IMPROVE BUSINESS EFFICIENCY OF MATERIALS IMPORT OF ELECTRIC MOTORBIKE AND BICYCLE AT ELECTRICITY BICYCLE MOTORBIKE JSC HANOI – 2022 TABLE OF CONTENT INTRODUCTION 1 CHAPTER 1 BASIC THEORY OF IMPROVING.
BASIC THEORY OF IMPROVING BUSINESS EFFICIENCY
Overview of the import
Importing is a vital component of foreign trade, representing the buying and selling of goods and services from abroad to meet domestic demand or for profitable re-production It highlights the national economy's reliance on the global market Essentially, imports involve transactions with foreign companies and economic organizations, facilitating the consumption of imported goods within the domestic market or their re-export for profit, thereby linking production and consumption effectively.
Import activities play a crucial role in market diversification and serve as a catalyst for domestic enterprises to enhance their techniques and diversify their product offerings This improvement boosts the competitiveness of local businesses against foreign goods Additionally, imports help elevate a company's standing both in the domestic market and internationally by facilitating the buying and selling of goods and expanding trade relationships.
Importing goods plays a crucial role in the economic revitalization of a country by facilitating the acquisition of advanced technology, machinery, and equipment, which accelerates domestic production and supports industrialization and modernization efforts Furthermore, imports provide consumers with a wider variety of high-quality products at competitive prices Additionally, the cultural exchange that comes with imported goods enhances Vietnam's economic relations and bolsters its position and prestige on the international stage.
Import markets are diverse, allowing businesses to source goods from various countries based on their unique comparative advantages Each nation excels in specific sectors, providing enterprises with opportunities to expand or adjust their import strategies When considering imports, factors such as foreign trade benefits and market demand play crucial roles Additionally, as these markets continually evolve, conducting thorough research on the import landscape is essential for enhancing the efficiency of import activities.
Businesses face diverse input and output customers that shift based on domestic consumption needs The stability and concentration of output customers vary according to the company's operational conditions and its ability to adapt to market demand and supply fluctuations This flexibility allows companies to select suitable business partners, maximizing profitability.
In the import business, various payment methods are utilized, including letters of credit, collections, and money transfers through representative banks The chosen payment method is mutually agreed upon by both parties and outlined in the contract terms Typically, hard foreign currencies, primarily U.S dollars, are used for these transactions Consequently, the efficiency of payment methods is significantly influenced by the exchange rate between domestic and foreign currencies Importers must prioritize monitoring and analyzing exchange rate fluctuations through various information channels to enhance their payment effectiveness.
Import activities in Vietnam and globally are influenced by various legal systems due to the involvement of multiple partners from different nationalities Businesses engaged in imports must adhere to the laws and procedures of the foreign country, their partner, and the host country, ensuring compliance with regulations regarding prohibited goods Strict adherence to these legal provisions is essential for achieving positive business outcomes, as a law-abiding environment enhances the effectiveness and results of import operations.
In today's information age, effective communication with partners relies on modern technologies such as Telex, Fax, and especially email and contemporary communication networks An efficient information exchange system within enterprises significantly impacts import activities, enhancing the ability to capture and process information promptly This not only reduces time and business costs but also mitigates risks for companies.
Import activities involve the transportation of goods across national borders, typically requiring large volumes to be moved via sea, air, rail, or large trucks This reliance on various transportation modes leads to significant costs that can impact the overall efficiency of businesses engaged in importation Consequently, importing is not merely a transaction but a complex international trade system that encompasses organized economic relations both domestically and globally.
Imports manifest in various forms, with each enterprise engaging in import activities tailored to their unique business environment and objectives The following outlines the prevalent types of import business activities in our country today.
Entrusted import refers to a process where businesses require goods but lack the authority or expertise to import directly, often due to restrictions like import quotas or insufficient experience In this arrangement, a company delegates the importation tasks to another firm, which handles negotiations with foreign partners, manages necessary procedures, and signs the import contract The original company, known as the entrusting party, receives a portion of the compensation, termed the entrustment fee, based on their agreement with the importing entity.
Proprietary import refers to the activities and imports conducted by a direct importing enterprise, which can be categorized into two types: commercial imports and non-commercial imports Commercial imports, which are regulated by the State to align with societal consumption needs, must be registered with the Ministry of Trade, which also prepares an annual import plan A license from the Ministry of Trade is required for these goods In contrast, non-commercial imports are goods not intended for direct business use, are not managed by the State, and fall outside the State's management plan; therefore, no license from the Ministry of Commerce is necessary for customs clearance of these goods.
Joint-venture import refers to a collaborative business model where enterprises voluntarily associate to conduct import activities, with at least one party acting as a direct importer This partnership aims to leverage collective skills to optimize transactions and develop strategies for import operations, ensuring mutual benefits through shared profits and losses based on capital contributions Compared to direct importing, this approach minimizes risks for businesses, as responsibilities and obligations are proportionate to each party's investment Expenses, taxes, and profit distribution are determined according to the agreed capital contribution ratio Companies engaged in joint-venture imports must establish two types of contracts: one with their foreign sales partner and another joint venture agreement with their collaborating businesses.
Direct import involves a direct relationship between importers and exporters, allowing them to negotiate prices, transaction methods, payment options, and delivery conditions This approach fosters strong, stable relationships with suppliers, minimizes intermediary costs, and enhances business competitiveness.
In direct transactions, buyers and sellers engage without binding commitments, allowing buyers to independently import goods through import-export enterprises These enterprises must thoroughly analyze domestic and international markets, calculate costs for profitability, and adhere to state and international regulations They invest their own capital, bearing the risks of losses while reaping all profits When importing for self-trading, enterprises can deduct import turnover, but must pay sales and profit taxes upon consuming imported goods Typically, an import contract with a foreign entity suffices, with a domestic consumption contract established post-arrival of the goods.
Indirect import is the form through the Centers Trade, Import Brokerage Services through commercial intermediaries This form of import is quite similar to the form of consignment import.
Theory of improving business efficiency at enterprises
1.2.1 The concept of business efficiency
In today's market economy, enterprises must engage in effective production and business activities to ensure their stability, long-term development, and the improvement of employee living standards while meeting societal demands Business performance serves as a key indicator of the quality of these activities, reflecting management capabilities and the efficient use of resources to achieve optimal results at minimal costs However, reaching a consensus on the definition of economic efficiency remains challenging.
According to the first concept, Stephen E Margolis supposed that
Efficiency in economic activity is defined as the revenue generated from the consumption of goods, reflecting the production and business outcomes of an enterprise This concept highlights the scale of business operations, the ability to meet market demands, and the company's competitiveness However, equating revenue with efficiency overlooks the significance of input costs required to achieve that revenue An increase in revenue does not necessarily indicate greater efficiency, especially if it is accompanied by rising input costs Therefore, efficiency can only be accurately assessed when production and business results grow in proportion to costs.
