001 A company analysis and valuation,Master''''s Thesis

H Ọ( Dissertation submitted in partial fulfillment of the UWE κri,v Bristol England Requirement for the MSc in Finance FINANCE DISSERTATION ON A COMPANY ANALYSIS AND VALUATION NAME OF STUDENT: NGO MINH NGOC ID No: 17047725 Intake Supervisor: Assoc Prof Dr Do Thi Kim Hao September 2018 ACKNOWLEDGEMENTS During one intensive full-time year drowning in University of West of England environment Over all, I have achieved profoundly valuable knowledge about Banking systems and Finance status in Vietnam and many developed countries Therefore, working in Agribank Lao Cai Branch, it was a great chance for learning, practicing and developing professional skills In order to finish this thesis, I am deeply grateful to all those who have given ideas, valuable comments, as well as their support during three months of the internship First and foremost, I would like to express my deepest gratitude and special thanks to my supervisor, Assoc Prof Dr Do Thi Kim Hao, for her careful and precious guidance, necessary advices Besides, it will definitely be my shortage if I not send my truly thanks to all my lectures at UWE-BAV, whose provide me with the best learning conditions, teaching methods which not only develop my dissertation but also lay the foundation for my career Moreover, I am greatly indebted to Ms Nguyen Thi Huong - Manager of Corporate Clients Department She was my direct supervisor in Agribank Lao Cai Branch, who in spite of being extraordinary busy with her duties, took time out to hear, guide and keep me on the correct path during the training Last but not least, I convey my sincere thanks to my family, friends who are always by my side with the best support helping me complete the dissertation as well TABLE OF CONTENTS CHAPTER INTRODUCTION 1.1 The background 1.2 The objectives 1.3 The methodology 1.4 The methods 1.5 An overview CHAPTER MACROECONOMIC ANALYSIS 10 2.1 World economy 10 2.2 Vietnam economy 11 2.2.1 PEST analysis 12 2.2.2 Financial analysis 14 2.2.3 Summary about Vietnam economy .16 CHAPTER INDUSTRIAL ANALYSIS .17 3.1 The global aviation industry outlook 17 3.2 The Vietnam aviation industry outlook 18 CHAPTER Vietjet Joint Stock Company 21 4.1 Business description 22 4.2 SWOT analysis 22 4.2.1 Strengthens 22 4.2.2 Weakness .25 4.2.3 Opportunities 27 4.2.4 Threats 29 4.3 Ratios analysis .30 4.3.1 Profitability ratios 30 4.3.2 Gearing ratios 31 4.3.3 Investment ratios 32 4.4 Valuation 32 CHAPTER AIRPORTS CORPORATION OF VIETNAM (ACV - up COM) 34 5.1 Business description 35 5.2 SWOT analysis 36 5.2.1 Strengths 36 5.2.2 Weakness 36 5.2.3 Opportunities 36 5.2.4 Threats 36 5.3 Ratios analysis 37 5.3.1 Profitability ratios 37 5.3.2 Gearing ratios 38 5.3.3 Investment ratios 38 5.4 Valuation 38 CHAPTER Vietnam Airlines Corporation(HVN- upCOM) 41 6.1 Business description 42 6.2 SWOT analysis 43 6.2.1 Strengths 43 6.2.2 Weakness .43 6.2.3 Opportunities 43 6.2.4 Threats 43 6.3 Ratios analysis .43 6.3.1 Profitability ratios 43 6.3.2 Gearing ratios 44 6.3.2 Investment ratios 45 6.4 Decision investor 45 CHAPTER General aviation services company (AST -HOSE) 46 7.1 Business description 47 7.2 SWOT analysis 47 7.2.1 Strengths 47 7.2.2 Weakness 47 7.2.3 Opportunities 48 7.2.4 Threats 48 7.3 Financial analysis 48 7.3.1 Profitability ratios 48 7.2.2 Investment ratios 49 7.3 Valuation 49 CHAPTER Compare four companies inVietnamaviationindustry 51 CHAPTER CONCLUSTION 58 REFERENCES 59 APPENDIX 61 LIST LIST OF TABLES OF ABBREVIATIONS AND FIGURES Figure Global growth continues .10 Figure Vietnam GDP growth rate from 2013 to 2018 .14 Figure GDP per capital of ASEAN countries from 2017 to 2022 and the CAGR of GDP per capital 2017- 2022 15 N Figure Vietnam inflation rate from Jan 2017 to Jul 2018 .16 Figure Chart of market share of domestic passenger carriage in Vietnam 2011-2016 19 Figure CASK operating cost index and fuel surcharges (USD cents): 2013 - first half of 2017 24 Figure the chart of number of tourists and the growth of tourists from 2009 to 2017 in Vietnam 28 Figure The profitability ratios of Vietjet JSC 2015 - 2017 31 Figure Gearing ratio of VJC 2017- 2018 31 Figure 10 The Investment ratios of Vietjet JSC 32 Figure 11 Compare between VJC with other enterprises in the world 33 Figure 12 The profitability ratios of ACV (2015-2018) .37 Figure 13 Investment ratios of ACV 2014-2017 38 Figure 14 Compare between ACV with other enterprises in the world .39 Figure 15 Domestic aviation market share from 2015 to 2017 42 Figure 16 The profitability ratios of HVN from 2016 to 2019 44 Figure 17 Gearing ratios of HVN from 2014-2017 44 Figure 18 The investment ratios of HVN from 2015 - 2017 45 Figure 19 The profitability ratios of AST from 2016 to 2019 48 Figure 20 Investment ratios of AST 2016-2018F .49 Figure 21 Compare between enterprises in the aviation industry 50 Figure 22 Sensitivity analysis .50 Figure 23 Key data in main enterprises in aviation industry 51 Figure 24 EV/EBITDA 2017 52 Figure 25 Comparing the P / B and ROE indexes of the nationalaviation industry (04/2018) 54 Figure 26 Comparing P / B and ROE indexes for national airports(04/2018) 54 Figure 27 ROA and ROE of aviation businesses 2015-2017 .55 Figure 28 ROE and Dupont Aerospace Analysis 2016-2017 .57 Figure 