City Auto (CTF) Moves to Make Tien Giang Auto a Subsidiary With 96% Stake

Overview

City Auto (ticker CTF, HOSE) has approved a resolution to acquire capital contributions in Ô tô Tiền Giang, converting the company into a subsidiary. CTF already holds 96% of Ô tô Tiền Giang’s VND 50 billion charter capital, equivalent to VND 48 billion. The decision continues a pattern of subsidiary-building at the automotive retailer, following similar moves at Ô tô Bình Triệu and Auto Bà Rịa Vũng Tàu.

Key Facts

• CTF’s Board of Directors approved the purchase of capital contributions to make Ô tô Tiền Giang a subsidiary.
• Ô tô Tiền Giang has charter capital of VND 50 billion; CTF holds 96%, or VND 48 billion.
• The target is headquartered in Long Hưng Commune, Đồng Tháp Province, with main business lines of wholesale of automobiles and other motor vehicles.
• Trần Lâm, Chairman of the Board, is the current representative for CTF’s capital contribution.
• CTF nominated Nguyễn Quốc Soạn as Chairman of the Board and legal representative at Ô tô Tiền Giang.
• In early August 2026, CTF approved contributing capital to establish Ô tô Bình Triệu with VND 150 billion charter capital, of which CTF holds 90% (VND 135 billion).
• CTF also approved acquiring 90% of Auto Bà Rịa Vũng Tàu, equal to 4.5 million shares worth VND 45 billion.
• H1 2026 consolidated net profit reached VND 5.5 billion, up 37% year-on-year, but down more than 60% versus pre-audit figures due to additional provisional corporate income tax provisions.

What Happened

According to a company resolution, the Board of Directors of Công ty cổ phần City Auto approved the purchase of capital contributions to bring Công ty cổ phần Ô tô Tiền Giang under its control as a subsidiary. Ô tô Tiền Giang is based at Số 2A Tổ 8, Ấp 5, Xã Long Hưng, Đồng Tháp Province, and its registered main activity is wholesale of automobiles and other motor vehicles. The company’s charter capital stands at VND 50 billion, with CTF owning 96%, or VND 48 billion. Trần Lâm, Chairman of CTF’s Board, currently represents that capital contribution.

The resolution also confirms the nomination of Nguyễn Quốc Soạn as Chairman of the Board and legal representative at Ô tô Tiền Giang. The CTF board authorised Nguyễn Quốc Soạn to work with relevant parties on establishing the entity as a City Auto subsidiary. This follows an early-August 2026 resolution to contribute capital for a new subsidiary, Công ty Cổ phần Ô tô Bình Triệu, with VND 150 billion in charter capital, 90% funded by CTF, and a separate resolution to acquire 90% of Auto Bà Rịa Vũng Tàu for VND 45 billion.

Market Context

CTF trades on the HoSE and closed at 18,350 on 29 September 2026. The company sits in the Automobiles & Parts sector, where Vietnamese dealers have faced uneven demand and margin pressure through 2026. The H1 2026 result shows profit growth of 37% year-on-year, but the more than 60% reduction from pre-audit figures after additional provisional corporate income tax provisions points to earnings quality questions. The string of subsidiary transactions suggests CTF is prioritising network expansion over near-term balance-sheet consolidation.

Strategic Significance

The strategic logic is geographic and structural: by folding Ô tô Tiền Giang, Ô tô Bình Triệu and Auto Bà Rịa Vũng Tàu into the group, CTF is assembling a multi-province wholesale and retail vehicle distribution platform rather than relying on a single urban market. For long-term investors, the key question is whether these subsidiaries generate incremental revenue and margin, or simply add administrative and capital costs. The 96% ownership in Ô tô Tiền Giang leaves little free float in the target, giving CTF near-total control over strategy and cash flows, but also concentrating execution risk on the parent.

What to Watch

• Disclosure of the transaction value for the additional capital contribution in Ô tô Tiền Giang, which the resolution does not state.
• Consolidated financial statements showing whether Ô tô Tiền Giang, Ô tô Bình Triệu and Auto Bà Rịa Vũng Tàu contribute revenue from Q3 or Q4 2026.
• Further H1 2026 tax and audit adjustments, given the VND 3.1 billion gap between pre-audit and reported profit.
• Additional subsidiary or M&A resolutions, following the August 2026 pattern.
• CTF share price and liquidity around the 18,350 close on 29 September 2026.