Business efficiency is defined as the difference between the results achieved and the costs incurred, essentially representing profit or loss from business activities This concept highlights the crucial link between efficiency and economic performance, emphasizing the relationship between outcomes and costs while reflecting the utilization of production resources However, it fails to address the dynamic correlation between the quantity and quality of results versus costs In practice, businesses may experience scenarios where large operations incur high costs with modest revenue, while smaller enterprises achieve profit targets with lower costs, indicating that profit alone does not comprehensively measure overall business performance.
The concept of business efficiency revolves around maximizing human satisfaction, which is gauged by the aggregate willingness to pay for goods and services It emphasizes the relationship between achieved results and consumed costs, assessing how effectively additional resources are utilized in a business context This analysis determines whether increases in output are justified by corresponding increases in input costs, guiding enterprises on whether to expand operations However, this perspective is limited, as it focuses solely on incremental results and cost increases, neglecting a comprehensive evaluation of the overall performance of the entire business.
Many managers believe that business performance is primarily defined by the ratio of achieved results to the costs incurred in achieving those results Manfred Kuhn states, “Efficiency is determined by taking the result and calculating the unit value divided by the business cost.” This perspective highlights the importance of resource utilization in relation to the outcomes produced, emphasizing the need to evaluate how resource waste impacts result generation.
The fifth concept defines business efficiency as the extent to which it meets the fundamental economic law of socialism, emphasizing the importance of fulfilling employees' living standards However, measuring effectiveness in this context presents significant challenges.
Business efficiency is an economic concept that measures how effectively an enterprise utilizes its production resources and management practices to achieve its objectives at minimal cost The evaluation of resource usage is determined by the results produced, allowing for an assessment of how well each resource contributes to overall performance.
1.2.2 The concept of import business efficiency at enterprises
Ensuring the continuous improvement of import business efficiency is a key concern for any economy today Economic efficiency is evaluated by the market and serves as a guiding standard for enterprise operations Accurately defining the nature of business efficiency in import activities is essential for establishing criteria to evaluate import efficiency The effectiveness of import operations is measured by the financial benefits derived from importing goods and services, which involves comparing costs with results Costs can manifest in various forms, including production costs, social labor costs, and both domestic and international expenses Consequently, indicators such as the quantity of imported goods, import turnover, national income, and profit are used to assess efficiency Ultimately, the efficiency of an import business reflects its ability to utilize resources effectively, achieving favorable results that exceed associated costs.
1.2.3 Content of improving business efficiency at enterprises:
Theory of improving business efficiency
To enhance business efficiency and improve performance measurement indicators, it is essential to analyze the causes of advantages, disadvantages, and shortcomings in the business activities and raw material importation of enterprises.
Principle 1: Align cost management with the goal of profit growth and sales
Many companies overlook the critical role of integrating cost management with their business strategy, which is essential for sustainable growth To achieve high profit margins and rapid growth, businesses must effectively balance two key factors: reducing costs and boosting sales.
High business expenses can restrict investment in growth initiatives, putting companies at a disadvantage compared to competitors who maintain cost-effectiveness These rivals can achieve comparable or superior profits while allocating funds towards sales promotions, marketing, and innovation However, an excessive focus on cost-cutting without investing in long-term growth can result in stagnation and weaken the company's market position.
Principle 2: Adjust cost-cutting goals to suit actual spending and revenue and specific business strategies
To drive effective cost reductions, a company should establish an appealing profit growth target that motivates managers to explore various cost-saving strategies It is crucial to delineate the percentage of profit derived from these cost reductions versus gains from other business improvements Additionally, when setting cost-cutting objectives, companies must consider three key factors that must remain balanced, ensuring that no single aspect overshadows the others: the comparison of cost reductions with expenses incurred by other departments within the organization.
How do cost reductions compare with competitors' similar costs? What level of costs are needed to support the intended growth goals and ensure that the business is not impacted?
Principle 3: Distinguish between good costs and bad costs
Effective cost management is crucial for achieving both cost reduction and business growth Managers face the challenge of minimizing expenses without sacrificing essential capabilities or competitiveness The solution lies in identifying which costs contribute to profit enhancement and which can be eliminated, enabling a transition from mere savings to a profitable growth trajectory.
Managers must evaluate which costs are essential for maintaining a competitive edge and identify unnecessary expenses They need to consider potential reductions in sales staff benefits and costs associated with human resource management, finance, and accounting By analyzing factors that influence current returns and the advantages of reinvestment, managers can differentiate between good and bad costs This strategic cost adjustment is crucial for optimizing profits and establishing a distinct competitive advantage for their businesses.
Principle 4: Build the right conditions for current cost management
Changing management and organizational processes are always the prerequisites for the most effective cost management activities This can be done in a few different ways.
– Firstly, the company builds a focused financial reporting system, thereby providing details on specific cost areas in each business division.
– Second, the management introduces new methods to monitor the performance of expenses and specific solutions to prevent misspending.
The company identifies a set of "cost centers" that fall under the direct oversight of senior management, encompassing expenses related to essential functional operations as well as major business activities.
1.2.4 Measure to improve import business efficiency at ELECBIKE., JSC
Indicators reflecting the import business efficiency of enterprises16
When evaluating the effectiveness of an import business, it is essential to utilize specific criteria that clearly indicate the level of economic efficiency achieved during each business period These key performance indicators help determine whether the efficiency is high or low, providing valuable insights into the overall performance of the business.
Import profit serves as a key economic efficiency indicator, reflecting the overall outcomes of business activities It is essential for sustaining the enterprise's operations and improving the living standards of its workers Calculated based on costs and revenues, import turnover represents the total income generated from the sale of goods and services over a specific period, typically a year Import costs encompass the necessary expenses incurred during the process of importing goods from abroad The formula for calculating import profit integrates these elements to provide a clear financial picture.
Import Profit = Import Revenue - Import Cost
Import profit refers to the difference between the revenue generated from imports and the associated costs incurred by an enterprise in its import activities This metric serves as a key indicator of the efficiency and effectiveness of an enterprise's import business operations.
The profit-to-cost ratio of imports measures the revenue generated from imported goods against the expenses incurred in purchasing them While this ratio is essential for assessing economic efficiency in import businesses, focusing solely on profit does not provide a complete picture of operational effectiveness Therefore, it is crucial to also consider the rate of import turnover for a comprehensive evaluation of business performance.
In which: H1 is the import profit rate
Ln is the profit from the sale of imported goods
Cn is the cost of import
This indicator reflects the profit generated for each unit of service cost associated with import activities A higher value of this indicator signifies greater profitability for the enterprise, demonstrating the efficiency of its business operations.
Import profit ratio by revenue This indicator is determined by the percentage between the profit earned and sales.
