Equitization and listing of vinamilk in vietnamese stock market

ĐẠI HỌC MỞ TP HỒ CHÍ MINH UNIVERSITÉ LIBRE DE BRUXELLES UNIVERSITE OUVERTE DE HCMV ECOLE DE COMMERCE SOLVAY MMVCFB PROGRAMME DE MAITRIES EN MANAGEMENT VIETNAM COMMUNAUTE FRANCAISE DE BELGIQUE NGUYỄN QUANG QUYỀN EQUITIZATION AND LISTING OF VINAMILK’S STOCK ON VIETNAMESE STOCK MARKET MASTER OF MANAGEMENT THESIS ADVISOR: DR TRAÀN ÑAÉC SINH Ho Chi Minh City, Viet Nam 2007 TABLE OF CONTENT ABBREVIATION LIST OF TABLES AND CHARTS .4 FOREWORDS .5 CHAPTER 1: VINAMILK’S EQUITIZATION 1.1 Fundamentals of equitization 1.1.1 Concept of SOE equitization 1.1.2 The necessity and indispensability of equitization 1.1.3 Role of equitization in the economic integration 1.2 Vinamilk’s Equitization 1.2.1 Vietnam Government’s policy of SOE equitization 1.2.2 Legal environment 10 1.2.3 Vinamilk’s Equitization 10 Conclusion 13 CHAPTER 2: VINAMILK’S LISTING IN THE SECURITIES MARKET 14 2.1 Vietnam Securities Market’s Overview 14 2.1.1 Vietnam Securities Market 14 2.1.2 Assessments of the securities market 16 2.2 Listing targets 17 2.3 Benefits from listing 18 2.3.1 State’s benifit 18 2.3.2 Benefits of employees and shareholders 18 2.4 Process of equitization and listing in the securities market 19 2.5 Company’s achievements after equitization and listing 20 2.5.1 Business activities 20 2.5.2 Vinamilk’s shares in the securities market 21 2.6 Vinamilk’s impacts to the securities market 22 2.6.1 Psychological effect to investors 22 2.6.2 Pioneer in share auction through the securities market 22 2.6.3 Double the market size 22 2.6.4 Positive impact on equitization process and listing of other businesses 23 2.7 Vinamilk’s experiences on equitization and listing 23 2.7.1 Setting up overall and detail plans for equitization and listing 23 2.7.2 Making presentation to employees and investors about the Company’s direction 23 2.7.3 2.7.4 Selecting the consultancy firm 23 Deciding the timing for equitization and listing 24 Conclusion 25 CHAPTER 3: VINAMILK’S DEVELOPMENT STRATEGIES AFTER LISTING AND SOME PROPOSALS 26 3.1 Government Strategies on SOE equitization and development of Vietnam Securities market 26 3.2 Vinamilk’s development strategies 26 3.2.1 Business 26 3.2.2 Finance 29 3.3 Policy proposals on equitization and business operation after listing 30 3.3.1 Solving the benefit conflicts between the Board and the shareholder 30 3.3.2 Reducing the State’s share ownership 31 3.3.3 Increasing the ownership of foreigners and strategic shareholders 31 3.3.4 Restructuring the company management model 32 3.3.5 Taxation policy 33 Final Conclusion 34 LIST OF REFERENCE .35 ABBREVIATION SOE(s): State-owned enterprise(s) STC(s): Securities Trading Center(s) SSC: State Securities Commission WTO: The World Trade Organization APEC: Asia-Pacific Economic Co-operation LIST OF TABLES AND CHARTS Chart 1: Chartered Capital Structure ………………………………… .13 Chart 2: Total Sales for period 1999 – 2007 20 Chart 3: Total Domestic Sales for period 1999 – 2007 20 Chart 4: Total Net incomes for period 1999 – 2007 .20 Chart 5: VNIndex and trading volume for 18 months (Jul 05 – Dec 06) 21 Table 1: Securities market highlights for period 2000-2005 …………………… 15 Table 2: Summary of state income from Vinamilk’s equitization 18 FOREWORDS Vietnam economic transformation to the market economy from the central planned economy has been conducted on various areas step-by-step and in a practical way in order to strike for the end of building up a State with “rich people, strong nation, democratic and civilized society” The two decades of renovation has brought about to Vietnam a number of prominent achievements in policy-making as well as implementing right solutions relevant to the Vietnam’s specific economic characteristics The restructuring in state-owned enterprise (SOE) sector during the last time has not only realized the objective that “SOE equitization must not become SOE privatization” but has created also a new vitality to the economy with an average growth rate of 7.5 percent per annum, streamlining the number of SOEs to 2,000 by August 2006 from previous 12,300, increasing the average size of an SOE from 3.3 billion VND to 22 billion VND etc… This proves that the Party and the government’s guidelines and polices are right and profound In addition, the SOE equitization has made up a strong base for the establishment and development of Vietnam securities market And in turn, in the securities market, Vietnam in general and enterprises in particular will be able to mobilize fund from the domestic and the foreign investors with the highest volume at quickest time and cheapest cost In order to performing the policy of SOE renovation and restructuring, Vinamilk equitized itself at the end 2003 Though it faced a lot of difficulties during the equitization such as the legal procedures, the business revaluation etc…, the case was seen as a success and was set an example and basis for Vietnam to speed up the equitization in general corporations and big state-owned banks This proclaims the SOE renovation and