HAG Chairman Defends HGI IPO Price at 60,600 VND/share, 2.5x Book Value

Overview

At the HGI IPO roadshow on August 18, Hoang Anh Gia Lai (HAG) Chairman Đoàn Nguyên Đức defended the offer price of 60,600 VND per share for subsidiary HGI, which is about 2.5 times book value. The price is supported by HGI’s strong 2025 financials and plans for a 50% cash dividend. The IPO is a key step in HAG’s strategy to unlock value from its agricultural assets.

Key Facts

• HGI plans to offer 18.8 million shares at 60,600 VND/share, implying a market cap of approximately 1,139 billion VND.
• HAG’s stock traded at 14,150 VND/share on August 18, making the HGI IPO price about 4.3 times HAG’s market price.
• HGI reported 2025 revenue of 4,885 billion VND (+20.83%) and net profit of 1,486 billion VND (+74.63%).
• HGI’s ROE for 2025 was 44.37%, with total assets of 10,657 billion VND.
• HGI plans to pay a 50% cash dividend (5,000 VND/share) for three consecutive years.
• HGI currently cultivates 7,932 hectares in Laos, including 2,365 ha of bananas, 2,464 ha of coffee, 1,713 ha of durian, 691 ha of macadamia, and 698 ha of mulberry.
• HGI targets expanding coffee area from 2,464 ha to 6,323 ha by 2028, and plans to build two large-scale wet coffee processing plants in Laos.

What Happened

At the HGI IPO roadshow held on August 18, Chairman Đoàn Nguyên Đức directly addressed investor concerns about the 60,600 VND/share offer price, which is roughly 2.5 times book value. He argued that the valuation is justified by HGI’s large untapped land area—only about 40% of its cultivated land is currently in use, with the rest slated for development in 2027, 2028, and 2029, which will generate additional revenue and profit.

Đức also highlighted HGI’s commitment to a 50% cash dividend for three consecutive years, equivalent to 5,000 VND per share. Nguyễn Đức Quân Tùng, CEO of OCBS, added that HGI’s P/B ratio of 2.4-2.5 times should be viewed in light of its high ROE of 44% and P/E of about 6 times. The roadshow materials confirmed HGI’s 2025 financial performance: revenue of 4,885 billion VND (+20.83%) and net profit of 1,486 billion VND (+74.63%).

Market Context

HAG (HOSE) closed at 14,150 VND/share on August 18, reflecting a market that has been cautious about the conglomerate’s turnaround. The HGI IPO price of 60,600 VND/share is significantly higher than HAG’s market price, which may raise questions about value realization. However, HGI’s strong profitability and growth prospects, particularly in coffee, could justify the premium. The IPO comes as Vietnam’s agricultural sector benefits from rising global demand for premium coffee and fruit exports.

Strategic Significance

For long-term investors, the HGI IPO represents a potential value unlock for HAG’s agricultural assets. HGI’s focus on expanding Arabica coffee production—from 2,464 ha to 6,323 ha by 2028—positions it to capitalize on growing global demand for high-quality coffee. The planned investment of 5,200 billion VND in 2026 for HAGL’s coffee program, funded partly by IPO proceeds, underscores the strategic shift toward coffee as a primary revenue driver. If HGI delivers on its expansion and dividend promises, it could enhance HAG’s overall valuation and provide a clearer picture of its agricultural operations’ worth.

What to Watch

• Final IPO pricing and subscription results, expected in the coming weeks.
• HGI’s first commercial coffee harvest in 2027 and revenue recognition from October 2027.
• Progress on expanding coffee area and construction of two wet processing plants in Laos.
• HGI’s ability to maintain the 50% cash dividend for three years, which will test cash flow generation.
• HAG’s consolidated financials for 2026, particularly how IPO proceeds are deployed and whether they reduce debt or fund expansion.