In which: H2 is the ratio of import profit to sales
Meaning: This indicator shows how much profit will be in each unit of revenue earned from import activities The higher this indicator is, the higher the business efficiency achieves.
1.3.3 Import profit ratio by working capital
In which: H3 is the ratio of import profit to working capital
The import profit indicator measures the profitability gained from every dollar spent on import activities A higher efficiency in capital utilization and an increased return rate on imports signify that an enterprise is effectively leveraging its working capital, demonstrating greater operational efficiency.
Indicator 1: Efficient use of imported fixed capital
In which: H4 is the efficient use of imported fixed capital
Ln is import profit VCDn is the fixed capital invested in import activities
This indicator measures the profit generated for each unit of fixed capital invested in import activities A higher index signifies greater profitability from the fixed capital utilized in imports, indicating a more efficient use of resources and an improved financial situation.
Indicator 2: Effective use of imported working capital
In which: H5 is the efficient use of imported working capital
Ln is the profit earned from import activities VLDn is working capital invested in import activities
This indicator measures the profit generated for each unit of working capital invested in import activities A higher index reflects a greater source of working capital for the enterprise's import operations, indicating more effective utilization of working capital.
Indicator 3: Turnover of working capital
In which: H6 is the turnover of imported working capital
DT is the net revenue from import activities
VLDn is the average working capital invested in import activities over 12 months
Meaning: This indicator shows the number of days to complete a business cycle, the larger the number, it shows that the business is operating stably and using working capital effectively.
Indicator 4: Turnover of imported capital
In which: H7 is the turnover of all imported capital
DT is the revenue from import activities
VN capital for import activities
This indicator reflects the revenue generated for each dollar of capital utilized in import activities, highlighting the company's capital turnover rate during these operations A higher index signifies a quicker capital turnover, demonstrating an effective ability to manage and utilize imported capital efficiently.
1.3.4 Effective use of imported labor
Indicator 1: Profitability of an employee when engaged in import activities
In which: H8 is the rate of return of a worker when engaged in import activities
Ln is the profit earned from import activities LDn is the number of workers engaged in import activities
This indicator reflects the annual profit generated per employee engaged in import activities, highlighting the overall labor quality within the company A higher index signifies better employee performance and efficiency, indicating a more profitable enterprise.
Indicator 2: Average revenue per employee engaged in import activities password
In which: H9 is the average revenue per employee engaged in the activity import
Dn is the revenue from import activities LDn is the number of workers engaged in import activities
This indicator reflects the revenue generated by each employee involved in import activities, serving as a measure of average labor productivity within the company Higher labor productivity signifies improved labor quality and indicates a more efficient utilization of workforce resources by the enterprise.
Factors affecting business efficiency of import activities
Human resources are crucial to the success of import businesses, as they directly influence operations and performance Effective import activities require a workforce with management qualifications, knowledge of both domestic and international markets, marketing skills, business experience, foreign language proficiency, and strategic planning abilities Therefore, careful selection and recruitment of human resources are essential, ensuring that employees are positioned according to their skills and expertise for optimal efficiency In an increasingly competitive economic environment, having qualified human resources significantly enhances the competitiveness and effectiveness of an enterprise's import operations.
The financial strength of an enterprise is crucial for successful import activities, as businesses must explore various capital-raising options, including equity, contributed capital, and bank loans Currently, the Center for Import and Export of marine equipment is preparing for equitization, a significant step that enables companies to attract substantial capital from stock investors to enhance production and business operations Limited capital can hinder a business's ability to execute foreign trade contracts, making it challenging to ensure timely payments to partners during transactions.
A strong financial foundation empowers business owners to be proactive and self-sufficient, while talent potential highlights the business's competitive edge in the market This combination enhances the organization's ability to adapt and respond effectively to various business situations.
Intangible facilities and equipment of the enterprise
The efficiency of an import business is significantly influenced by the development of its material and technical facilities, including warehouses, machinery, and transportation systems These elements enhance labor productivity and product quality, facilitating a smoother import process while minimizing intermediary costs The overall quality of an enterprise's import operations is closely tied to the adequacy and uniformity of its facilities Additionally, a company's intangible assets, such as its reputation, market position, brand identity, and social relationships, play a crucial role in its success These invisible factors, although not immediately apparent, can yield substantial benefits and must be consistently nurtured to maintain a competitive edge in the market.
Qualification of human resources and level management
In the face of the robust development of the global economy, businesses involved in import activities must cultivate a flexible and agile team of officials and managers This adaptability is crucial for seizing opportunities and overcoming challenges to achieve success It is essential to respect the two key stages of the import process: importing goods and consuming them These stages ensure that imports comply with contracts and are quickly integrated into the market, facilitating rapid capital turnover and reinvestment, ultimately enhancing the efficiency of import enterprises.
A well-defined business strategy is crucial for the survival and growth of any organization, serving as a roadmap that directs the company towards its goals The significance of an effective business strategy is evident in its ability to provide clear direction, ensuring that all efforts align with the overarching objectives of the business.
A well-defined business strategy is essential for long-term operational success, as it provides a clear direction and framework for deployment Without a solid strategy, organizations risk losing focus and only addressing immediate concerns, neglecting broader, long-term goals By analyzing and forecasting the business environment, a robust strategy enables companies to remain flexible and proactive in adapting to market changes, ensuring sustainable growth and alignment with their overarching objectives.
A well-defined business strategy enables enterprises to actively pursue suitable business directions by leveraging opportunities, mitigating risks, and enhancing their inherent strengths By effectively identifying and seizing opportunities while managing potential risks, businesses can optimize their resources and foster sustainable growth, ultimately promoting their competitive advantages in the market.
– Strategy creates an operating trajectory for the business, helping businesses link individuals with other interests towards a common goal.
In today's globalized economy, business strategy serves as a crucial competitive tool for enterprises, fostering interdependence and influencing market dynamics This environment has intensified competition, compelling businesses to leverage various factors such as price, quality, advertising, and marketing, alongside their strategic approaches, to gain an edge in the market.
Businesses must recognize and adhere to government macroeconomic policies, as these policies prioritize or hinder the development of various industries, directly influencing business efficiency and outcomes In the realm of import activities, regulations dictate that businesses operate within permitted scopes aligned with socio-economic objectives, which can sometimes compromise their import efficiency and interests The government manages imports through various tools, including import permits, tariffs, quotas, exchange rate regimes, and foreign currency controls These regulatory factors significantly impact the performance of enterprises, particularly those engaged in imports A robust legal environment is essential for fostering favorable conditions that allow businesses to leverage their internal resources effectively.
Businesses must consider both short-term and long-term economic factors, as well as government intervention, when making investment decisions Key macroeconomic factors play a crucial role in determining the viability of investments in various industries and regions.