restructuring, with Vinamilk as a typification, a lucid policy in the cause of national industrialization and modernization as well as integrating into the world’s economy As such, with the purpose of giving more information to the public on the benefits of the equitzation and then listing in the securities market, I would like to choose the topic of “Vinamilk’s equitization and listing in the securities market” as my study for the final essay in a wish that this may somehow contribute to fostering those processes in Vietnam Though having gone through a long road for more than 10 years, the equitization as well as the listing in the securities market are still practical and topical questions and are being studied by various authors The essay was prepared in the context of economic renovation when Vietnam has just achieved important economic and diplomatic success in domestic as well as in international arena Vietnam has officially admitted as the WTO’s 150th member, hosted successfully APEC 14 Summit and is the only Asia’s candidate for the non permanent member at the United Nation By choosing this topic, I would like to assess the effectiveness of the equitization and listing in the securities market by the SOEs through the typical case of Vinamilk Then, I would like to propose proper solutions to promote those processes in SOEs in the coming years Due to the short time of studying while this topic is quite extensive and new to Vietnam’s economy, I would like to focus on analyzing the effectiveness from Vinamilk’s equitization and listing in the securities market in a effort to give an unbiased view over the company’s success when implementing the Party and the government’s policy To reach the end goal of the essay, I have used different methodologies for studying and collecting the data such as synthetization, comparison, statistics, assessment and analysis etc… As one of the members responsible for the equitization and listing for Vinamilk, I used all the data practically, adequately and correctly Moreover, the secondary data were also gathered in order to make the essay more vivid Beside the forewords, conclusion, table of contents, list of reference, the main content in the essay are as following: Chapter 1: Vinamilk’s Equitization Chapter 2: Vinamilk’s listing in the securities market Chapter 3: Vinamilk’s development Strategies after listing and some Proposals CHAPTER VINAMILK EQUITIZATION 1.1 Fundamentals of equitization 1.1.1 Concept of SOE equitization The transfer of ownership in SOEs to the business individuals and private entities is defined as the privatization in other countries, however, it is called the equitization in Vietnam Practically, the concept of equitization still implies the state’s role because even when the SOEs are equitized, the state is still holding a certain part, and in some case, a crucial part in the equitized companies Thus, the state-owned capital is not absolutely withdrawn and the investment role played by the government is still there After more than 10 years of implementation of both pilot program as well as expanding the equitization on a large scale, that concept has gradually been elaborated in order to correctly capture the practices in Vietnam Recently, the Central Party’s 3rd Resolution of the IXth Session has reviewed it as follows: The SOE equitization is a process of changing a business from one stakeholder which is the government into a multi-shareholder business with the majority of shareholders are the employees and private individuals Obviously, this definition is more generalized and reflects correctly and adequately the nature of the SOE equitization process during the last time 1.1.2 The necessity and indispensability of equitization The orientation of building a socialist economy in Vietnam based on the state-owned and the co-operative ownership in the 80s and earlier had created a huge number of SOEs (more than 12,300 SOEs), most of which were small size, technologically backward and even lack of capital for operation This situation put the Party and the State under a pressure to find out a solution to restructure the SOE system and enhance the competitiveness of the SOEs as well as strengthen the public sector’s role in the economy In this circumstance, the policy of SOE equitization was enacted and implemented in Vietnam 1.1.3 Role of equitization in the economic integration Firstly, SOE equitization helps to foster the development of the multisector economy and to socialize production It not only reduces the state subsidy of capital in the enterprises but also pays the way for the state to concentrate to invest and manage in the SOEs in key sectors Equitization will bring income to the state budget as the number of tax payers are not cut down but increase Equitization will minimize the administration apparatus, avoid waste if investment, create the transparency in the ownership, balance benefits and play as the driven to promote social development Secondly, equitization helps the companies in solving the capital problem, improving their