Vietnam ma research report 2016

StoxPlus is pleased to introduce Vietnam MA Research Report 2016, the 6th issue on this industry. This report presents a board range of topics, both sectorspecific and crosscutting market issues. In addition to the MA data mining, we also focus on MA opportunities and capital flows into Vietnam thanks to a number of FTAs, namely VietnamSouth Korea FTA, TPP. Our MA report utilized extracted database with over 5 years of historical data in Vietnam. In addition to data analysis, the report also relies on the authors extensive knowledge and experience in advising deals in Vietnam. We strongly believe that this report will be valuable to institutional investors, investment companies and foreign players who are considering MA as a strategy to set a foothold or to expand your businesses in Vietnam. Below are the most critical findings in our 6th issue: 1) Vietnam MA continued its upward trend: Vietnam MA in 2015 recorded 341 deals with total value of US5.20bn. This indicates a 23.1% increase in terms of number of deals (compared to 277 deals in 2014) and 9.7% increase in deal value (compared to US4.74bn). 2) Inbound MA into Vietnam accounted for 46% of MA deal value and totaled US2.42bn in 2015, 21% lower than in 2014. There were only 98 inbound deals originated by investors from familiar countries such as Hong Kong, Thailand, Japan, South Korea, US, Malaysia and Singapore. 3) Domestic MA was also busy with total deal value of US2.70bn. For domestic MA, the most favored sectors include: (i) Banks, (ii) Real Estate with 29 deals totaling US776.7mn, and (iii) Food Beverage with 37 deals valued at US449.0mn. The acceleration in banking MA was due to the financial sector restructuring as set out in Decision No. 254QĐTTG. Bank MA is expected to continue in 2016. 4) 2015 marked the year of Vietnam’s further integration into the global market with many new FTAs signed. Viet Nam concluded negotiations for four free trade agreements (FTAs), including those with the Eurasian Economic Union, the European Union, South Korea and the TransPacific Partnership, during 2015. FTAs are likely to boost capital flows into Vietnam in the coming time, both in terms of trading as well as investment, including MA activities. 5) Capital flow from Japan has dropped in recent years, but is expected to bounce back after TPP is signed. In 2015, twoway trade between Vietnam and Japan totaled US24bn, with Vietnam experiencing a trade surplus. Due to TPP and removed tariffs, trade activities will likely increase, especially seafood exported from Vietnam and plastic products imported from Japan to Vietnam. 6) Thailand investors have been increasing investment in Vietnam for years, and are expected to do so after AEC is established. Vietnam has become a favorite investment destination of Thai firms, especially in Industrial Goods and Retail. 7) In our last issue of Vietnam MA report, we have analyzed very detailed opportunities from privatization of SOEs. As SOE IPOs accelerated in 2015, many opportunities have been realized. During 2015, there were 104 SOE IPOs, accounting for 40.0% of 289 IPOs targeted for the year. The most active sectors for IPOs include (i) industrials, (ii) consumer goods and (iii) consumer services, accounting for 85% total IPO deals. 8) 2015 also marked significant improvement in legal framework on foreign investment, supporting MA activities in the coming years. For onthe–stockmarket MA, Decree 602015NDCP relaxed the thresholds for foreign ownership. Depending on the target company’s business lines and its shareholders’ approval, these changes could enable foreign investors’ acquisition of up to 100% of a local company’s charter capital. See more at: http:stoxresearch.comReports158vietnammaresearchreport2016.aspxsthash.LXpX19ZS.dpuf

Trang 1

Thuan Nguyen, FCCA

Hai Khieu

Research AssociateStoxPlus Corporationhai.khieu@stoxplus.com+84(4) 35626962 (ext 108)

Anh Nguyen

Research AssociateStoxPlus Corporationanh.phuong@stoxplus.com+84(4) 35626962 (ext 108)