GDP growth rate of the country (Growth)
The GDP growth rate, or gross domestic product, represents the total value of all final goods and services produced within a country's borders during a specific time frame It reflects the overall economic activities occurring in the nation, irrespective of the ownership of the production.
Businesses use labor and investment capital to produce goods and services Existing production technology determines how much output can be produced from a given amount of capital and labor.
High production output of enterprises means that enterprises use investment capital effectively, have abundant and highly qualified labor resources, and apply modern science and technology in production and business.
Thus, the GDP growth rate of an economy is high or low, both reflecting the production and business efficiency of enterprises in that economy.
J Bondin and M Friedman assert that inflation is driven by an increase in the circulation of money, which leads to rising prices According to Friedman, "inflation is everywhere, a phenomenon of money circulation," emphasizing that inflation arises only when the growth of money supply outpaces production rates.
Vietnamese economist Mr Bui Huy Khoat highlights the concept of "demand-pull inflation," which occurs when an imbalance between supply and demand leads to rising prices As demand for goods increases beyond the economy's supply capacity, inflation emerges as a natural response to restore equilibrium between supply and demand.
Inflation arises when the money supply surpasses permissible levels, leading to the depreciation of the domestic currency against foreign currencies This phenomenon disrupts normal business operations and diminishes the government's ability to regulate the economy through monetary policy and taxation, as tax rates lose significance in the context of hyperinflation One major consequence of inflation is its tendency to hinder long-term investments while encouraging speculative short-term investments, ultimately resulting in a scarcity of goods.
The necessary to improve the business efficiency of import activities
In a competitive market, businesses must constantly strive to outperform one another to thrive The intensity of competition varies by industry and market accessibility To ensure survival and growth, companies need to consistently enhance their performance and adapt to changing conditions.
The increasing scarcity and competitive demand for resources necessitate efficient exploitation and conservation of these resources To meet business objectives, companies must optimize their internal conditions and enhance the productivity of their resources while minimizing costs Consequently, improving operational efficiency, particularly in import activities, has become a critical focus for businesses.
Due to limited resource availability, the conditions for production development are constrained, making in-depth development essential for the efficient use of resources and optimal outcomes.
Enhancing business efficiency is essential for competition and growth, driving companies to innovate in management and technology This competitive landscape encourages enterprises to improve product quality and reduce production costs to secure their market position While competition can strengthen a business, it also poses risks that may threaten its survival To thrive and expand, companies must focus on delivering high-quality goods and services at competitive prices Additionally, improving labor efficiency is crucial, as it leads to increased output, better quality, and lower production costs.
As Vietnam's economy increasingly integrates with regional and global markets, local businesses are experiencing heightened competition from foreign enterprises Enhancing operational efficiency has become crucial for these businesses to ensure their survival and success in this challenging environment.
Improving business efficiency is the base for raising income for owners and employees in enterprises and improving living standards of people in general.
In today's competitive landscape, businesses must enhance operational efficiency while simultaneously improving employee well-being This dual focus not only drives social impact but also strengthens the resilience and growth potential of each enterprise.
2 CHAPTER 2: CURRENT SITUATION OF IMPROVING BUSINESS EFFICIENCY OF MATERIALS IMPORT
AT ELECTRICITY BICYCLE MOTORBIKE JOINT
Overview of Electricity Bicycle Motorbike Joint Stock Company29 1 History of formation and development of Electricity Bicycle
2.1.1 History of formation and development of Electricity Bicycle
General information about the company
Company name: ELECTRICITY BICYCLE MOTORBIKE JOINT STOCK COMPANY
Charter capital: 914,259,270,000 VND (Nine hundred and fourteen billion, two hundred and fifty nine million, two hundred and seventy thousand dong)
Head office: No 10, Lane 9, Luong Dinh Cua, Kim Lien Ward, Dong Da District, Hanoi City, Vietnam
Vision: To develop into a multi-industry economic group with a leading position in the region, respected in the international market.
Mission: Constantly innovating, creating, pioneering in production and also providing quality and environmentally friendly products and services for a better life for each person and the sustainable development of society.
Core Values: “Take 5 words: TIEN – TIN – TOC – TRI – TAM as the core value”
TIEN embodies the spirit of pioneering enthusiasm and positivity, driving forward with a commitment to volunteerism With a bold approach that encourages innovative thinking and decisive action, TIEN emphasizes the importance of taking responsibility, establishing a strong foundation for all endeavors.
TIN: Always consistent in commitments, towards sustainable development, achieving the highest satisfaction of customers and partners. Consider TIN as your own honor.
TOC: Adapting quickly to all changes, emphasizing the word “Speed” in decision-making, excellent execution and respect for discipline Take speed and results as the guiding principle of action.
TRI fosters a culture of innovative and positive thinking, encouraging proactive technological advancement and the development of a learning organization It emphasizes self-directed learning and a strong desire for growth, bringing together elite individuals who excel in their respective fields.
TAM serves as a crucial foundation for all endeavors, emphasizing the importance of working with integrity and a genuine commitment to enhancing quality of life and promoting sustainable societal development It fosters a harmonious relationship between internal and external stakeholders, ultimately contributing to a positive and fulfilling work environment.
Figure 2.1: The process of formation and development of
Source: Annual report of Electricity Bicycle Motorbike Joint Stock Company
2007: Electricity Bicycle Motorbike Joint Stock Company became a public company, officially listed 15 million shares on the stock exchange
2015: Expanding exports to 20 countries such as the United States, Brazil, Argentina, Mexico, Singapore, etc.
2019: Invest in new businesses, boom in new production and business industries, including importing and producing electric vehicles
In 2020: focus on developing green energy Cooperating with Japan, Korea to transfer technology
In 2021, the focus was on restructuring ownership within the industry and reorganizing specialized departments to align with an online model, aimed at optimizing personnel recruitment and management in the energy sector This strategic approach enabled the organization to effectively navigate challenges posed by pandemics and natural disasters, ultimately achieving business results that surpassed expectations while continuously enhancing its market position.
2.1.2 Organizational structure of the company's management apparatus
The governance model of Electricity Bicycle Motorbike Joint Stock Company includes:
The General Meeting of Shareholders serves as the Company's supreme authority, empowered to make decisions on issues outlined by both the Law and the Company's Charter.
The Administrative Council, operating under the General Meeting of Shareholders, serves as the Company's governing body with full authority to make decisions regarding the Company's objectives and interests, except for matters designated to the General Meeting The Council is responsible for the regular supervision of business operations, internal controls, and risk management activities within the Company.
Figure 2.2: Governance Model of ELEBIKE.,JSC Source: Annual report of Electricity Bicycle Motorbike Joint Stock Company
The Administrative Council oversees various departments essential for the effective operation and management of the company's production and business activities Key departments play a crucial role in ensuring smooth functioning and strategic decision-making within the organization.