financial capability in order to expand their production and business Moreover, equitization will create multi-ownership businesses which include the state, the employees, and outside individuals and institutions Thirdly, the equitized companies are more dynamic and easily adapted to the market economy, so that their production and business effectiveness are improved Fourthly, equitization will bring more products to the securities market 1.2 Vinamilk’s Equitization 1.2.1 Vietnam Government’s policy of SOE equitization Based on the result of pilot program of equitization between 1992 and 1996, the Government promulgated the Decree No.28/ CP dated on May 7, 1996 on transferring some SOEs into the equitized companies years later, it was 10 replaced by Decree 44/CP dated on 29 June, 1998 which gave more advantages to the equitized business as well as its employees However, as the equitization progress was still low and in an effort to accelerate the number of equitized SOEs, the Prime Minister enforced the Decree 64/ND-CP dated on 19 June, 2002 on transferring the SOE into the joint stock company which replaced the Decree 44/CP Up to date, the latest documents on equitization is the Decree 187/2004/NÑ-CP dated on 16 November, 2004 on transferring the SOEs into the joint stock companies and its instruction document which is the Circular 126/2004/TT-BTC dated on 16 November, 2004 Those documents basically solves the weak points remainning in Decree 64 1.2.2 Legal environment Legal basis for Vinamilk’s equitization are included as follows: - Government’s Decree 64/2002/NÑ-CP dated on 19 June, 2002 on transferring the SOEs into joint stock companies - Circular 79/2002/TT-BTC dated on 12 September, 2002 by the Ministry of Finance on guiding the revaluation of business when transferring from SOEs into the joint stock company - Government’s Decree 187/2004/NÑ-CP dated on 16 November, 2004 on transferring the SOEs into the joint stock company - Circular 126/2004/TT-BTC by the Ministry of Finance on guiding the Decree 187/2004/NÑ-CP 1.2.3 Vinamilk’s Equitization 1.2.3.1 Overview of Vinamilk The establishment and development (before equitization) 21 In addition, the company also concentrated on the management accounting As a result, the input costs are systematically and effectively controlled and the after tax profit keeps on increase year on year The net profit on revenue ratio is maintained at 10% - 12% The net profit over the equity is 25% - 34% and the dividend on par value is 15% - 18%/year 2.5.2 Vinamilk’s shares in the secur7market Vinamilk shares (VNM) doubled the listing volume and capitalization at its listing date As at end of 2006, VNM remained among the market “blue chips” with the trading price of 125,000 dong (2.5 times higher than its first trading day price and 7.72 times higher than its book value) and the market capitalization of 19,875 billion dong (equivalent to 1.24 billion USD) which occupied approximately 14 per cent of the total capitalization of equity Foreign ownership in VNM increased to 39.4 per cent at the end of 2006 from the previous 28.7 per cent at the listing date And in fact, the market was going through a boom in term of the share volume and the trading Chart 5: VNIndex and trading volume for 18 months (Jul 05 - Dec 06) Shares turnover shortly after VNM came to the game VNIndex constantly went up and closed the year 2006 at 751,77 points 900 7,000,000 800 6,000,000 700 5,000,000 600 4,000,000 500 3,000,000 400 2,000,000 300 1,000,000 200 100 which was 2.5 times higher than the year beginning Points 8,000,000 Source: The HOSTC 22 2.6 Vinamilk’s impacts to the securities market 2.6.1 Psychological effect to investors The local and foreign investors had been very interested in the event of Vinamilk equitization Therefore, the company’ success in equitization had a good impression on the business circle in general and for the investors in particular This represents as a solid evidence to the Vietnam’s economic reform and open policy in order to integrate into the world’s economy as well as the success of SOEs restructuring program To the domestic businesses, Vinamilk presents a typical case for them to follow when equitizing and listing 2.6.2 Pioneer in share auction through the securities market Vinamilk was the first business that conducted share auction through the HOSTC Though being the vanguard, the auctions to sell state owned shares to the public were successful out of expectation and the last price was times higher than the par value The company set a typical precedent for other following businesses to the auctions at the securities trading centers, solving the situation of organizing the auction interally within the businesses that had lots of negative practices Up to date, most of initial public offerings or additional issues through the stock market has been conducted successfully and has brought about enormous benefits to the state 2.6.3 Double the market size As Vinamilk came to the game, the total listed volume as well as the market value was doubled which was