M&A Opportunities from Global Integration

Vietnam M&A Research Report 2016 – Issue 6

08 January 2016

Trang 3

Vietnam M&A Research Report 2016 | Issue 6 | 8 January 2016

We are pleased to bring you the Vietnam M&A

Research Report 2016 (Issue 6) In addition to

the M&A data mining, we also focus on M&A

opportunities and capital flows into Vietnam

thanks to a number of FTAs, namely

Vietnam-South Korea FTA, TPP

Our M&A report utilized extracted database

with over 5 years of historical data in

Vietnam In addition to data analysis, the

report also relies on the authors extensive

knowledge and experience in advising deals in

Vietnam We have surveyed relevant foreign

and local institutional investors as well as

conducting a number of in-depth interviews in

with experienced M&A advisers and

Government officials in during our

preparation

We strongly believe that this report will be

valuable to institutional investors, investment

companies and foreign players who are

considering M&A as a strategy to set a

foothold or to expand your businesses in

Vietnam

About StoxPlus

This report is prepared by a team of experienced analysts, researchers and data clerks at StoxPlus StoxPlus is a leading financial and business information provider in Vietnam Our services include provision of high quality data feeds, analytic tools and market research

StoxPlus is now serving a client portfolio of over 100 corporate data clients including securities companies, research houses, asset managers, investment companies, and thousands of sophisticated individual investors

Our Research division has been established as

an independent research house in Vietnam to provide local insights to our clients at quality standards of the World’s prestige advisory firms More details can be found at

www.StoxResearch.com

If you have any questions about this report or our services, please don not hesitate to contact Thuan Nguyen, CEO of StoxPlus at thuan.nguyen@stoxplus.com or +84- 4-3562

6962, ext 111

Trang 4

1 AEC ASEAN Economic Community

2 AnDate Announcement Date

3 ASEAN The Association of Southeast Asian Nations

4 BOD Board of Directors

5 CAGR Compounding Annual Growth Rate

6 CF Consumer Finance

7 ECs Economic Corporations

8 EGs Economic Groups

9 FTAs Free Trade Agreements

10 GCs Government Corporations

11 GRDI Global Retail Development Index

12 GSO General Statistics Office

13 HNX Hanoi Stock Exchange

14 HOSE Ho Chi Minh City Stock Exchange

15 IPSI Industrial Policy and Strategy Institute

16 MAC Middle and Affluent Class

17 MARD Ministry of Agriculture and Rural Development

18 MM Money Market

19 MNCs Multi-National Corporations

20 SBV The State Bank of Vietnam

21 SCs State Corporations

22 SEGs State Enterprise Groups

23 SOE State-Owned Enterprise

24 SSC State Securities Commission

25 TBT Technical Barriers to Trade

26 WEF World Economic Forum

Acronyms

Trang 5

Sources and Completeness of Data

• Data works in Vietnam are actually a very tedious and time consuming job due to lack of a sound reporting system and regulations This is particularly true for M&A activities In many case where the seller finds it positive for their public relation or investor relation works, they would be proactive in spreading the news.

• In many cases, including the public and listed companies, we found it hard to obtain an official explanation in a deal that has been actually concluded This is particularly true in Real Estate sector where it is sensitive from tax perspective if the deal value and details are announced.

• As such, we combine a variety of sources and data mining skills to uncover as many as possible unannounced M&A deals that have happened Even though our database is yet comprehensive, we believe our methodology is as exhaustive as possible to identify M&A deals in Vietnam.

Public domains

Unannounced deals – Surveyed by StoxPlus

Unannounced deals – Unidentified

(Unknown unknown)

Trang 6

Sources and Completeness of Data

• Our sources of M&A data include:

• Public information and media releases;

• Data announced by reliable portals such as Bloomberg and Thomson Reuters;

• Large shareholder transactions on HOSE and HNX from Fiinpro platform;

• Review changes of management team of all public companies from Fiinpro platform;

• Data mining from financial statements of large corporations in Vietnam;

• Press release from all private equity funds.

