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DCM - NON RATED - Gas input price set to guarantee an ROE of 12% - Pre IPO

Ca Mau Fertilizer (DCM), the second urea producer in Petro Vietnam Group will conduct its IPO on Dec 11th with 128mn shares on offer or 24.36% of share capital. PVN will regulate input gas price sold to DCM to ensure a guaranteed ROE of 12% during 2015-18. At the IPO price of VND12,000/sh, DCM’s FY15 EV/EBITDA at 5.6x and PER at 8.7x is 32% and 14% lower than DPM, its sister company, respectively. Currently there is no plan to pay dividends although they were paid in the past.