seen as a breakthrough to the stock market Additionally, the huge number of Vinamilk’s shareholders were becoming the market investors which then helped to increase the trading accounts as well as to attract more newcomers to the market 23 Also, Vinamilk was the first equitizing SOE whose capital is over trillion dong to be listed in the securities market, making the commencement for other big companies to follow This is seen as a positive factor to the upward change in VNIndex for the following months 2.6.4 Positive impact on equitization process and listing of other businesses The success of Vinamilk has encouraged the equitization in other SOEs There have been more and more companies conducting the open auctions at the securities trading centers The listing companies at the end of 2006 were triples than the previous year 2.7 Vinamilk’s experiences on equitization and listing 2.7.1 Setting up overall and detail plans for equitization and listing The success of Vinamilk is partly attributed to the planning phrase By setting up an overall and detail plan, the company’s Board would have a panorama on the project at its start, and this would help the all necessary works to be implemented by the project team professionally and effectively 2.7.2 Making presentation to employees and investors about the Company’s direction Before equitization, the company should have a workshop or seminar to present the employees and investors about its plan and direction after equitization As long as they understand it, the company’s plan for equitization and listing can be implemented quickly, favorably and more effectively 2.7.3 Selecting the consultancy firm Consultancy firm plays an important role in the process of equitization and listing It is the intermediary between the issuer and the investors Furthermore, with the professional services conducted by the consultancy firm, the company’s 24 value would be enhanced and as a result, the equitization and listing are more successful 2.7.4 Deciding the timing for equitization and listing Vinamilk was equitized in the context that the equitization policy had been introduced but was implemented very slowly and the Government was trying to speed up this process by diffent ways; the legal documents for the SOE restructuring was amended and added, typically the Decree No 187/CP on changing the SOEs into the joint stock companies Vinamilk leaped at the opportunity to advertise for the company’s image by deciding to be the first who carried out the share auction through the stock market As soon as completing the equitization, the company immediately prepared all the documentation and procedures for listing in the stock market Though the market was then in its fifth year of operation, there was still and always lack of trading products and how to provide the market with more supply was a critical problem to the regulators In the context that the Government was targeting to expand the securities market, and the economy was growing at a high and stable rate, Vinamilk decided to officially list its shares in January, 2006, right after the people had just enjoyed the Traditional New Year It was because of “a united people, favorable terrain and a clement weather” that helped VNM take a good start at listing and be highly welcomed by the domestic and foreign investors, paving the way for the sharp increase of new products to the stock market in 2006 25 Conclusion Listing in the stock market was the next target clearly set out by the Company’s Board of Management right after completing the equitization The carefully preparation as well as the implementing timing was seen as key factors to its success Vinamilk is always among the “blue-chips” and occupies a large proportion in the market trading turnover For the company, the production and business activities have been maintained and improved after equitization and listing Business strategies were formed and have been executed in an effort to prove to investors and shareholders of a good and profitable business which is crucial to keep the company’s images It can be concluded that Vinamilk’s listing, in some extent, contributed to develop the stock market and at the same time, the stock market is offering practical benefits which the company is seeking for itself and for its shareholders 26 CHAPTER VINAMILK’S DEVELOPMENT STRATEGIES AFTER LISTING AND SOME PROPOSALS 3.1 Government Strategies on SOE equitization and development of Vietnam Securities market During Central Party’s 9th Conference (Session IX), the strategy of combining the equitization and listing in the stock market was highlighted as follows: a) Strongly speeding up equitization progress and increasing the number of SOEs which must be subjected to equitization, including the big businesses and some general corporations b) Combining the equitization with initial public offering (IPO) and listing in the securities market c) The SOEs on equitization, including the land use, must, in principle, be valued by the market d) Transparency must be maintained, avoiding the closed