The Supervisory Board is responsible for thoroughly overseeing all Company activities, including the appraisal of annual financial statements and addressing specific financial issues as needed or requested by shareholders It reports to the General Meeting of Shareholders on the accuracy and legitimacy of financial documents, accounting records, and the effectiveness of the internal control system.
The Board of Directors oversees and manages the daily production and business operations of the Company, with members appointed or hired by the board The Deputy Director serves as the Assistant to the Director, supporting these management activities.
And finally, there are specialized departments with specific functions such as: Sales Department, Human Resources Department, Finance - Accounting Department, Construction Investment Department, Communication - Marketing Department, etc.
Regarding the distribution and appearance of ELEBIKE.,JSC's subsidiaries nationwide:
Electricity Bicycle Motorbike Joint Stock Company delivers high-quality products to consumers across Vietnam and exports to 35 countries worldwide, supported by a vast network of 30,000 distributors and points of sale With 120 branches both domestically and internationally, the company successfully penetrates premium markets in regions like Korea, Europe, the USA, and Canada It operates 11 production facilities, including 10 domestic factories covering approximately 250,000 m² across North, Central, and South Vietnam, along with one overseas factory to effectively meet market demands.
The Electricity Bicycle Motorbike Joint Stock Company operates through 22 subsidiaries and affiliated companies across various sectors, establishing a robust and diverse network that is unique among corporations This extensive reach facilitates better access to consumers and enhances the brand's recognition throughout the country.
Business Result of Electricity Bicycle Motorbike Joint Stock
The income statement is an essential annual financial document that encapsulates the overall business performance and results for the year It showcases the total revenue generated from products, labor, and services, along with the associated expenses incurred to achieve those outcomes This article provides a comprehensive overview of the business performance of Electricity Bicycle Motorbike Joint Stock Company from 2019 to 2021.
Table 2.1: Business results of ELEBIKE.,JSC in the period of 2019- 2021
8 The profit or loss in associated companies joint venture (1,895) 376 964 -120% 156%
18 Net Profit After Taxes-NPAT 105.748 89.506 136,682 -15% 53%
Source: Annual report of Electricity Bicycle Motorbike Joint Stock Company
To analyse the financial health of Electricity Bicycle Motorbike Joint Stock Company, the Figure for each year result shown:
Gross Revenue Total cost Net Profit After Taxes
Figure 2.3: The revenue, expenses and profit of ELEBIKE.,JSC in the period of 2019 -2021 (Unit: Million VND)
Source: Annual report of Electricity Bicycle Motorbike Joint Stock Company
From 2019 to 2021, Electricity Bicycle Motorbike Joint Stock Company demonstrated consistent profitability, with net profit after tax increasing from 105,748 million in 2019 to 136,682 million in 2021 Although net profit dipped by 15% in 2020 to 89,506 million due to an 8% rise in costs despite a 12% increase in revenue, the company rebounded in 2021 with a remarkable 32% revenue growth and only a 12% rise in costs, resulting in a 53% increase in net profit compared to 2020 This upward trend indicates improved overall business performance in 2021 relative to previous years, highlighting the importance of managing costs and revenue effectively To sustain this positive trajectory, the company should implement strategies to further enhance its business growth.
Expenses for financial activities Sales expenses General and administrative expenses
Figure 2.4: Expense analysis chart of ELEBIKE.,JSC in the period of
Source: Annual report of Electricity Bicycle Motorbike Joint Stock Company
The chart illustrates that sales expenses constitute the largest portion of enterprise costs, with a noticeable upward trend over three years In 2020, there was a 2% decline in daily sales expenses compared to 2019; however, this figure surged by 25% in 2021 Conversely, administrative expenses showed a positive trend, experiencing a decrease of 6% in 2021 compared to a 19% increase in 2020 Additionally, financial expenses also fell by 6% in 2021 relative to 2020, indicating a shift in the cost structure of the business.
2020 increased by 16% compared to 2019, showing that financial costs are well controlled by enterprises and showing positive signs contribute a part to the profit increase in 2021 as mentioned above.
Analysis of factors affecting the business efficiency of Electricity
The efficiency of production and business is significantly influenced by the human factor, which is crucial for a company's success Even with advanced technology and modern machinery, without skilled workers to manage production, businesses cannot thrive A capable workforce is essential for developing and implementing innovative technologies, thereby enhancing business performance and productivity Human resources are a vital intangible asset for any enterprise However, the Electricity Bicycle Motorbike Joint Stock Company has recently neglected the development of its human resources and lacks an effective remuneration system to attract skilled personnel.
The company's operations are significantly influenced by the human factor, but in recent years, a persistent capital shortage has emerged To finance its activities, the company has relied on short-term loans from banks, incurring annual expenses for interest payments Additionally, the inability to secure long-term loans has led to a portion of short-term financing being allocated for long-term investments, adversely affecting the business's balance of payments.
In the modern landscape, technological advancements significantly impact business operations, market positioning, and competitive edge, particularly in the electric motorcycle sector Despite ongoing improvements in technology, companies like Evgo struggle to meet the diverse demands of the electric vehicle market, which has allowed competitors such as Vinfast, Dkbike, Pega, and Sufat to gain recognition among consumers To enhance its market presence, Evgo must prioritize not only its production technology but also robust marketing, communication, and promotional strategies aimed at effectively reaching its target audience.
The effectiveness of management and corporate governance has been inadequate, failing to adapt to the increasingly volatile business environment, which is crucial for a company's success Senior management plays a pivotal role in influencing the company's growth and sustainability, with the operational efficiency of governance heavily reliant on their professional qualifications and the organizational structure in place High production and business costs have arisen from an outdated management system, and despite the company's long history, it continues to invest in infrastructure to enhance business outcomes Additionally, rising receivables due to inefficient payment practices, coupled with fierce competition in the electric vehicle market, compel the company to adopt credit policies to attract customers However, there is a lack of optimal economic strategies for balancing bank loans and discounting policies to effectively manage receivables and incentivize early payments.
According to statistics from the Vietnam Association of Motorcycle Manufacturers, the total sales of all members have reached 3,254,964 units in
In 2019, Vietnam's motorcycle market reached 3,254,964 units, marking the fourth consecutive year of exceeding 3 million units However, this year also saw a decline in sales for the first time since 2018, when sales peaked at nearly 3.4 million units, indicating a shift towards market saturation The traditional motorcycle market is facing challenges as user preferences diversify, leading to a decrease in demand Additionally, projections for 2020 suggest that motorcycle sales may continue to decline, largely due to the adverse effects of the Covid-19 pandemic.
In 2019, Vietnam witnessed significant growth in the electric motorcycle market, with numerous companies, including Pega, Mbigo, and Yadea, launching new models This surge in electric vehicle options followed VinFast's introduction of the Klara line in 2018, highlighting the increasing popularity and innovation in the industry.
