PUBLIC INVESTMENT STOCKS ARE EVEN MORE ATTRACTIVE

Accelerated disbursement of public investment capital in late 2023 and its sustained momentum in 2024 will fuel strong growth for infrastructure construction companies.

Public investment disbursement is in the final stretch. At the regular Government meeting held on December 6, Prime Minister Phạm Minh Chính said that there is very little time left in 2023, while there are many unfinished tasks. Therefore, the PM requested government members to propose solutions to achieve the set objectives.

According to the Ministry of Planning and Investment (MPI), public investment disbursement until the end of November reached VNĐ461 trillion (US$19 billion), equivalent to 65.1 per cent of the 2023 plan.

There is still approximately VNĐ247 trillion of undisbursed capital, requiring resolute and coordinated efforts at all levels of the political system to achieve the highest completion rate, as directed by the PM in Directive No 08, which aims for a disbursement rate of over 95 per cent.

Nguyễn Đức Chi, Deputy Minister of Finance, said that the ministry will consider disbursement of completed investment projects within the prescribed time, no more than three working days from receipt of dossiers.

In fact, there are a lot of active public investment projects underway, and construction contractors have a full schedule.

On December 6, Deputy Minister of Transport Nguyễn Duy Lâm inspected the construction status of the Mỹ Thuận 2 bridge project. The bridge connects Trung Lương - Mỹ Thuận and Mỹ Thuận - Cần Thơ expressways, shortening the distance between HCM City and Cần Thơ.

The total value of construction of Mỹ Thuận 2 bridge to date has reached about 97 per cent of the volume. Of the five bidding packages of the project, four have been completed. The remaining package can be completed before December 25.

Meanwhile, on December 5, the People's Committee of Cao Bằng Province announced the results of selecting investors for the Đồng Đăng - Trà Lĩnh expressway construction investment project (Lạng Sơn - Cao Bằng).

The joint venture of Đèo Cả Group JSC - ICV Vietnam Investment and Construction JSC - Đèo Cả Traffic Infrastructure Investment JSC - 568 Project Construction JSC was chosen to construct the project.

Đèo Cả Group has researched and proposed a plan to adjust the route with many mountain tunnels and valley overpasses, shortening the route length by 23km and reducing the total cost to nearly VNĐ23 trillion, equivalent to a reduction of nearly half compared to the original plan.

Of which, the first phase of Đồng Đăng - Trà Lĩnh Expressway has a length of 93.35km, starting point at the intersection of Tân Thanh border gate in Lạng Sơn Province and ending point at the intersection with National Highway 3, Quảng Hòa District in Cao Bằng Province, with a total investment of more than VNĐ14 trillion.

Rising attraction

VNDirect Securities Corporation expects that public investment disbursement in 2023 will increase by about 25 per cent and remain positive in 2024. According to the 2024 State budget plan provided by the Ministry of Finance (MoF), development investment spending is VNĐ677 trillion, excluding the remaining balance that must be disbursed from 2023.

“If we assume that 89 per cent of the plan assigned by the Government will be disbursed this year, there will be VNĐ83 trillion left to add to the total public investment capital next year. As a result, the total target disbursement capital in 2024 will be VNĐ760 trillion, 5 per cent higher than the Government's target in 2023," VNDirect said.

With the motivation from public investment, FiinGroup believes that infrastructure construction businesses have positive growth prospects in 2024.

The infrastructure construction segment of Vinaconex (VCG) is expected to benefit from the Government's policy of promoting public investment, said Yuanta Securities Company. Currently, Vinaconex is participating in five component projects of the North - South Expressway project phase 1 and three component projects of phase 2 and bidding packages of Long Thành Airport (Vietur joint venture).

On the stock exchange, the largest foreign fund managed by Dragon Capital, Vietnam Enterprise Investment Limited, completed purchasing 1.3 million VCG shares of Vinaconex on November 2, increasing its ownership from 8.44 million shares to 9.74 million shares.

Meanwhile, KB Vietnam Securities Company predicts that the prices of HHV shares of Đèo Cả Traffic will rise to VNĐ20,400 per share as traffic flows at BOT stations rise by 5 to 20 per cent. The company also encourages the implementation of public investments to support the growth of roads, bridges and infrastructure.

BSC Securities Company estimates that in 2023, Đèo Cả Traffic's revenue could reach VNĐ2.6 trillion, with profit after tax of VNĐ365 billion, an increase of 25 per cent and 37 per cent from 2022, respectively. By 2024, the business is likely to achieve revenue of over VNĐ3.1 trillion and profit of VNĐ445 billion.

Analysts said that public investment stocks are witnessing positive outlook, but investors need to be selective and learn more about business results before disbursement.

On the stock market, VCG shares were traded at VNĐ24,400 a shares on Monday, while HHV were at VNĐ15,550 per share.

Source: VNS