After facing a correction on March 17 when foreign-run exchange-traded funds (ETFs) finished restructuring their portfolios, the stock of FLC Faros
Construction Company (ROS
) has returned to the long-term uptrend.
Mr. Trinh Van Quyet, chairman of FLC Group and a major shareholder of ROS, once said last year that “high-quality goods go with high prices.”
ROS shares closed up 0.8% on March 23 at 155,200 dong ($6.8) apiece and also ended up 0.8% at 156,500 dong each on March 24.
Although some tickers like ROS that have been added to ETFs’ baskets may experience ups and down in the review period, investors care about the firm’s fundamentals.
In 2016, FLC Faros Construction posted revenue of 3.26 trillion dong ($143 million), soaring 236.4% from a year earlier.
Its 2016 before-tax profit jumped 263.85% year-on-year to 528.4 billion dong ($23.2 million), surpassing the target by 8.5%, translating into earnings-per-share (EPS) of 1,230 dong.
In Q4/2016 alone, the construction firm earned a before-tax profit of 238 billion dong on revenue of 1.75 trillion dong, representing 6.4-fold and 3.7-fold increases from a year earlier, respectively.
ROS attributed the results to strong expansion, large construction contracts and payments received from several sizable projects.
FLC Group and ROS have recently announced their joint plan to build a resort complex in the northern province of Quang Ninh, where a $2-billion casino will be built for the first time for Vietnamese players.
Given a portfolio of projects worth over 20 trillion dong ($878 million), ROS will likely maintain a high growth rate as seen in 2016, according to the company’s executives.
Therefore, Artex Securities Company has forecast ROS shares would reach 250,000 dong apiece in the medium and long term. This projection might have prompted foreign investors to buy in the stock since the start of this year.
In the first quarterly review of 2017, ROS was added to the portfolio of db x-trackers FTSE Vietnam UCITS ETF after meeting the fund’s criteria for listing time and liquidity. The ticker was also included into the MSCI Frontier Markets Index, the underlying index for MSCI Frontier Markets Index ETF, which now manages $586 million in assets.
During two weeks after the review was announced, foreign investors net purchased 3.15 million ROS shares worth 521 billion dong. On March 17 only, they net bought 3.1 million shares for 500 billion dong.
In the year to March 23, overseas investors net bought 4.05 million ROS shares worth nearly 650 billion dong ($28 million).
According to analysts, the stock of ROS still enjoys a long-term upturn, with over two million shares trade per day on average.