internal equitization Besides, the Prime Minister issued Decision No 163/2003/QÑ-TTg dated on August 5, 2003 ratifying the Development Strategy for Vietnam Securities Market to the year 2010 targeting to expand the size of central securities market 3.2 Vinamilk’s development strategies 3.2.1 Business 3.2.1.1 Product and market strategies - Diversified products, targeting to become Vietnam’s leading foodstuff group 27 - Linkage for penetrating high-grade markets by cooperating with some world leading groups for joint investment in order to attract the capital and expertise for the company and at the same time to expand its domestic as well as international market 3.2.1.2 Marketing strategy Vinamilk has been investing for this strategy in order to maintain and strengthen its position in the market, including: - Concentrating to professionalize every division, from marketing, trade name management to distributing strategy - Consistent in trade name policy as well as closely cooperation among divisions such as designing, R&D, sale, production, marketing etc, to ensure the consistency in implementing the trade name policy - Appointing staffs to manage every brand name - Working with consultancy and PR companies - Investing for knowledge training in trade name management 3.2.1.3 Quality management policy The company is always giving the priority to the product quality by: - Focusing on investment for equipment and technology renovation - Seeking for a modern and comprehensive solution, choosing the one that comes from the countries with developed milk industry equipment and technology - Attaching much importance to the technology transfer By using adapted technology, the company has gradually controlled and improved the technology to make it suitable to the domestic conditions 28 - Implementing an IT system for the whole company All of its factories has now applied the quality management system according to ISO 9001: 2000 and the foodstuff hygiene systems such as HACCP, GMP… 3.2.1.4 Raw material policy For fresh milk, the company is looking to (1) expanding the size of fresh milk raw material areas in a effort to gradually replace the imported materials, (2) seeing to the foodstuff hygiene from raising, milk exploiting, preservation, transportation to production and supply to the consumers; (3) Ensuring to consume the milk output for farmers, contributing to increase the diary herds at Hochiminh City as well as in the whole country following the “diary herd development orientation to the year 2010” set out by the Agricultural and Rural Development Ministry With its above targets, the company continues to support the milk cow farmers by a number of policies such as assisting them with loans to buy and raise the quality of breeding cows, facilities, meadows etc… and ensuring to consume all the fresh milk products for them; investing to develop typical milk cow farmhouse model; assisting and cooperating with locals to build milk cow areas using advanced technology; working with foreign companies and experts to expand the agricultural encouraging programs; organizing seminars, workshops, training courses, supplying the mixed food and equipments necessary in milk cow raising with preferential price to milk suppliers Vinamilk has also set up more than 60 fresh milk raw material agents so far, with daily purchasing turnover of above 260 tons/day, making up more than 80 per cent of the whole country fresh milk The company has also invested for a fresh milk quality control system and a quality-checking team who are trained 29 with foodstuff hygiene safety (training of HACCP) and can timely consult the farmer about the milk quality 3.2.1.5 Policy for employees In its policy for employees, Vinamilk is striving to the following targets: - Ensuring enough work for employees and their income getting improved - Ensuring adequate rights and responsibilities for employees according to the law and regulations - Timely awarding to persons and teams who have good contribution to the company - Assisting and creating favorable conditions for employees to attend domestic and abroad training courses - Training and restructuring the labour force suitable to the company development 3.2.1.6 Human resource training policy Some of the training activities being undertaken are: - Giving scholarship for qualified candidates who are children of company’s staffs to be educated and trained abroad - Recruiting excellent students at Hochiminh City’s Colleges and sent them to study abroad - Financially supporting to the staffs’ high training courses 3.2.2 Finance The financial policies have been set up quarterly, yearly and for 3-5 year period in order to meet the company’s development in the future Moreover, the company established the accounting management and financial investment team whose operation is parallel with the accounting team 30 Due to clear and suitable policies and plans which fit the actual business activities, the company’s finance has been improved The financial ratios are higher year-on-year, especially the after tax