Project Cleaning

Market Analysis

1
Disclaimer

The information and opinions in this report have been prepared or complied by SSI Securities JSC (‘SSI’) and
are subject to change/modification without any notice. The information contained in this report is believed to be
accurate at the time of date of issue of this Report, but no representation or warranty is given (express or implied)
as to its accuracy, completeness or correctness. SSI accepts no liability whatsoever for any direct indirect or
consequential loss or damage arising in any way from any use of or reliance place on this material for any
purpose. The contents of this Report are the Copyright of SSI. Nothing on this report constitute advise, nor
creates any contractual relationship.

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Market Overview

Increasing Demand on Cleaning Service Construction Market Forecasts

• Construction Industry is growing fast with CAGR+ 6.6% 40 Residential Non-Residential (in B USD)

35.4
35 33.4
• 57.5% of New construction is Non-Residential Sector, 31.4
especially Office and Commercial Sector will rapidly 30 29.5
27.7
grow with CAGR +9.2% each. 26
25 22.9 24.4
21.3
• After COVID-19 Outbreaks, needs for Cleaning/Hygiene 20
services is highly expected to be increased.
15
10
Few Cleaning Companies with Quality 5
0
• Unlike increasing demand on Cleaning Services, most of 2017Y 2018Y 2019E 2020F 2021F 2022F 2023F 2024F 2025F
companies in this sector are small/local companies with * Source: IHS Markit, June 2019 Forecasts

low quality and little experience for the large buildings

• Few Japanese companies entered Vietnam market since Market Player with high-quality service
2010’s (Nihon Housing, TAISEI, Builwork, etc.) and experience of managing large buildings
• Fragmented Market, No dominant player exists. can have an advantage in Vietnam Market

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Market Environment for Korean Investor

• Variety Experience of Managing large buildings

S • Strong training programs for the employee
• Ability to providing high quality service
Strength

• Lack of experience in Vietnam Market

W
• PMI process can be difficult
Weakness

SWOT Analysis
• Discounted Acquisition Price of Target Company due to
current global economy situation
O • Korea is well known for good quality in the domestic market
Opportunity • Easily approach to the Korean customers in Vietnam

• Japanese Players already in the market

T • Other Competitors can easily enter the market
• Increase of minimum wages(+5.7% in 2020, approx. $192/m)
Threat

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Recent M&A Transactions in the Sector

Case 1. Pan Services Co., Ltd Case 2. Care Vietnam JSC

• Target: Pan Services Co., Ltd • Target: Care Vietnam Joint Stock Company
• Bidder: Nihon Housing Co., Ltd (JPN) • Bidder: Taisei Corporation (JPN)
• Advisor: Saigon Securities Inc. • Advisor: Saigon Securities Inc.

• Main Business: Cleaning, Pest Control, Landscaping, • Main Business: Cleaning, Pest Control, Landscaping,
Nursing Parking Management

• Descriptions • Descriptions
Nihon Housing, Japanese total housing care company, Taisei Corporation, Japanese real estate developer,
acquired 100% shares of Pan Service in 2015. acquired 70% shares of Care Vietnam JSC in 2017.
Their branches are in Hanoi and HCMC Their branches are in Hanoi, HCMC and Da Nang.

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Contact

Tran Ngoc Vuong(Mr.)

Associate Director

E. vuongtn@ssi.com.vn
T. +84.24.3936.6321
M. +84.904.633.973