How to invest in public investment stocks

This approach, however, will not improve the value of all public investment equities. As a result, in order to prevent dangers, investors must carefully choose equities.

Year-end public investment prospects

Several major public-investment projects, including Beltway 3 in Ho Chi Minh City and Beltway 4 in the Capital Region, have begun ahead of time. To reach the target, the government must spend more than 500 trillion dong in the final six months of the year (equal to 78 trillion dong per month). In the closing stages of 2023, this is a substantial task.

The emphasis on increasing public investment is likely to have a wide-ranging influence on a variety of industries, including building materials, construction, residential real estate, industrial real estate, and logistics. Public investment is viewed as a driver of economic growth in the face of difficulties to consumer spending and exports caused by inflationary pressures, increasing currency rates, and global economic uncertainties. According to General Statistics Office estimations, if public investment expenditure grows by 1% over the preceding year, GDP will increase by an additional 0.058%.

Beneficiary sectors

Many industries will profit from the final push for state investment this year. However, the amount to which enterprises profit depends on the individual features of each industry. Companies with big market shares and sites near active projects would profit the most in areas where transportation costs have a considerable impact on product consumption, such as cement and building stones.

Many public investment projects (such as the North-South highway or Long Thanh International Airport) are confronting a scarcity of land resources for filling, particularly in the building stone sector. As a result, prominent building stone businesses with big reserves and positions near key projects would gain.

When important public investment projects are completed, the infrastructure building industry is projected to gain immediately, and input material prices, such as coke prices, are likely to fall considerably, while steel prices are expected to stabilize. Construction companies will benefit from key transportation infrastructure projects such as the North-South highway stages 1 and 2, Long Thanh Airport, Beltway 3 in Ho Chi Minh City, and Beltway 4 in the Capital Region.

Which stocks to consider?

Investors might evaluate the following stocks as candidates for public investment:

The first is the Bien Hoa Construction and Building Materials Joint Stock Company's VLB stock. With a total capacity of 5.7 million m3/year, this corporation controls the largest stone quarry among listed enterprises. The quarries of VLB are ideally positioned near important economic hubs like Vietnam Ho Chi Minh City, Binh Duong, Long Thanh Airport, and major highway construction. This is intended to assist VLB in lowering transportation costs to building sites, hence increasing its competitiveness. Investors could consider purchasing VLB when the stock price adjusts to 30,000 - 32,000 VND/share and exiting when the stock price hits 38,000 VND/share.

The second is CIENCO4 Group Corporation's stock C4G. C4G has currently received bids for two significant projects on the North-South Highway phase 2: Bung - Vann Ninh and Hau Giang - Ca Mau, totaling 3,500 billion VND. The projected profit in 2023 is optimistic owing to accounting from projects such as the Cam Lo-La Son stretch of the North-South Highway, Phan Thiet-Dau Giay, Phu Bai Airport, and others. Furthermore, the rates for the contracts given this year are significantly lower than those won in the preceding round. Investors might consider purchasing C4G at 12,000-13,000 VND/share and selling when it hits 16,000-17,000 VND/share.

The third is Deo Ca Group Corporation's stock HHV. HHV manages and operates around 15 toll service stations, 25 kilometers of road tunnels, and over 265 kilometers of highways and national roads. HHV is an important link in the Investment - Operations Management - Construction chain. HHV recently received the XL-01 contract for the Quang Ngai - Hoai Nhon segment of the North-South Highway phase 2 project, which totaled 3,862 billion VND. Investors should consider purchasing HHV when it adjusts to 13,000 VND/share and exiting at 18,000 VND/share.

The fourth is Vinaconex Corporation's stock VCG. VCG has been awarded three contracts as part of the North-South Highway phase 2 project, with a total investment of more than 17,200 billion VND. VCG is projected to win additional contracts under North-South Highway phase 2 because it participated in five bids under North-South Highway phase 1. In addition, VCG is the general contractor building Long Thanh Airport Passenger Terminal 1. Investors could consider purchasing VCG at 23,000 VND/share and exiting when the stock achieves the target price of 29,000-30,000 VND/share.