PetroVietnam Oil Corporation (PV Oil) may double the amount of shares offered as part of its initial public offering (IPO), which is scheduled in the fourth quarter of this year.

A PV Oil representative told HCM City Securities Corporation (HSC) at a meeting on Wednesday that the company will offer 20 per cent of its total shares for sale at the IPO, or 210 million shares.

That number is twice the initial planned rate of 10 per cent, or 105 million shares. The company also plans to sell 44.7 per cent of its stake to several strategic investors.

The IPO and strategic stake sale will reduce the Government’s ownership in PV Oil to 35.1 per cent. The company is in talks with potential partners and the list of strategic shareholders is expected to be completed by November.

PV Oil is a member of the Vietnam Oil and Gas Group (PetroVietnam or PVN), which is an entirely State-owned enterprise. The company has a monopoly of crude exports and is the second largest petroleum dealer after Petrolimex in Viet Nam.

According to HSC, PV Oil is seeking to raise its market share in the local market to 30-35 per cent in the next three to five years from the current 22 per cent by increasing the number of gas stations.

The company expects its combined profit margin will rise to 6-6.5 per cent in the targeted period by increasing its productivity and having advantages over competitors due to its large-scale business.

PV Oil has more room to grow thanks to the fast-increasing number of cars and other vehicles, leading to high demand for gas and oil products, HSC said, adding that market demand growth could reach 3.5-4 per cent per year.

HSC estimated PV Oil’s revenue in the first six months was VND28.3 trillion (US$1.25 billion), a yearly increase of 74 per cent, or equal to 82 per cent of the yearly plan, while pre-tax profit rose eight per cent year-on-year to VND231 billion, or 71 per cent of the yearly plan.

For 2017, HSC forecast PV Oil could earn VND48 trillion in revenue, an annual increase of 22 per cent, and VND650 billion in pre-tax profit, a yearly increase of 3.6 per cent.

Shares of PV Oil could be listed in the first quarter of 2018 at the market capitalisation of VND12 trillion, or $520 million, HSC forecast. — VNS