People flock to Dam Sen Water Park in HCM City during the summer. (Photo: dantri.com.vn) Hanoi (VNS/VNA) - Summeris the peak season for tourist companies and high sales and dividend rates areexpected to drive tourism shares up in the coming months.
For many Vietnamese families, thehot weather between May and August is the most attractive time to travel andrelax.
Right after the end of the LunarNew Year holiday, travel companies started offering enticing promotions forsummer tours. This is the time of year they record the highest revenues fromsales.
Tay Ninh Cable Tour Company (TCT)earned 93.7 billion VND in pre-tax profit in the first nine months of lastyear, exceeding its target for the year by 23 percent. Its share price climbedmore than 19 percent between May and August last year.
Dam Sen Water Park Corporation(DSN), which operates the biggest water park in HCM City, posted total revenuesof 109.6 billion VND (4.7 million USD) and pre-tax profit of 108 billion VND inthe first three quarters last year, equivalent to 90 percent and 93 percentrespectively of its targets for the whole year.
For the whole of 2018, it earned 216.6billion VND in revenue and 95.7 billion VND in profit after tax. With theseresults, the company decided to pay a dividend rate of 65 percent.
DSN shares fluctuated between Mayand August but remained high at around 54,000-56,000 VND (2.32-2.40 USD) pershare.
Shares of Hoi An Tourist JSC(HOT), jumped more than 50 percent from early May to early June, from 31,000VND a share to 47,750 VND on June 6, butthen declined to 29,000 VND in August.
Revenues and profits of the firstthree quarters of last year for Hoi An Tourist accounted for about 80 percentof the whole year’s figures. By the end of September, it had earned 155 billionVND in total revenue and 17.3 billion VND in net profit.
Shares of Thanh Thanh CongTourist JSC (VNG) and Superdong Fast Ferry Kien Giang JSC (SKG) were alsofavoured by investors. Their share prices increased by between 20 and 30 percentin the peak season.
There are 19 tourist companieslisted on official and unofficial stock exchanges in Vietnam. Most of theirrevenues are generated during the hot season and their business performanceduring this time has an impact on their share prices.
Tourism is one of Vietnam's keyeconomic sectors, raking in 620 trillion VND in 2018, equivalent to 8.2 percentof the country’s gross domestic product (GDP).
It is expected to contribute 11.6percent to the nation’s GDP and generate 1.47 quadrillion VND each year by2025.
The number of internationaltourists to Vietnam has been on the rise with an average growth rate of 27 percentper year from 2015 to 2018. More than 4.56 million foreigners visited thecountry in the first three months of this year, representing year-on-year growthof 7 percent.
While the prospects for tourismstocks are bright in general, many of them have not received much attentionfrom investors.
Except Thanh Thanh Cong Touristand Superdong Fast Ferry Kien Giang, which often see millions of shares changehands per day, liquidity of tourism stocks such as Hoi An Tourist, Dam SenWater Park and Tay Ninh Cable Tour are very low.
Market analysts have said the lowliquidity can be attributed to the fact that most listed tourism companies aresmall- and medium-sized enterprises with volatile business performance.
Meanwhile, the biggest companiessuch as Saigontourist, Hanoitourist and Vietravel have not yet been listed.
Saigontourist Holding Company, aState-owned enterprise under the management of the HCM City People’s Committee,was asked to be equitised in 2018.
Under the plan, bothSaigontourist and its subsidiary Saigontourist Travel Service Company wouldhave made their initial public offerings last year, reducing the State capitallevel from 100 percent to 65 percent and then below 50 percent by 2020.However, they missed the deadline.
Competition in the tourismindustry is getting tougher and analysts have said shares of big companieswould help attract investors, raising the liquidity of the whole sector.-VNS/VNA
VNA