29 Asset Situation of enterprises .61 Figure 30 Capital structure of aviation enterprises 2016-2017 62 ASEA Association of Southeast Asian Nations CAGR CPI Compound annual growth rate Consumer Price Index EBITA Earnings before interest and taxes and amortization EBITD Earnings before Interest, Taxes, Depreciation, and Amortization GDP Gross Domestic Product IMF OECD International Monetary Fund Organisation for Economic Co-operation and Development OPEC SMEs Operational Expenditures Small and Medium Enterprises SOEs WTO State Owned Enterprises World Trade Organization A 1.1 CHAPTER INTRODUCTION The background "Asian airlines and their increasing passenger numbers are driving global aviation markets We envisage that APAC will account for up to half of total annual increase in air traffic by 2020," Shukor Yusof, an aviation expert at Endau Analytics, told DW Vietnam's two fundamental transporters - Vietnam Airlines and Vietjet - are additionally performing admirably regarding development and course extension "Vietnam has a youthful, lively populace and this is driving the avionics division locally and provincially," said Yusof The quantity of air travelers going on local aircrafts is evaluated at 21.8 million, up multi year-on-year On the household advertise, four local aircrafts including Vietnam Airlines, VietJet Air, Jetstar Pacific Airlines and VASCO are working 52 residential air courses associating Hanoi, Danang and HCMC with 18 nearby air terminals In addition, Vietnam's aviation segment positions the fifth among ASEAN nations The area served in excess of 94 million travelers including 13 million remote travelers, an expansion of 16 percent contrasted with 2016, more than twofold that of Asia In any case, household traveler development backed off to 13 percent in 2017 from 25 percent in 2016 Among now and 2020, traveler transportation is required to ascend by 16 percent, and from 2020 to 2030, by percent Merchandise transportation will increment by around 18 percent until 2020, and 12 percent somewhere in the range of 2020 and 2030 In conclusion, Vietnam, at present one of the world's quickest developing aeronautics market will be the fifth quickest developing business sector by 2035, as indicated by the International Air Transport Association Therefore, Vietnam currently has seven aviation companies, including Vietjet Joint Stock Company (VJC), Airports Corporation of Vietnam (ACV), Vietnam Airlines Corporation (HVN) and General aviation services company (AST) The research will focus on these four that analyze financial ratios, competitiveness and development indicators in order to find a safe and efficient company for investment 1.2 The objectives This study refers to a macroeconomic analysis, industry analysis and a company analysis on four enterprise including Vietjet JSC (VJC), Airports Corporation of Vietnam (ACV), Vietnam Airlines Corporation (HVN) and General aviation services company (AST) in Vietnam aviation’s industry Therefore, a definitive motivation behind which is to give sound and all around examined speculation proposals In addition, the dissertation gives a glimpse of the aviation market in Vietnam and analyze major competitive factors in the industry At the same time analyzes the main economic indicators of the four companies through financial statements Finally, making investment recommendations to investors should invest in any company to achieve the highest return 1.3 The methodology When study the Macroeconomic, using the PEST model to study the major factor indicators, such as real GDP (nominal GDP), CPI Vietnam inflation Besides, when analyzing the industry, focus on the factors that influence the development of the industry, the competition in the market as well as the trends of consumers in recent years affect how the fashion market (SWOT analysis method) Finally, about company analysis and valuation, based on financial statements, economic indicators, industry analysts' analysis, and stock market performance of the four companies Therefore, the research uses a top-down analysis method from the macroeconomic to each company in this industry 1.4 The methods The ratio analysis in this study focused on some methods such as profitability ratio, gearing ratio and investment ratio, EV/EBITDA From there, the study extracted the analytical data so that the private investors can have a panoramic view of these companies 1.5 An overview The study will focus on three main areas, the first is the study of the world aviation industry History of development, services and activities typical in developed countries as well as emerging countries In addition, learn about the industry in Vietnam, markets, ... in the market as well as the trends of consumers in recent years affect how the fashion market (SWOT analysis method) Finally, about company analysis and valuation, based on financial statements,... Vietnam is today an essentially more taught and solid society than twenty years back, and these characteristics are evenhandedly dispersed Inclusion and learning results are high and evenhandedly... profoundly valuable knowledge about Banking systems and Finance status in Vietnam and many developed countries Therefore, working in Agribank Lao Cai Branch, it was a great chance for learning, practicing