FUNDAMENTALS OF CORPORATE FINANCE TOPIC FINANCIAL REPORT OF GEMADEPT ANALYSIS

HANOI UNIVERSITY OF SCIENCE AND TECHNOLOGY School of International Education FUNDAMENTALS OF CORPORATE FINANCE TOPIC: FINANCIAL REPORT OF GEMADEPT ANALYSIS LECTURE: PhD Nguyen Dang Tue Students Le Thi Linh Nguyen Hai Ha My Le Phuc Nghia Le Thi Quynh 20158218 20158265 20158283 20158333 Vu Van Duc 20158265 Hanoi, 10/2018 CONTENTS CHAPTER 1: GEMADEPT COPORATION’S GENERAL INTRODUCTION 1.1 Introduce the company overview 1.2 Products and Service .6 1.3 Size of the company CHAP 2: FINANCIAL REPORT ANALYSIS 2.1 Balance sheet, income statement, cash flow analysis 2.1.1 Balance sheet 2.1.2 Income statement 10 2.1.3 Cash flow statement 12 2.2 Financial ratios analysis 14 2.2.1 Profitability Margin .14 2.2.2 Liquidity ratios .15 2.2.3 Interest Coverage ratios 15 2.2.4 Leverage ratios 16 2.2.5 Operating return 18 CHAP 3: OPINIONS INVESMENT 21 3.1 EVALUATING PROSPECTS FROM BUSINESS ACTIVITIES 21 3.1.1 Prospects for medium and long-term development 21 3.1.2 Position and resources of the company: .22 3.1.3 Competitive position 23 3.2 ANALYSIS OF FINANCIAL SITUATION 24 School of International Education Wi t hbou n c e l e s sl o v ea nda ppr e c i at i o n,ou rg r o upwo ul dl i k et oe x t e ndo ur h e ar t f e l tg r at i t ud ean da c k no wl e d gme ntt oPhD.Ng uy e nDangTue Than ky ou f ory ourun wav e r i n gs u ppo r t , gu i da nc eandi n s i g htt hr ou g h ou tt hes e me s t e ran d t hi sfin alr e p or t Y ouc on t i nu al l ya ndc on v i nc i n g l yc on v e y e dane x c i t e me n ti nr e g a r dt ot e ac hi n g Wi t ho uty o urgu i da nc eandpe r s i s t e n th e l p ,t hi sr e p or twoul dn otha v ebe e n p os s i bl e Ou rr e p or twi l lha v ema n ymi s t a k e s ,wea r el ook i n gf o r war dt ohe ar i n g f e e db ac k san dc o mme nt sf r omy o us oon Ag a i n ,wes i nc e r e l yt han ky ouf ory ouras s i s t an c ei nt hi sma t t e r School of International Education CHAPTER 1: GEMADEPT COPORATION’S GENERAL INTRODUCTION 1.1 Introduce the company overview  Name of company: GERMADEPT COORPORATION  History and Development:  1990, established under Viet Nam Maritime Bureau  1993, one of the first companies being selected by the government for equitization  1995,Establishment of Phuoc Long ICD, the port inland of Viet Nam  1997, Implementation of Midstream operation, river way transport  2000, NO.2 nationwide ranking in container handling volume  2001, Increasing charter capital to VND 200 billion  2002, officially listed on Viet Nam Stock Exchange  2003, Deployment of container liner transport service  2004, established overseas School of International Education  2006, Successful share issuance to raise charter capital up VND 475 billion  2007, Purchase of seagoing vessels, launch of service lanes, establishment of joint ventures with reliable international partners  2008, Putting Germadept Tower, Schenker- Germadept Logistics Center and ports in Dung Quat and Hai Phong into operation  2009, Accomplishment of a new level profit , Initiation of Tan Son Nhat Air Cargo Terminal construction  2010, Increasing charter capital to VND 1000 billion , Putting Tan Son Nhat Air Cargo Terminal into operation, owning 99,98% of proportion of Nam Hai Port Join Stock company  2011, Starting rubber plantation project in Cambodia , Putting Distribution Center in Song Than IZ ( Binh Duong province ) into operation  2012, Putting distribution Center Song Than IZ ( Binh Duong province ) into operation, Starting Construction of Nam Hai Dinh Vu Container port ,  2013, Completing the construction of Nam Hai Dinh vu Container port and putting into operation , restructuring capital construction  2014, Increasing the charter capital to over 1,161 billion  2015, Increasing the