Deputy Prime Minister Tran Hong Ha on July 13 approved a Vinhomes' investment proposal for a new industrial park in Ky Anh town, with a total investment of over VND 13.2 trillion ($528 million).

Vinhomes, a prominent Vietnamese property developer, has initiated an ambitious expansion drive with several large-scale urban projects, aiming to transform the residential landscape across various regions in Vietnam.

Vinhomes, the leading real estate developer backed by Vingroup and primary investor of the Vinhomes Central Park residential project in Binh Thanh district, has formally proposed the handover of routes D1-D19 situated along the Saigon River, upon the project's finalisation.