The electric vehicle market presents significant opportunities for manufacturers, as highlighted by Gianluca Fiume, the general director of Piaggio Vietnam, who announced plans to launch an electric Vespa model in the country.
To effectively compete with traditional motorbikes, electric vehicle manufacturers must address high prices, particularly for models utilizing Lithium batteries Additionally, shifting consumer buying psychology is crucial, as many still prioritize convenience and speed Currently, electric vehicles require a charging time of 8 to 12 hours, which poses a challenge in meeting these consumer needs.
Legal and institutional factors significantly impact the business performance of Electricity Bicycle Motorbike Joint Stock Company As the company transitions from a limited liability enterprise to a joint stock entity, it must navigate a complex landscape of laws, decrees, and guiding circulars that govern joint stock companies and the stock market However, the stock market and the equitization process in Vietnam are relatively new, with existing laws still being refined This ongoing development presents challenges, as numerous regulations require revisions to align with evolving market conditions Consequently, the risk of regulatory changes from state management agencies is both inevitable and unavoidable.
Tax policy plays a crucial role in mobilizing sustainable revenue sources for the budget while fostering a conducive environment for production and business activities It attracts investment in key sectors and locations, promotes research and innovation, and encourages the application of science and technology Additionally, effective tax policy supports the efficient use of natural resources, enhances environmental protection, and contributes to the development of cultural and social activities.
Current situation of improving business efficiency of materials
Chapter 1.3 discusses indicators that reflect the business efficiency of enterprises' import activities The following table presents a group of indicators specifically related to the profitability of these import activities.
Table 2.2: Indicators related to the profit of import activities of enterprises (Unit: Million dong)
Import profit ratio by cost 24% 17% 24%
Ratio of import profit to revenue 2% 2% 2%
Import profit ratio by working capital
Between 2019 and 2021, the import profit of Electricity Bicycle Motorbike Joint Stock Company demonstrated a positive trend, with profits rising from 1,458.33 million VND in 2019 to 1,608.67 million VND in 2020, and reaching 2,168.00 million VND in 2021 This consistent growth indicates that the company's business performance in importing electric vehicle equipment is progressing well, achieving stable profit increases throughout the survey period Notably, in 2020, the profit index saw a 10% rise compared to the previous year.
The import profit ratio indicates the relationship between profits from electric vehicle product sales and the costs incurred for importing electric vehicle materials Specifically, for every 100 dong spent on imports, an average profit of 24 dong is generated Throughout the observed period, the profit margin consistently remained at 24%, despite a dip to 17% in 2020 This demonstrates that while the import profit margin has not increased, it has been effectively managed and stabilized at 24%.
The import profit to sales ratio for Electricity Bicycle Motorbike Joint Stock Company remains unchanged at 2%, indicating that for every 100 VND in revenue, the company generates a profit of 2 VND It is crucial for the company to investigate the reasons behind this stagnant import profit ratio during the survey period and to implement effective solutions to enhance profitability.
From 2019 to 2021, the import profit ratio relative to working capital remained stable at 2% This means that for every 100 dong invested in business capital, only 2 dong of profit was generated from importing electric vehicle materials.
Specifically, the group of indicators of capital efficiency of Electricity Bicycle Motorbike Joint Stock Company over the years fluctuated according to the following table:
Table 2.3: Indicators of capital efficiency (Unit: Million dong)
Efficient use of imported fixed capital 8% 7% 10% Effective use of imported working capital 4% 3% 3%
Turnover of working capital 20.70 20.21 18.69The turnover of all imported capital 1.18 1.19 1.20
The efficiency of imported fixed capital demonstrates that every 100 dong invested in raw materials yielded profits of 8 dong in 2019, 7 dong in 2020, and 10 dong in 2021 This slight upward trend over the three years indicates that while profit growth from fixed capital investments is improving, the changes remain modest.
The efficiency of imported working capital reveals the profit generated for every 100 units invested in import activities, currently at a low level of 3%, peaking at 4% during the investigation period Notably, the efficiency index decreased in 2021 compared to 2019, indicating a negative impact on the importation of bicycle materials that requires urgent improvement An analysis of two key indicators shows that the enterprise is effectively leveraging fixed capital to enhance revenue from working capital This decline in efficiency can be attributed to market volatility stemming from the epidemic, which has significantly affected the electric vehicle consumption market and the manufacturing industry as a whole.
The Electricity Bicycle Motorbike Joint Stock Company has demonstrated a declining trend in working capital turnover over the survey years, with averages of 20.7 days, 20.21 days, and 18.69 days This indicates a decrease in the efficiency of capital utilization within the company's business cycle, suggesting underutilization of working capital Consequently, the duration of each business cycle remains relatively low However, the company has shown that fixed capital plays a more significant role in driving business efficiency and profitability, while working capital management appears to be stable and optimized in its operations.
To measure the efficiency of using imported labor, the following indicators reflect the human resource situation of enterprises.
Table 2.4: The human resource of enterprises
Profitability of a worker when engaged in import activities 0.05 0.05 0.06
Average revenue per employee engaged in import activities 2.47 2.94 3.34
In the years 2019 to 2021, each of the 100 employees engaged in import activities generated an average profit of 5 dong in 2019 and 6 dong in 2021, highlighting a consistent increase in profitability per employee over this period.
2020 and 6 dong in 2021 The index has not yet increased strongly and was only stable during the survey period.
Over the past three years, the average revenue generated per employee involved in import activities has shown a steady increase, rising from 2.27 dong in 2019 to 2.94 dong in 2020, and projected to reach 3.34 dong in 2021 This trend indicates that employees are effectively contributing to revenue growth, reflecting an improvement in labor productivity However, to further enhance profitability and reduce costs, businesses must focus on improving the quality of labor and optimizing production processes.
General assessment of the business efficiency of Electricity Bicycle
2.4.1 Achievements in improving the efficiency of import activities of the company
Despite facing challenges in the competitive electric vehicle market, particularly with bilateral agreements and a concentrated import market, the company has achieved significant revenue and profit growth due to a strategic business plan, becoming profitable within three years By establishing a reliable electric motorcycle product line, the company has earned customer trust and solidified its position in the industry, effectively leveraging its advantages to enhance business efficiency and outcomes.
Despite facing numerous challenges in the bilateral agreement market and intense competition in the electric motorcycle sector, the company has achieved significant revenue and profit growth through a strategic business plan Over the past three years, it has consistently delivered profitable vehicles, earning customer trust and establishing a solid foothold in the electric vehicle industry By leveraging its advantages, the company has successfully enhanced its business efficiency and performance.