• We believe that our database might not include all M&A transactions but it is the most comprehensive in Vietnam and have covered all the market in all material aspects.

Deal Value

• If deal value is not publicly and explicitly disclosed, we calculate the deal size from deal parameters such as purchase price per share We also obtained deal size and value from our intelligent network where possible

Deal Valuation Multiples

• In calculating price earning ratio (P/E), we use the acquiree latest EPS For deal P/B,

we take the deal price divided by book value per share in a pre-deal basis, this means the cash proceed from the transaction is not included in the book value

Sector Classification

• We adopt the Industrial Classification Benchmark (ICB) for all sector classification.

Our Methodology

Trang 7

• This material is prepared by StoxPlus Corporation for information purpose

only This material is not intended to recommend or suggest any

particular transaction.

• Any information contained in this material shall be used at your own

discretion and risk StoxPlus Corporation will not be subject to any

liability for any consequence caused by the information contained in this

material

• This material may be changed without any prior notice Content of this

material may be changed according to any changes in the situation, or

effects of the additional information after its preparation, and StoxPlus

Corporation shall undertake no obligation to update, revise or

complement the content of this material according to the changes

• While this material is prepared based on the public information and other

information StoxPlus Corporation duly obtained, StoxPlus Corporation has

not independently verified its accuracy, completeness, or suitability for

your use, also shall not guarantee them.

• StoxPlus Corporation reserves the copyright of this material This material

is protected in accordance with the copyright laws of Vietnam and other

countries, as well as the treaty provisions regarding the copyrights signed

between Vietnam and other countries For any purpose whatsoever, no

one shall be entitled to duplicate, summarize, quote, or reprint this

material, or disclose it to the third party without StoxPlus Corporation’s

prior consent

Trang 8

Executive Summary

Vietnam M&A continued its upward trend: Vietnam

M&A in 2015 recorded 341 deals completed with total

value of US$5.20bn This indicates a 23.1% increase in

terms of number of deals (compared to 277 deals in

2014) and 9.7% increase in deal value (compared to

US$4.74bn)

Small and medium deals still dominated the market

Particularly, M&A deals with value less than US$25mn

stayed at 288 out of 341, equivalent to 84% of total

deal number

Inbound M&A into Vietnam accounted for 46% of

M&A deal value and totaled US$2.42bn in 2015, 21%

lower than in 2014 There were only 98 inbound deals

originated by investors from familiar countries such as

Hong Kong, Thailand, Japan, South Korea, US, Malaysia

and Singapore In terms of deal volume, Japanese were

the most active investors with 15 inbound deals,

totaling US$310.4mn, or 12.8% of total inbound value

In terms of deal value, Hong Kong investors topped

with 05 Real Estate deals, 02 Retail deals and 01 Travel

& Leisure deal, having total investment of

US$1,101.5mn or 45.5% total inbound M&A deal value

Trang 9

Capital flow from Japan has dropped in recent years,

but is expected to bounce back after TPP is signed.

In 2015, two-way trade between Vietnam and Japan

totaled US$24bn, with Vietnam experiencing a trade

surplus Due to TPP and removed tariffs, trade

activities will likely increase, especially seafood

exported from Vietnam and plastic products imported

from Japan to Vietnam

Japanese firm could increase investment in textile,

which is the top sector from Vietnam to Japan

currently One such case is Itochu, who invested 5% in

Vinatex – the leading textile corporation in Vietnam –

back in 2014 After the deal, Itochu continued to sign a

business alliance with Vinatex to build its capacity on

dyeing and textile materials production The reason is

to take advantage of TPP and country of origin

(“COG”) requirement Currently, Vietnamese

companies imported most of the textile materials If

the materials are not made in Vietnam, the product

cannot meet the COG requirement of TPP and thus

export taxes would still be applied Therefore, the

investment of Itochu in Vinatex made sense in order

for them to take advantage of TPP’s removed tariffs

Top 5 export sectors from Vietnam to

Japan by value (US$mn)