charter capital to over 1,196 billion, starting Construction of a Cold Warehouse project in Hau Giang  2016, Increasing the charter capital to over 1,794 billion , starting construction of Nam Dinh Vu Port in Hai Phong  2017, Increasing the charter capital to over 2,882 billion , having strategic partnership with CJ Logistics( Korea) School of International Education  Award - Germadept has been ranked among Vietnam’sTop 500 largest enterprises - Top 20 Logistics Enterprises in Viet Nam - Top 50 Vietnamese Best Performing Companies, - Top 50 Best Vietnamese Listed Companies by Forbes - Top 1000 enterprises having the largest contribution of corporate income tax to national budget  Vision: Striving to become a Viet Nam and regional leading corporation in Port Operation and Logistics  Mission: - Possessing and operating most effectively the port system along the coastline School of International Education - Completing the supply chain to provide customer with most efficient logistics solutions and highest competitive service quality in the market - Properly taking investment opportunities to create added values  Target: - Leading port operator with best service quality - Among leading logistics companies in Indochina and ASEAN - No.1 in project cargo transport - Leading carrier in domestic and Vietnam-Cambodia services - Top employee income and welfare in the industry - Among VN30 1.2 Products and Service Core business: School of International Education - Port operation : one of the core businesses of Germadept Corporation After 20 years of establishment and development, Germadept is now owning and operating a large port system from North to South , in big cities and key economic zones - Logistics : with good and proper infrastructure as large distribution center, port system along national coastline , large and powerful vessel and truck fleet, Germadept Logistics has gradually combined its strength to offer customers the supply chain management service Targeting to make Gemadept the top brand \name in Viet Nam until 2015 - Forestry: since the 1st rubber bamboo plantation on July 04, 2011, the project has been in progress for almost years with fruitful results - Real estate: In line with the business diversification strategy, Gemadept has achieved remarkable successes in real estate sector, starting with the market segment of office buildings at the CBD of some big cites 1.3 Size of the company Year Net Sales Total Assets Stockholder’s Equity Charter Capital Unit Value ( in 2017) VND VND VND VND 3,990,532,084,494 11,291,217,207,272 7,094,537,082,089 2.882.769.570.000 School of International Education School of International Education CHAP 2: FINANCIAL REPORT ANALYSIS 2.1 Balance sheet, income statement, cash flow analysis 2.1.1 Balance sheet 2015 Total Assets Current assets Cash and cash equivalent Short-term investment Short-team receivable Inventory Other current assets Non-current assets Long-term receivable Fixed assets Long-term assets in process Long-term investment Other non-current assets Total Liabilities Current liabilities Non-current liabilities Stockholder equity 2016 2017 8.999.300.920.286 2.678.066.855.242 904.519.085.757 91.441.580.440 1.514.907.461.906 107.208.185.841 59.990.541.299 6.321.234.065.044 198.466.823.330 2.431.673.132.649 10.117.918.996.180 2.140.251.676.214 724.469.956.298 88.716.047.075 1.128.058.857.408 87.029.572.424 111.977.243.009 7.977.667.319.966 151.378.820.840 2.697.536.270.457 11.291.217.207.272 2.223.117.121.083 779.802.200.597 113.000.452.720 1.127.689.185.681 107.800.595.571 94.824.686.514 9.068.100.086.189 127.490.383.350 3.208.464.134.770 1.086.215.278.045 1.823.657.063.794 2.457.808.973.389 2.010.258.432.052 594.620.398.968 3.384.815.508.267 1.605.680.951.595 1.779.134.556.672 5.614.485.412.019 