profit over equity ration is always above 30 per cent/year and the dividend paid out over par value is at least 17 per cent/year According to the plan of additional issues which was approved by the State Securities Commission, the company issued more shares to attract approximate 1.2 trillion dong in order to restructure its fund for the period between 2006 and 2008 3.3 Policy proposals on equitization and business operation after listing 3.3.1 Solving the benefit conflicts between the Board and the shareholder The benefit conflicts between the Board and the shareholders are solved by some following internal policies: 3.3.1.1 Share bonus to the Board and the key staffs Nowadays, there exists a benefit contradiction in the equitizing companies in term of share ownership within the Board of Directors in particular and among the employees in general According to the rule and regulation, the employees have rights to buy the preferred shares depending on their number of working years which somehow has bad effects to the equitization as the rights of the board and the employees are nearly equal but the pressure on the Board increases as the shareholders are asking for the Board for good management and business results over the year Such pressure does not exist in SOEs However, in equitizing companies, if such conflicts are not solved completely, the passive effects easily arise among the Board 31 In order to settle this contradiction, Vinamilk issues bonus shares equal to per cent of the chartered capital to the staffs and those who have important contribution to the company 3.3.1.2 Wage and salary policy to the employees and staffs Beside share bonus to staffs and employees, the company is building and maintaining a good policy of salary and wages to them The high paid salary and wage help to retain the experienced staffs as well as attract more talented staffs to work for the company In addition, high income makes the employees to devote more to the company and prevents them from the wrongdoing 3.3.2 Reducing the State’s share ownership The fact that the State still keeps the controlling share ownership in the equitizing SOEs is explained not to change the management and operation in these businesses As a result, in order to strengthen the self-motivation in production and business as well as the competitiveness for businesses and to draw capital back to the state budget, the State needs to speed up selling all or part of its shares in non key sectors and in businesses which it does not have to control This also helps to provide more products and increase the liquidity for business shares in particular and for the securities market in general 3.3.3 Increasing the ownership of foreigners and strategic shareholders The increase in ownership of foreigners and strategic shareholders is to attract the external expertise and technology and to stabilize the share price Currently, equitized companies are allowed to sell share to strategic shareholders at 30 per cent discount over the average bidding price However, this policy is not necessary as the issuers are always seeking the strategic shareholders who are strong in term of finance, technology and knowledge The issuers just can give priority to them by choosing a short-list for the additional 32 issues or for selling part of the state-owned shares in a competitive bidding Through the bidding, a bidder with the highest bidding price is chosen In addition, through these shareholders, the Board of Directors can gather ideas in building business plan and strategy in a more professional and objective way Moreover, the strategic shareholders would be the most effective monitoring shareholders to the company’s business And at the same time, their requirements also put a high pressure on the Board of Directors for non-stop striving for the company’s further development 3.3.4 Restructuring the company management model With the current company management model in Vietnamese businesses The business managing power is still assigned to the General Director meanwhile the functional divisions are not highly valued and invested In order to make the business viable and developed, it is required to restructure the management apparatus as follows: - Decentralizing administration at different level, power, responsibility to every rank, creating a crossed checked and surveillance among divisions; - Setting up functional divisions and giving them the decision power and responsibility to some extent without reporting to the higher level; - Setting up internal control divisions to monitor the business activities of the company; - Building business targets, plans monthly, quarterly and yearly - Streamlining the management team; - Computerizing the managing activity; - Rotating staffs among divisions frequently; - Having policies for human resource development and training for young managing generation 33 In addition to giving high salary and bonus to employees, the company also have policy of issuing share bonus annually to employees based on their performance during the year The