2,620 2,065 1,431 1,195 1,502

1,774 1,255

932

650

490

- 500 1,000 1,500 2,000 2,500 3,000 Textile products

Transportation vehicles & parts

Machinery & parts

Seafood products

Crude Oil

8M2015 2014This page is intentionally removed for demo purpose

Trang 10

Section 1: Vietnam M&A Activity Review

1.1 Vietnam M&A Activities Review

1.2 Inbound M&A 1.3 Domestic M&A 1.4 Outbound M&A

Trang 11

M&A activity in Vietnam has been on an upward trend

Global M&A deals are on an

upward trend with forecasted

deal value of US$4.1 trillion in

2015 The strength of BOM,

regulatory pressures and

economic patterns — GDP

growth, equity market stability

and cost of capital — will be

the key factors to support or

disrupt the projected growth

In this respect the recent full

value of major equity market

indices, which is in line with

the high of 2009, should be

followed closely for signs of

excess valuations.

Source: StoxPlus Notes: 14 out of 341 deals do not disclose their deal values and do not provide reasonable estimation basis.

Figure 2: Vietnam M&A deal size and number of deals, 2003 – 2015

Figure 1: Global M&A deals forecast, 1996-2015

1.12.33.3

1.32.1

3.93.22.7 2.7

3.64.1

0.000.501.001.502.002.503.003.504.004.50

This page is intentionally removed for demo purpose

Trang 12

Our database recorded an

increase in the number of mega

deals in 2015 which are mainly

in real estate and banking

sector

Source: StoxPlus

Figure 4: Vietnam M&A deal size and number of deals, 2015

Figure 3: M&A number of deal by size, 2013 - 2015

Less than US$1mn

Section 1: Vietnam M&A Activities Review

Trang 13

Vietnam M&A Marker 2015: Further Data and Figures

Figure 5: Breakdown of deals by value in 2015

Figure 6: M&A Vietnam Market by sector in 2015

Construction & Materials

Food & Beverage

Trang 14

Vietnam M&A Market 2015: Further Data and Figures

Figure 7: M&A Vietnam Market by sub-sector ICB level 4 in 2015

Containers & Packaging

Full Line Insurance

Real Estate Services

Food Retailers & Wholesalers

Commercial Vehicles & TrucksPaper

Recreational ServicesElectrical Components & EquipmentCommodity Chemicals

Health Care ProvidersIron & Steel

Integrated Oil & GasFootwear

WaterFinancial AdministrationSoftware

Home Improvement retailersWaste & Disposal ServicesBusiness Training & Employment Durable Household productsFurnishings

TruckingApparel RetailersConventional ElectricityTelecommunications EquipmentMedia Agencies

Medical EquipmentFixed Line TelecommunicationsDistillers & Vintners

Financial ServiceAsset ManagersOil Equipment & ServicesSpecialized Consumer ServicesGas distribution

Total

Trang 16

M&A activity in Vietnam has been on an upward trend

Figure 8: Breakdown of M&A deal size by category

Source: StoxPlus

ThailandUSMalaysiaIsraelHong KongJapanSingaporeUKIndonesiaDenmarkFinlandUndisclosedNorwegianNGOIrelandMinority Majority

Figure 9: Inbound M&A in 2014 Figure 10: Inbound M&A in 2015

Domestic Inbound Outbound

Trang 17

Inbound M&A: Sector analysis

Food & Beverage

Oil & GasTravel & Leisure

BanksChemicals

Industrial Goods & Services

Personal & Household Goods

Automobiles & Parts

Technology

UtilitiesFinancial Services

Basic Resources

Minority Majority

Foreign investors’ preference

changed from

customer-oriented sectors to industrials

sector to take advantages of

FTAs and warming up real

estate sector.

