Refrigeration Electrical Engineering (REE) will make long-term investment in power plants, water treatment plants and real estate development in 2010. Its targeted profits from these areas are VND200 billion (US$10.5 million), nearly 40 per cent of the HCM City Stock Exchange-listed company's total profit target for the year.
REE projects investments of VND480 billion ($25.3 million) in the property market and VND270 billion ($14.2 million) in power and water treatment plants, the company said.
REE Chairwoman Nguyen Thi Mai Thanh said opportunities to realise short-term profits on the stock market had become increasingly difficult while real estate development and key infrastructure sectors promised great potential.
REE incurred a loss of VND207 billion ($10.9 million) on financial investments in 2009, including a hit of VND160 billion ($8.4 million) from losses in the Cables and Communication Materials Corporation (SAM) shares alone.
Among its planned investments in the electricity sector this year, REE is eyeing a purchase of State-owned Electricity of Viet Nam's 30-per-cent stake in the HCM City-listed Thac Mo Hydropower Company, as well as direct investments in the Ninh Binh hydropower project.
In the water treatment sector, REE has already invested in the Thu Duc water plant, which has been completed under a Build-Own-Operate contract and is slated to begin operations in June, and is in negotiations to invest in another water treatment plant this year.
REE earned VND1.17 trillion ($61.6 million) last year and posted a net profit of VND432 billion ($22.7 million). It paid a 7-per-cent cash dividend on 2009 earnings and a 20-per-cent dividend in shares.
Through February of this year, REE has earned VND271.3 billion ($14.3 million) and posted a profit of over VND65.2 billion ($3.4 million). It has targeted total revenue for the year of VND1.5 trillion ($79 million) and a net profit of VND510 billion ($26.8 million).
It projects to pay a 15-per-cent dividend in shares this year as well as offer over 81 million additional shares to existing shareholders at a ratio of 1:1. Another 8 million shares will be offered to key company personnel at a price of VND12,000 ($0.63) per share.
REE shares closed up 2 per cent yesterday at VND51,000 ($2.68) per share, on a volume of 972,740.
REE also projects to issue one-year convertible bonds this year to existing shareholders worth a total of VND810.4 billion ($42.7 million), using the proceeds to increase its charter capital to over VND1.8 trillion ($94.7 million).
Thanh assured shareholders that REE would meet its profit target of VND200 billion from financial investments this year, noting that expected dividend payments alone from banks in which REE has invested, including Sacombank and Asia Commercial Bank, would be enough to secure targeted capital gains.