Table 2.5: Types of Income from 2019 to 2021 in ELEBIKE.,JSC
The company's business results from 2019 to 2021 indicate a strong growth trajectory, with sales revenue increasing by 11% in 2020 and an impressive 31% in 2021, nearly tripling the 2020 figures Net Revenue rose significantly from VND 4,807,096 million in 2019 to VND 5,360,118 million in 2020, and further surged to VND 7,074,612 million by the end of 2021 This growth can be attributed to the company's strategic focus on electric vehicle production and sales during this period Although sales deductions such as trade discounts and returns impacted revenue, income from financial activities saw a notable jump to VND 24,319 million in 2020, nearly doubling from 2019 However, in 2021, this income only increased slightly by 9% due to fluctuations in Vietnam's economic landscape Despite the challenges posed by the Covid epidemic, the company successfully navigated this complex period, maintaining stable growth in the electric vehicle sector.
Table 2.6: Cost distribution from 2019 to 2021 in ELEBIKE.,JSC
8 The profit or loss in associated companies joint venture
The income statement reveals that overall expense management within the enterprise is effective, with financial activity expenses rising by 16% in 2020 compared to the previous year.
In 2019, expenses amounted to 21,397 million dong, but by 2021, financial activity expenses had decreased by 6% compared to 2020, largely due to a significant rise in interest expenses Despite a 2% reduction in sales expenses since 2019, revenue increased by 11%, enabling businesses to effectively manage selling costs per product However, rising general and administrative expenses, along with profit tax, require the company's attention and implementation of control measures to minimize costs and enhance overall business efficiency.
Table 2.7: Profit of ELEBIKE.,JSC from 2019 to 2021
In 2019, the Net Profit and Net Profit After Taxes of the Electricity Bicycle Motorbike Joint Stock Company saw a decline of 7% and 15%, respectively, compared to the previous year However, the company's performance improved significantly in 2021, with a Net Profit of 182,474 million VND, marking a 47% increase from 2020, while Net Profit After Taxes doubled This demonstrates the company's ability to manage and achieve robust profit growth despite the challenging economic environment.
In addition, other achievements that the company has achieved include:
The Group successfully completed Phase 1 of its comprehensive restructuring project, enhancing its senior leadership team with innovative and enterprising thinkers It launched a range of new household products, including the EVGO electric motorbike, smart wifi water heater, high-end handmade pots, Korecook rice cooker, eCool air purifier, and alkaline ionized water generator, catering to the needs of Vietnamese families Additionally, the Group is investing in advanced clean water and wastewater treatment projects from Japan and Korea, while progressing on the Tam Duong industrial park project in Vinh Phuc, covering 162.33 hectares The Group has achieved the National Brand status for several consecutive years, ranked among the Top 10 key industrial products in Ho Chi Minh City and Hanoi in 2021, and recognized as one of the Top 100 pioneering enterprises in digital technology application as part of the Winging Vietnamese Brands Program in 2021, alongside numerous other prestigious awards and certifications.
Under the strategic guidance of the Board of Directors, a well-structured business plan has fostered unity among all departments within the company, enhancing individual accountability and commitment to their work.
The company adheres strictly to enterprise laws, securities regulations, and its charter, ensuring compliance with shareholder and board resolutions It also meets the information disclosure requirements for public joint-stock companies Furthermore, the company is committed to enhancing its quality management system and has partnered with Bosch, a leading foreign expert in electric vehicle engines, to drive innovation and improvement.
The company has always well implemented environmental protection measures, constantly researched, improved, and applied new science and technology in operation and production to better protect the environment.
In 2021, the Company adhered to all legal requirements and faced no penalties regarding environmental regulations Additionally, it effectively implemented labor laws, ensuring job security, fair wages, and comprehensive benefits for its employees.
The company has well implemented the provisions of the law related to employees, ensuring jobs, wages, policies, and other remuneration for employees.
The Electricity Bicycle Motorbike Joint Stock Company (ELEBIKE.,JSC) is committed to stable growth by focusing on production and business strategies that ensure consistent revenue growth and market share retention In 2020, the company achieved over 5,562 billion VND in total revenue and contributed 260 billion VND to the State budget With a commitment to innovation, ELEBIKE.,JSC is expanding into new industries and embracing green technology, particularly in clean energy development The company is investing in clean energy sources, including FreeSolar rooftop solar power products, aligning with global and national trends towards renewable energy This initiative is crucial for promoting sustainable development and addressing the ongoing electricity shortage in southern Vietnam, positioning green energy products as a key component of the company's future business strategy.
2.4.2 Limitations and causes in improving the import efficiency of the
The Electricity Bicycle Motorbike Joint Stock Company faces several challenges that hinder its operational efficiency and revenue growth Despite a steady increase in revenue from electric motorcycle production, the profit margin remains low, falling short of the annual target of 1,000,000,000 The company must enhance its adaptability to market fluctuations, focusing on retail strategies to boost sales and strengthen the Evgo brand, which is crucial for job creation Factors such as competition from established brands, rising input costs, and compliance with government regulations on safety and environmental standards further complicate the situation To improve profitability, the company needs to implement cost-saving measures and develop effective employee incentive policies, as current labor productivity does not reflect high profitability Additionally, the recruitment and allocation of labor require optimization to fully harness employee potential and enhance overall business efficiency.
TO IMPROVE BUSINESS EFFICIENCY OF
3.1 Development orientation of Electricity Bicycle Motorbike Joint Stock Company
3.1.1 The main goals of the company
Aiming at sustainable development in the coming time, the company's leaders have given the following development orientations:
ELEBIKE.,JSC effectively manages profit targets through flexible sales strategies, diligent progress monitoring, and strict cost control, ensuring stable revenue growth over the years The company maintains its market share in core areas while actively exploring new markets and increasing exports In 2020, ELEBIKE.,JSC achieved total revenue exceeding 5,562 billion VND and contributed 260 billion VND to the State budget The successful acquisition of Toan My solidified ELEBIKE's leadership in the household goods industry and expanded its production and distribution in southern provinces Committed to innovation, ELEBIKE.,JSC is transforming its operations with green technology, particularly in the Electric Vehicle sector, while also investing in high-tech products and clean energy development.
To foster a productive and safe working environment, it is essential to develop human resources that prioritize labor safety in production This approach not only enhances employee capacity and dedication to the company but also focuses on improving the professional qualifications of workers By ensuring safety in production tasks, organizations can create a supportive atmosphere that promotes growth and development.
Support social community activities committed to stakeholders Bring clean water to the highlands Accompanying the Vietnam Red Cross
3.1.2 Medium and long term strategy
Creating breakthroughs in potential investment sectors such as water supply, renewable energy and especially in Electric motorbike (Evgo).