bonus shares will be considered and determined by the company board of directors However, issuing bonus shares to employees should be accompanied with policies to bind them with responsibility in the business Besides, Vinamilk has created a dynamic and professional working environment with adequate and modern facilities and infrastructure, meeting the employees’ demand in order to help the employees to maximize their ability and contribution to their job in particular and to the Company in general Every staff can meet directly with the board of directors to discuss and share his/her opinions or ideas about the work Furthermore, the company has invested for an IT system which is strong enough to manage all the business activities in the best way and for every staff to share and exchange view to each other by an internal mail system This is a working environment which is very effective, time saving and encouraging, creating easy atmosphere for every body to share opinion and ideas with other colleagues as well as the board of directors 3.3.5 Taxation policy As the people’s income is improved, it is incredible they must contribute to the state budget by tax payment However, the state should not concentrate on personal tax collection soon but build a concrete plan and roadmap for implementing it, together with clear, consistent tax policy, and a effective tax calculation and collection method in order to avoid the inequality in tax collection It is also necessary to build a comprehensive education program for people to understand the importance of as well as their responsibility in tax payment in order to minimize the bad effects when implementing 34 Final Conclusion The SOE restructuring and renovation put forward by the Party and the Government has stepped on a new phrase of accelerating and associating with listing on the securities market Various new rules and regulations have been promulgated and formed the legal basis for the equitization and listing, especially the Decree No 187 and the approval for the Securities Law Equitization and listing become an irreversible trend which brings about enormous practical benefits to both businesses and the economy, enhancing the competitiveness in the new context of economic integration Moreover, Vietnam securities market has come into operation stably and businesses become aware of benefits from listing, such as the opportunity of fund mobilizing, cost reduction, tax preferences and the improved images in the market etc… In addition, the policy of equitization and listing are more and more welcomed by the employees as it goes well with and closely attach to their rights and benefits Vinamilk’s success commenced the public offering activity in the stock market which in turn drives up the equitization in remaining SOEs After listing, the company now is implementing and deploying production and business strategies in an effort to ensure its commitments to shareholders and investors, maintaining it as a “blue chip” in the stock market Vinamilk always wants to be the pioneer in implementing the Party and Government policy and direction, setting the bright example for other businesses Finally, it can be said that Vinamilk has put itself in the prestige of a vanguard as it is targeting to list and raise fund in foreign stock market 35 LIST OF REFERENCE Doan Thanh Ha, (2001)ø, “Increasing the listing company – solutions for stabilizing and developing Vietnam securities market”, Securities Magazine (9), p 3-6 Bui Nguyen Hoan, Securities market and joint stock Companies, National Politics Publishing House, Ha Noi Hội nghị lần thứ Ban chấp hành Trung ương Đảng khoá IX, Nghị soá 34/NQ/TW, Ha Noi Dr Nguyen Nang Phuc, Financial Analysis in Vietnam’s joint stock companies, Finance Publishing House Dr Tran Ñac Sinh, Viet Nam Stock Exchange– Model and Steps, Hochiminh City Publishing House, HCMC Dr Tran Ñac Sinh (2002), “Improving the disclosure mechanism in Vietnam Securities Market”, Vieät Nam Securities Maganize (7), p 6-8 Dr Nguyen Thanh Tuyen, Securities Market Theory, Hochiminh City Publishing House, HCMC State Securities Commission, Seminar on Vietnam’s Securities Market – years of operation and development, HCMC, 2005 The World Bank, Corporate Governance Country Assessment of Vietnam, June 2006 10 Internet: www.mof.gov.vn (Bộ Tài Việt Nam) o www.vse.org.vn (TTGDCK TP HCM) o www.hastc.org.vn (TTGDCK Hà Nội) o www.ssc.gov.vn (UBCKNN) o www.cpv.org.vn (Đảng cộng sản Việt Nam) ... as Vinamilk in 1992 Before equitization, Vinamilk was upon the Ministry of Industry, specializing in dairy and dairy products processing Principal business activities - Producing and trading... filtered and instant), - Producing, trading packs/bags; pack printing, - Producing, buying and selling plastic products, - Polyclinics Products and Market Vinamilk produces more than 200 kind of products... including the big businesses and some general corporations b) Combining the equitization with initial public offering (IPO) and listing in the securities market c) The SOEs on equitization, including