Trang 18

Inbound M&A: Real estate spotlight

Figure 14: Inbound Real Estate M&A , 2012 – 2015

Source: StoxPlus

Acquiror name Acquiror nation Target company/ asset Seller % Stake acquired Type Deal value (US$ mn)

Gaw Capital Partners

Chow Tai Fook Corp (Hong

Hong Kong28%

Japan21%

US4% Singapore

4%

Others2%

Source: StoxPlus

0510152025

020040060080010001200140016001800

Japan16%

US6%

South Korea5%

Malaysia4% Singapore1%

Caymand Islands1%

Trang 19

Inbound M&A: Real estate spotlight (cont’d)

The average size of inbound

real estate M&A valued at

US$88.16 mn, much bigger

than the figure in the previous

Trang 20

Inbound M&A: Industrial Goods & Services

Industrial Goods & Service

caught the eye of foreign

investors in 2015 with total

deal value of US$178.18mn.

Figure 17: Inbound Industrial Goods & Services M&A, 2012 - 2015

Source: StoxPlus

024681012141618

050100150200

Trang 21

Inbound M&A: Industrial Goods & Services (cont’d)

Figure 18: Inbound Industrial Goods & Services M&A Average deal size, 2011 - 2015

Source: StoxPlus

• The average size of inbound Industrial Goods & Services M&A deals for 2015 indicated an upward trend compared to that figure in 2014 since there was several majority take over in Packaging and Delivery Services.

South Korea is eyeing at

Vietnam Industrial Goods &

Trang 22

Inbound M&A: Spotlight in Packaging Sector

Figure 20: Major Inbound M&A deal in Vietnam Packaging Sector

Source: StoxPlus

(*) Deal value is based on public announcement of the companies.

Overview about Vietnam Flexible Packaging Market

Figure 21: Plastic Packaging Production Volume

0 10 20 30 40 50 60 70 80

Trang 23

Inbound M&A: Construction & Materials

Construction & Material M&A

is on the upward trend in 2015

in terms of deal value with

active participation of foreign

0100200300400500600700

Trang 24

1.1 Vietnam M&A Activities Review 1.2 Inbound M&A

1.3 Domestic M&A

1.4 Outbound M&A

Trang 25

Domestic M&A: Overall

Travel & Leisure

Oil & GasHealth Care

RetailTechnology

BanksUtilitiesPersonal & Household goods

Financial Services

Industrial Goods & Services

ChemicalsFood & Beverage

Real Estate

Minority Majority

Figure 25: Domestic M&A deal value, 2011 - 2015 Figure 26: Domestic M&A by target ownership, 2015

Local Private64%

Local SOE36%

Trang 26

Domestic M&A: Banking spotlight

M&A deals in banking

increased drastically during

2015 by acquisition of weak,

illiquid and insolvent banks.

Figure 29: Domestic M&A Deal Value in Banks, 2012 – 2015

Source: StoxPlus

0123456789

0100200300400500600700800900

(US$mn)

Figure 30: Domestic M&A deals in Bank sector in 2015

Source: StoxPlus

(*) Deal value is based on our estimation.

Trang 27

Domestic M&A: Consumer Finance Company

M&As between banks and

finance companies became

the prominent trend as

booming consumer finance

to separate consumer finance business from retail banking.

Trang 28

Domestic M&A: Real Estate Spotlight

Figure 32: Domestic M&A Deal Value in Real Estate, 2012 – 2015

Source: StoxPlus

Warming up real estate market

boosted M&A activity of

Trang 29

Domestic M&A: Food & Beverage

Figure 33: Domestic Food & Beverage domestic M&A , 2011- 2015

Source: StoxPlus

Remarkable increase in both

deal number and value in

Food & Beverage sector was

record for the year 2015.

