Public investment wave pushes infrastructure construction shares

Since last week, a series of information related to the disbursement of public investment capital activated the new increase for many stocks of construction industry, thereby extending the series from the beginning of the year. Statistics of VnExpress It shows that about 60% of the stocks listed on HOSE and HNX have increased in the past two months. The average rate of profitability is about 9%, much superior to 2.3% of the VN-Index.

According to Mr. Le Vu Kim Tinh – Director of Phu Hung Securities Company (PHS), the common point of stocks with an increase of over 20% is to turn on quickly and attract a few cash flow a few sessions before the business announced Contractor of public investment project.

Typically, CTD of Coteccons Construction Joint Stock Company is extending the circuit increasing by 5 sessions when this enterprise is in the joint venture to win the package of more than 3,140 billion VND to build garage houses at Long Thanh Airport Project. From the price of 88,000 VND, stocks this morning reached 96,000 VND, which increased by nearly 8.5%. This is the highest price area in nearly 6 years of Coteccons.

FCN, a member of the project of winning the project, also has a green chain of 3 sessions and 5 times more liquidity thanks to this information. This stock market has just exceeded 16,000 VND, an increase of nearly 10% compared to the beginning of the year.

As the head of the joint venture, CC1 of the No. 1 Construction Corporation also increased the amplitude of 15% in the last session last week. This morning, this stock accumulated 4% to reach the price of 20,000 VND, the highest in a year. The winning of many projects, plus the 2024 year revenue nearly doubled, helping CC1 increased by more than 28% within two months.

Two large enterprises in the construction – infrastructure industry are Vinaconex (VCG) and Deo Ca Transport Investment Investment Joint Stock Company (HHV) in the increase in the raise thanks to the prospect of receiving more new public investment projects. VCG has increased by 18% compared to the price area at the beginning of the year, while HHV increased by more than 10%.

In the recent analysis report of ACB Securities Company, these two codes are in the list of shares that benefit directly from public investment promotion. The analysis group estimates that the backlog value (orders) of VCG is over VND 17,000 billion and HHV is over VND 2,900 billion. The figure is twice and three times the revenue of their construction and installation in 2023 by continuously winning national key projects.

“Promoting public investment is creating a positive psychology for the stock market, especially the stock of infrastructure construction because investors are expecting the ability to increase revenue and profit from large projects. Cash flow into this group has created the bottom of October 2024, recovered from the second half of December and officially rushed from the beginning of this year, “said Nguyen Dai Hiep, Director Dragon Vietnamese contract (VDSC), said.

According. clear public investment capital. The phrase “improving the disbursement rate of public investment” is continuously emphasized by the Government leader in recent conferences, because a disbursed public capital will lead to 2 capital for social investment.

Last year, the progress of disbursement of public investment capital was slow because the 2024 Land Law takes effect, increasing the cost of site clearance and suspending a number of projects to adjust. In addition, lack of construction materials has a significant impact on the capital disbursement progress.

However, according to ACBS, this year’s prospect may be different. Public investment is always a traditional growth motivation, but the role of this dynamic this year is even greater when domestic consumption recovers slowly and the private economic investment tends to decrease. Moreover, this is the last year of the medium-term public investment plan 2021-2025, so the Government is showing very high determination.

ACBS estimates that there are 12 component projects of the North – South highway phase 2 expected to be completed. The total investment capital of these projects is VND 147,000 billion, of which, the remaining value is nearly VND 62,000 billion. In addition to VCG and HHV, many other listed businesses such as Railway Construction Corporation (RCC), Lizen Joint Stock Company (LCG), Cienco 4 Group (C4G) … also directly participate in the other participants This project. As a result, the stock price of businesses is on the rise, even some constantly touching the ceiling and no seller.

However, Mr. Hiep said that if the disbursement data in the coming months is not really positive, the price increase of this group can cool down in the short term. It is estimated that by the end of February, disbursement of public investment capital reached VND 60,423 billion, equivalent to 7.32% of the disbursement plan of VND 826,000 billion.

According to Mr. Hiep, calculated in the 5-year and 10-year time frame, the coefficient of P/B (Price-to-book Ratio, ie the price of the book value) of the infrastructure construction industry is higher than P/B Market average. This shows that investors are expecting great growth in the industry’s growth.

“The stock price may soon be adjusted according to the reality of the capital disbursement progress and the effectiveness of the projects,” the expert said.

In the same opinion, Mr. Le Vu Kim Tinh said that the greatest support for the price of infrastructure construction is the project winning information. However, the excitement of cash flow in the near future will depend greatly on the disbursement progress and project implementation.

If positive, cash flow can spread to construction and installation industries such as steel, cement, asphalt. Finally and longer and longer, logistics stocks, real estate in industrial parks and civil real estate will indirectly benefit when the business prospects of businesses get better thanks to the improvement of infrastructure to increase. Calculate the connection, optimize the supply chain, reduce operating costs.