Securities firm Yuanta Vietnam (YSVN) said in a report on 896 enterprises that the average return on equity in the third year after the state equitized them or sold stakes to private investors rose to 15.4 percent from 12.4 percent before the divestment.

Their average return on assets edged up to 1.6 percent from 1.5 percent.

Normally, an SOE takes around two years to restructure its assets after divestment, and so metrics from the third year would more correctly reflect profitability, YSVN explained.

Since 2005 the government has sold stakes in 480 SOEs for a total of VND185 trillion ($7.95 billion), and equitized another 416 enterprises with a total charter capital of VND181 trillion ($7.77 billion).

However, only 267 of the equitized firms have listed on the Unlisted Public Companies Market (UPCoM) as required by the government.

UPCoM has lower disclosure requirements to encourage unlisted businesses to publicly trade shares and eventually list in Ho Chi Minh City or Hanoi.

And just over half of the 480 businesses the government sold stakes in were able to completely fulfill their designated divestment targets. Difficulties related to land and valuation procedures were the main reasons for delays in state capital divestment, YSVN said.

The equitization has also helped increase the size of the stock market and attract foreign capital.

According to YSVN, divestment will increase this year since the government announced last August it will speed up the equitization program by selling stakes in 93 major state-owned companies by the end of 2020.

It plans to sell up to 35 percent in major SOEs including Agribank, one of Vietnam’s biggest banks by assets, Vietnam National Coal & Mineral Industries Holding Corp (TKV) and Mobifone, a major mobile network operator.

According to a Ministry of Finance report, privatization efforts are way behind schedule with only 36 of 127 enterprises the government proposed to sell in 2017-20 being equitized as of the end of last year.