HO CHI MINH CITY -- The retail arm of Vietnam's biggest information technology company FPT on Thursday listed 40 million shares on the Ho Chi Minh City stock market at 125,000 dong apiece, valuing the company at 5 trillion dong ($220 million).
More than 870,000 shares of FPT Retail changed hands in the morning at 150,000 dong each, mainly ordered by foreign investors, statistics of the market showed. Foreign ownership of FPT Retail is capped at 49% and a 31.4% stake was already allocated to 16 foreign institutional and individual investors before listing day.
FPT Retail was founded in 2012, when it was spun off from the FPT Group, which had reformed company structure, partly divesting from some segments to focus on core businesses, such as telecoms, technology and software. FPT Group has reduced its ownership of FPT Retail to 47% after selling down to funds and individuals via private placements last year.
FPT Retail, which has a charter capital of 400 billion dong at the end of 2017, runs two chains with more than 470 outlets, including FPT.Shop trading ICT products and F.Studio selling Apple products. FPT Retail has an 18% share of the retail market, after Mobile World Group with 45%. It plans to increase the total number of outlets to 680 by the end of 2019. The company last month announced it would enter the pharmacy retail market, with an aim to open 400 outlets over the next five years.
Experts said that FPT Retail achieved an impressive annual growth of 45% in revenues over the last five years, helped by its network expansion. This growth rate is higher than average growth in the IT retail market, which stood at 27%, during the same period. FPT Retail's results have been helped by the economy of scale, changes in product mix, and an improvement in management, according to Ny Nguyen at Saigon Securities.
Vietnam's second-largest mobile phone retailer posted 13.1 trillion dong in revenue and 290 billion dong in net profit last year, a year-on-year increase of 21% and 39.7% respectively. FPT Retail Chair and CEO Nguyen Bach Diep said the company hopes to reach an the average growth rate of 19.5% in revenue and 26% in net profit between 2018 and 2020.
According to GFK Vietnam, the sales value for the mobile phone market in 2017 grew by 9.4% year-on-year to 100.4 trillion dong, much lower than the growth of 39.8% in 2016 and 31.9% in 2015. This segment is estimated to have an annual growth rate of 6% in the next five years, showing signs of saturation.