2.308.318.447.213 996.776.717.662 4.251.302.978.148 2.961.152.475.919 1.290.150.502.229 5.866.616.018.032 2.310.194.997.897 964.141.596.774 4.196.680.125.183 2.676.231.766.155 1.520.448.359.028 7.094.537.082.089 Base on balance sheet: - Total Assets increased from 8,999,300,920,286 VND (2015) to 10,117,918,996,180 VND in 2016 and then increased to 11,291,217,207,272 VND in 2017 That means the company has expanded its investment in assets Specifically, the company has reduced Current assets from 2,678,066,855,242 VND in 2015 to 2,223,117,121,083 VND in 2017, the total non-current assets soared from 6,321,234,065,044 VND in 2015 to 9,068,100,086,189 VND by 2015; This shows that the company is pushing for non-current asset investment, especially fixed assets and long-term assets in the process In addition, short-term and long-term School of International Education 10 - In 2016, cash flow from operating activities of the company increased very low (only about 0.57%), the cash flow for investment of the company increased sharply about 162.75% Besides, in 2016, cash flow from financial activities increased from -334,216,340,822 to 294,401,666,526 That means in 2016, the company has earned money from activities which are operating activities and financial activities However, due to the sharp increase in spending on investment, the cash flow during year continues to be negative, meaning that in 2016 the company continues to spend more than its revenue - In 2017, cash flow from operating activities decreased 16.9%, cash flow from financial activities decreased by 10.2% However, cash flow from investing activities decreased sharply from -1,236,543,872,891 to -840,854,280,104 This shows that in 2017, the company continues to earn money from operating activities and financial activities, however, thanks to the sharp decrease in investment costs leading to the cash flow during year of the company has been positive, showing that in 2017, the company earned more than spending 2.2 Financial ratios analysis 2.2.1 Profitability Margin 2015 2016 2017 Gross profit 946.668.827.731 1.018.238.369.86 1.029.146.169.53 Operating income Total accounting profit before tax Loan interest expense Net income Total sales 490.657.539.766 505.805.904.470 597.023.379.551 480.726.591.123 733.288.924.680 650.454.817.813 118.499.734.961 460.682.619.983 3.593.780.842.60 121.195.333.723 443.734.791.018 3.743.839.681.80 143.856.433.218 581.436.276.874 3.990.532.084.49 Net sales 3.586.332.451.00 3.741.668.881.115 3.983.962.676.61 School of International Education 15 Gross margin Opertating margin EBIT margin Net profit margin 0,26 0,14 0,17 0,13 0,27 0,16 0,16 0,12 0,26 0,18 0,20 0,15 Based on the above analysis, we see that the indicators of the Gross margin in 2016 are 27%, slightly better than 2015 and 2017 which are 26% It’s mean in 2016 the company controls the cost of its inventory and the manufacturing of its products and subsequently pass on the costs to its customers better than in 2015 and 2017.On the other hand, the EBIT margin in 2016 fall off compare to 2015 and 2017, it fell from 17% in 2015 to 16% in 2016 It’s mean the overall operating efficiency, incorporating all the costs of ordinary, daily business activity is decrease in 2016 But it’s increase in 2017.We also can see the Net profit margin drop from 13% in 2015 to 12% in 2016 This means that in 2015 13 cents of every dollar are profit but in 2016 only 12 cents of every dollar are profit In contrast in 2017, the Net profit margin increase to 15% It means 15 cent of every dollar are profit 2.2.2 Liquidity ratios Current ratios Looking at the table, we see Current Ratios in 2015> 1( 1,667869855) indicates that the company is operating well, able to pay off all debts But in 2016 and 2017, Current Ratios