Binh Minh Plastics to lift foreign holding cap by year-end

"It will take four months at the latest to complete all the procedures," the securities firm said in a report that predicted the relaxation will be finished by the end of this year.

At the annual shareholders' meeting in April, the company approved of opening 100-per-cent stockholding to foreign investors this year.

The plastic manufacturer therefore needs to eradicate business activities that are restricted to foreign investments. Its main business, trade on plastic products, is not included in the list of conditional business lines specified by the Ministry of Planning and Investment. However, its other two business segments, including chemical examination and testing services and road transport services, are conditional investments.

The company also agreed to buy Da Nang Plastics Company (DPC), increasing its current holdings from 29.05 per cent to 100 per cent this year.

The firm is working with consultants to decide the share swap ratio, which is expected at 100:27. Binh Minh will issue additional 429,000 shares to buy nearly 1.6 million shares, or 70.95 per cent of capital, of Da Nang Plastics Co. The deal is also forecast to be completed by year-end.

The Binh Minh Plastics Co stock price rose for four days in a row on October 14, hitting a record high of VND200,000 (US$8.97) a share. It become the second stock valued at VND200,000 a share on the local securities market.

The plastic company is among the 10 State-owned enterprises from which the State Capital Investment Corporation will divest capital. The State currently holds a 29.5-per-cent stake in Binh Minh Plastics Co.

HCM City Securities Corp estimates Binh Minh's pre-tax profits will reach nearly VND629 billion in the first nine months of this year, a rise of 27.8 per cent year-on-year.

For the whole year, the plastic firm is forecast to earn VND3.3 trillion in net sales and VND605.7 billion in net profits, year-on-year increases of 18.3 per cent and 16.7 per cent, respectively. Earnings-per-share ratio is expected at VND12,006 a share.