Speculative Buying Drives Habeco’s Share Rally: Carlsberg

Tuan Minh

14:55 25/11/2016

BizLIVE - Carlsberg has deemed brewer Habeco’s recent share surge as “speculative.”

Speculative Buying Drives Habeco’s Share Rally: Carlsberg

A premium brand of Habeco. Photo: Internet

A recent rally of Hanoi Beer Alcohol Beverage Corp (Habeco) shares has been driven by speculative buying as the government prepares for divestment from the brewery firm, Carlsberg Vietnam told Bloomberg News.
Habeco’s shares stayed flat at 105,500 dong ($4.7) each at 02:05 on Nov. 25, 2.7 times the starting price when the brewer floated its shares on the UPCoM market on Oct. 28.
The surge in the firm’s share price doesn’t accurately reflect the underlying value of the business as it’s “mainly due to speculative buying on very thin volume,” said Tayfun Uner, chief executive officer of Carlsberg Vietnam.
The shares reached a high of 144,700 dong ($6.4) on Nov. 8 after eight straight gaining sessions, compared to 39,000 dong at the debut session, a price Uner described as fair.
Habeco’s selling price should also reflect that its market position has dropped to third from second in the local beer market since the Danish brewer first purchased stakes in 2008, he added.
Carlsberg, which already holds a 17.51% stake in Habeco, has been in talks with the Ministry of Industry and Trade to purchase an additional 61.79% stake in the Hanoi-based brewer and plans to bid for another 20% that the ministry will sell at an upcoming auction, the CEO tipped.
If the government fails to sell the entire 20% stake during the auction process, Carlsberg would be willing to buy the 61.79% holding at a price per share equivalent to its 2008 initial stake purchase, Uner said.

“We can confirm that we currently are in a constructive dialogue and on-going negotiation with the Vietnamese government, a Carlsberg communications officer told BizLIVE.

She, however, declined to comment on the timing, process or price and valuation.

“It is very possible the government will take the market price as reference for the stake sale,” said Marc Djandji, head of institutional sales at Rong Viet Securities Corp.
“Considering the small amount of shares available, if the government relies on the market price, it’s just an artificial price. So the concern of Carlsberg is understandable,” Djandji commented.
Beer consumption in Vietnam is expected to reach 4.04 liters this year, compared to 3.88 billion liters in 2015, the most in Southeast Asia and the third largest volume in Asia after South Korea and Japan, according to market research companies.
Market shares of beer players in Vietnam. Source: Viet Capital Securities 
Ho Chi Minh City-based Sabeco now dominates the local beer market, followed by Heineken, Habeco and Hue Brewery, which is wholly owned by Carlsberg.
The four brewers hold a combined 90% market share while the remainder is taken by newcomers such as Sapporo, AB InBev, and Masan Brewery, according to Viet Capital Securities.  
Carlsberg now dominates the market in central Vietnam while Sabeco, with is Saigon and 333 brands is the No. 1 brewer in the south. Habeco, meanwhile, is losing its ground in the northern region due to poor marketing and branding.

TUAN MINH