Trang 30

1.1 Vietnam M&A Activities Review 1.2 Inbound M&A

1.3 Domestic M&A

1.4 Outbound M&A

Trang 31

Outbound M&A: Continue reorganizing to pursue growth

Figure 34: Outbound M&A Deal Value, 2012 – 2015

Source: StoxPlus

Sloping capital for expanding – Vietnamese enterprises are looking for new markets

• Started with Petro Vietnam, the significant trend has emerged as one of the strongest and state group and large scale enterprises of Vietnam are leading this surge fuelled by strong earnings Taking FPT for example, after the acquisition of RWE IT Slovakia last year, it has promised to enter the Europe market this year while pushing the presence at Japan, Singapore and expecting

to reach US$1 billion in 2020 from foreign market

proven the significant of this trend According to the Foreign Investment Agency (Ministry of Planning and Investment), there were about 150 projects registered with the totaling capital reached to US$1.5 – 2 billion

There was only 01 outbound

M&A deal recorded for the

year 2015, staying at

US$11.90mn.

Trang 32

2.2 Analysis: Capital inflows from Japan, South Korea and Thailand and Impacts of FTAs

Trang 33

2015 is the year of free trade agreements (“FTAs”)

Figure 35: Vietnam Integration Timeline

Source: StoxPlus

1995 1998

20002002

20062007

Trang 34

TPP – the giant free trade agreement of 21 st century

TPP is a free trade agreement (FTA) creating a playground between 12 economies that

contribute 40% of global GDP and account for 1/3 of world trade TPP goes beyond trade agreement since there have been many free trade in goods and the benefits that come from it, for decades TPP focus on enhancing trade and investment, supporting jobs, economic growth and development among 12 members Since the first official negotiation in March 2010, TPP members has undergone 19 official rounds of negotiations, 5 ministerial meetings and many bilateral talks.

 Key features:

 Implication for M&A:

Section 2: Opportunities from FTAs

Trang 35

VKFTA – the most comprehensive legal document for economic cooperation between Vietnam and South Korea

VKFTA is an Agreement consists of 17 Chapters, 208 Articles, 15 Annexes and 1 Agreement of

enforcement for all commitments on economic cooperation By the framework of VKFTA, Vietnam and Korea has agreed important aspects, especially import/export tariffs relating to Trade in Goods, Trade in Services, Investment and Intellectual Property, Measures for food safety and animal and plant quarantine, Rules of Origin, Customs Facilitation, Trade Remedies, Technical Barriers to

Trade, E-commerce, Competition, Economic cooperation, Institution and Legal .

Trang 36

ATIGA – the stage of deep deduction and elimination of tariffs since 2015

ATIGA is a free trade agreement among South East Asia countries (Brunei, Cambodia,

Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam) By the FTA, ASEAN members aim to achieve free flow of goods in the ASEAN leading to less trade

barriers and deeper economic linkages among Member States, lower business costs, and a larger market and economics scale for businesses.

Trang 37

2.2 Analysis: Capital inflows from Japan, South Korea and Thailand

and Impacts of FTAs

Trang 38

South Korea and Vietnam will double total trade by 2017 due

to VKFTA

Figure 37: Top 5 export sectors from

Vietnam to South Korea by value (US$mn) Figure 38: Top 5 import sectors to Vietnam from South Korea by value

(US$mn) Figure 36: Vietnam – South Korea trade balance (2009 – 11M2015)

Textile products

Phones and accessories

Computers, electronic products

8M2015 2014

Source: StoxPlus from General Customs

Source: StoxPlus from General Customs Source: StoxPlus from General Customs

Vietnam has long run a trade

deficit in the bilateral trade with

South Korea, and it keeps

increasing over the years

Trang 39

FDI from South Korea will increase due to VKFTA

Figure 39: Top sectors attracted FDI capital from South Korea, 11M2015

Source: StoxPlus from MPI

Định dạng
Số trang	78
Dung lượng	1,33 MB