The expected offering price of 60,600 VND per HGI share is considered high by shareholders, but Bau Duc believes that it is necessary to look at the prospects in the coming years.
HGI plans to offer a maximum of 18.8 million shares, equivalent to 11.157% of outstanding shares, at a price of 60,600 VND per share. At the investor meeting on August 18 in Ho Chi Minh City, some shareholders questioned whether the above price was high and asked Mr. Doan Nguyen Duc, Chairman of the Board of Directors of Hoang Anh Gia Lai (HAGL), to explain the basis for valuation.
Mr. Duc said the price was set after the business worked with valuation and consulting units.
"Looking at it, it seems high. However, investors need to look at HGI's ability to grow profits in the coming years," he said.
OCB Securities Joint Stock Company (OCBS), the consulting unit for the offering, said that HGI's ROE in 2025 is about 44%, P/E about 6 times and P/B about 2.4-2.5 times. OCBS also evaluates that HGI still has room to improve asset utilization efficiency when asset turnover is currently about 0.5 times, lower than the industry average of 1.4 times.
According to the business, about 40% of the crop area is currently being exploited, the rest is expected to enter harvest in the coming years. HGI plans to increase the growing area to 12,000 hectares by 2028, while the percentage of harvested area increases from 44% in 2026 to more than 90% in 2030.
HGI was established in 2016, charter capital is 1,685 billion VND and currently manages 8,000 hectares of growing areas in Laos. In 2025, the enterprise will reach VND 4,885 billion in revenue and VND 1,486 billion in profit after tax. This year, HGI targets revenue of 7,456 billion VND and profit after tax of 1,815 billion VND.
Bananas are the main source of income with 2,365 hectares, bringing in about 3,661 billion VND last year. In addition, HGI has 1,713 hectares of durian and 2,464 hectares of Arabica coffee.
Arabica coffee is one of the areas being invested in in Laos, at an altitude of about 900-1,000 m. The processing plant is expected to be completed in October this year, and the first commercial harvest is expected to begin in October 2027.
With durian, Mr. Duc said productivity in suitable growing areas can increase from 10-15 tons per hectare in the sixth and seventh years to 30-40 tons from the eighth to tenth years.
Regarding the after-tax profit margin, which is expected to decrease from about 30% to 24% when coffee starts contributing to revenue from 2027, Mr. Duc said that the main reason comes from the internal trade segment with low profit margins, not the reduced efficiency of agricultural products.
Regarding dividends, HGI plans to pay 5,000 VND per share in the next three years. The payout ratio is less than 35% of profits, the rest is retained to reduce debt and reinvest.
According to the offering plan, HGI plans to issue a maximum of 18.8 million shares, equivalent to 11.157% of the outstanding shares, raising a maximum of about 1,140 billion VND. The offering has a minimum of two institutional investors participating, OCBS is the consulting and distributing unit.
After the offering, HGI plans to register for trading on UPCoM in the third or fourth quarter of 2026.
