KOSY GROUP: CAPITAL INCREASE IS THE START FOR THE AMBITIOUS PLAN
Kosy is expected to issue 62.25 million shares to increase chartered capital to 1.037.5 billion. Could you elaborate on this plan?
This is the policy approved at the General Meeting of Shareholders from the beginning of the year. This release aims to supplement capital to meet the demand for key projects of Kosy in 2018.
After a period of restructuring and strategic direction, we find that this time is sufficient for Kosy to expand its operations, to take advantage of market opportunities, to break out, to increase the value of its stock for the shareholders and investors.
Dr Nguyen Viet Cuong – Chairman of Kosy Group
The current projects are quite feasible, as Kosy has strong brand advantages in niche markets in the provinces, have relationships, as well as extensive market intelligence. However, that is just the conditions needed, the sufficient condition is to have a better financial foundation, more capital than when developing the project.
We identify the guideline the “prestige – quality”, so the products when being released to the market must be the best quality, the most value products for customers. Therefore, the increase of capital is necessary to ensure the ambitious targets have been agreed by shareholders, that is business performance surpassed in 2018 with 1,500 billion revenue.
The stock market is not really positive now and many experts say that it will not benefit the issuance of capital increase at this time. What are your opinions about this?
I think that fundamentally, the market platform is good enough for businesses to be confident in the medium and long term. The recent fluctuations, mainly due to general psychological factors and have been carefully analyzed by the Securities Committee in recent times.
Looking at the maturity of the market with the size, number of enterprises, as well as firm foundation of each enterprise, the stock market has more positive prospects from now until the end of the year with GDP growth stable, low inflation. In particular, the issue of exchange rate fluctuations is not too serious when the foreign exchange reserves are plentiful and the State Bank pledged to use all measures to stabilize.
This is the basis for the business operation of the business, including Kosy not be affected too much, and the target of capital mobilization is still feasible on the stock market.
It is necessary to add that, in the plan, Kosy does not issue publicly, but issued separately to strategic individuals and organizations with financial potential in accordance with the policy approved at the shareholders’ general meeting. So, the chances of success are very high. In the case of not fully issuing, the Board of Directors also has plans to issue to partners who want to join with the long-term plan of Kosy.
Kosy Song Cong New Urban – One of Kosy’s project
As you said, this capital increase is to serve the implementation of a series of projects. So what are the projects and if they are feasible, sir?
After capital increase, Kosy will spend about VND100 billion for Kosy Song Cong (Thai Nguyen), VND100 billion in Kim Don Commune (Dong Anh, Hanoi), VND155 billion for the project Kosy Xuong Giang (Bac Giang) and 165 billion VND project of new urban area, sub-urban area 17, Lao Cai – Cam Duong new urban area (Lao Cai) …
In addition, Kosy is expected to spend PLN73.5 billion in its capital increase plan to invest in KPT Vietnam and the remaining shall be added to the floating capital, expectedly VND29 billion.
Basically, as I said above, these are all potential projects, which are part of Kosy’s previous plans and now officially qualify for implementation. In its investment plan, Kosy has prepared and anticipated the worst scenarios for projects to ensure that the projects can bring maximum benefit to businesses and the shareholders.
We are confident about the prospects of the projects, because in addition to having a prime location, we also have the advantage of our extensive brand and distribution system. With the “successful infrastructure” approach, the mobilization of additional capital is to ensure that the projects launched will be the best, most sustainable value for customers, helping them trust the Kosy products.
Apart from the potential projects under development, Kosy Group is also actively expanding its business to new business areas such as hydropower, with projects in Lai Chau; solar energy, with projects in Binh Thuan; Information technology – a completely new field, started as e-commerce with the potential applications in the 4.0 technology era.
Up to now, basically the projects are quite feasible and will be pooled to quickly deployed, completed and put into operation in accordance with the schedule committed to shareholders and investors from the shareholders’s general meeting earlier this year.
There are fears that such commitments at this time are mainly just to reassure sentiment of the investors and shareholders. What do you think about this?
In fact, Kosy hasn’t committed without a practical basis so far. Kosy’s motto is always to do before saying, which means that everything is available then we are confident to tell shareholders and investors.
In addition to the practical effects of the projects, in 2018, Kosy will continue to optimize revenue and profitability by building a strategic management model that minimizes unnecessary operating costs, increase the financial resonance value in the revenue and profit structure .
At present, Kosy has a relatively stable financial structure with liabilities accounting for only 40% of total capital, a stable level for a real estate business. At the same time, liquidity and profitability ratios and ROA and ROA indicators have also improved steadily over the last two years.
As for the trend, the real estate market from now until the end of the year is still positive growth, especially the land segment in high speed urban areas such as Thai Nguyen, Bac Giang, Lao Cai, as well as the outskirts of Hanoi, especially in the East, is coming up with a $4 billion Smart City project set up by Sumitomo Corporation (Japan) and BRG.
This will attract a large number of potential investors coming, which will be advantageous to the development plan and position raising that Kosy Group is pursuing when Kosy Kim No project is considered one of the most strategic location production in this area./.
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