Expand production and business, improve production capacity
Strengthen supervision through internal audit and control activities, reduce financial and operational risks
In addition, the Company's short- and medium-term related sustainable development goals and key programs include:
Developing high-performance, environmentally friendly products tailored to the needs and capabilities of consumers
Applying environmentally friendly technological advances in the production process
Creating a dynamic business and production environment, promoting personal capacity development and interpersonal interaction to form a workforce with solid expertise and a spirit of cooperation
Enhance and harmonize interests among stakeholders
Building a business model that is economically efficient, responsible for the environment, society, and community
3.2 Solutions to improve business efficiency at Electricity Bicycle Motorbike Joint Stock Company
In 2019, the Internal Audit Committee identified issues regarding receivables, which represented 41.75% of the company's total assets by the end of 2020, reflecting a 1.98% increase from the beginning of the year The corporate governance system adheres to Decree No 155/2020/ND-CP and Circular 116/2020/TT-BTC, focusing on accountability, transparency, fairness, and independent supervision to align the interests of all parties involved To enhance communication with investors, the company plans to establish a dedicated department that utilizes various information platforms, including its website and channels of the State Securities Commission and Ho Chi Minh City Stock Exchange, alongside traditional media outlets Ongoing efforts include ensuring investor rights through timely dividend payments, shareholder meeting preparations, and regular updates on company performance, as well as maintaining an active dialogue with stakeholders through meetings and newsletters The company is committed to accurate and timely information dissemination regarding its operations and shares, while effectively managing the "Shareholders & Investors" section on its website.
Diversify sources of raw materials imported
The company's corporate governance reports for two consecutive years,
SOLUTION AND RECOMMENDATION TO IMPROVE
Development orientation of Electricity Bicycle Motorbike Joint
3.1 Development orientation of Electricity Bicycle Motorbike Joint Stock Company
3.1.1 The main goals of the company
Aiming at sustainable development in the coming time, the company's leaders have given the following development orientations:
ELEBIKE.,JSC effectively manages profit targets by focusing on sales, progress, and cost control to ensure stable growth The company prioritizes production and business operations, achieving consistent revenue growth and maintaining market share in key areas while exploring new markets and increasing exports In 2020, ELEBIKE.,JSC reported total revenue exceeding 5,562 billion VND and contributed 260 billion VND to the State budget The company solidified its leadership in the household goods sector through the successful acquisition of Toan My, enhancing its production and distribution in southern provinces Committed to innovation, ELEBIKE.,JSC is transforming its operations with green technology, particularly in electric vehicles, while also investing in high-tech products and clean energy development.
To foster a positive working environment and enhance employee capabilities, it is essential to prioritize human resource development and ensure labor safety in production By creating a safe workplace, companies can encourage dedication among employees while simultaneously improving their professional qualifications.
Support social community activities committed to stakeholders Bring clean water to the highlands Accompanying the Vietnam Red Cross
3.1.2 Medium and long term strategy
Creating breakthroughs in potential investment sectors such as water supply, renewable energy and especially in Electric motorbike (Evgo).
Expand production and business, improve production capacity
Strengthen supervision through internal audit and control activities, reduce financial and operational risks
In addition, the Company's short- and medium-term related sustainable development goals and key programs include:
Developing high-performance, environmentally friendly products tailored to the needs and capabilities of consumers
Applying environmentally friendly technological advances in the production process
Creating a dynamic business and production environment, promoting personal capacity development and interpersonal interaction to form a workforce with solid expertise and a spirit of cooperation
Enhance and harmonize interests among stakeholders
Building a business model that is economically efficient, responsible for the environment, society, and community
3.2 Solutions to improve business efficiency at Electricity Bicycle Motorbike Joint Stock Company
The Internal Audit Committee continues to emphasize the need for improvement in receivables, which comprised 41.75% of the company's total assets by the end of 2020, reflecting a 1.98% increase since the beginning of the year The corporate governance system adheres to Decree No 155/2020/ND-CP and Circular 116/2020/TT-BTC, promoting accountability, transparency, fairness, and independent oversight while aligning the interests of all parties involved To effectively communicate with investors, the company must establish a dedicated department and utilize various information channels, including its website, the State Securities Commission, and mass media Ongoing efforts include ensuring investor rights through dividend payments, maintaining shareholder lists, publishing monthly operational summaries, and preparing annual reports The company also prioritizes timely updates on business performance, manages shareholder inquiries, and organizes meetings with investors while ensuring accurate reporting of company information across media platforms Regular updates are provided on the "Shareholders & Investors" section of the website, alongside the monthly Investor Newsletter, to foster strong communication with stakeholders.
Diversify sources of raw materials imported
The company's corporate governance reports for two consecutive years,
In 2019 and 2020, the company was recognized in the "Vote for Listed Enterprises of the Year" for small-cap companies, highlighting the need for effective cost control strategies Given the high input prices, it is essential for businesses to diversify their raw material sources while ensuring quality and cost-effectiveness In 2020, the company's cost of goods sold (COGS) increased by 12.6%, surpassing the 11.5% revenue growth, which negatively impacted profit targets Therefore, implementing cost-saving measures is crucial for achieving sustainable profit growth The Group has actively proposed and executed various solutions to manage and reduce business expenses effectively.
Despite a significant rise in salary costs, the Internal Audit Committee advises ongoing assessment of the personnel structure and the establishment of a transparent personnel evaluation system It is crucial to assign responsibilities and evaluate performance based on quantitative criteria, particularly for the executive board, which is vital for guiding the company's success Additionally, there is a need to restructure the capital sources, as the consolidated financial statements indicate that liabilities consistently exceed equity as of December 31.
In 2020, the company's liabilities were 2.4 times greater than its equity, with short-term debt comprising 93.3% of total liabilities, indicating a heavy reliance on bank loans for operations This situation highlights significant liquidity risk and the challenge of maintaining stable long-term working capital, which could lead to increased financial costs The Internal Audit Committee has urged the Board of Directors to prioritize this concern in their operations, emphasizing the importance of addressing these financial risks.
In 2019, the Supervisory Board's recommendations for the Company showed limited improvement However, in 2020, the company implemented a decentralized system, marking a significant first step in clarifying the roles and responsibilities of senior management and division heads This initiative aims to enhance operational efficiency by ensuring that each employee's specific tasks are properly oriented and controlled.
The Internal Audit Committee advocates for the establishment of a Key Performance Indicator (KPI) evaluation system To ensure its effectiveness, the KPI system must be clear, easily understandable, regularly updated, and closely aligned with the daily responsibilities of each role.
Human resource assessment must take place at least once a year to improve the level of departments, especially the support department, which does not follow the sales of the business.
The corporate governance system adheres to Decree No 155/2020/ND-CP and Circular 116/2020/TT-BTC for public companies, focusing on accountability, transparency, fairness, independent monitoring, and aligning stakeholders' interests To effectively communicate with investors, the company has established a dedicated department that utilizes various information tools, including its website and official channels of the State Securities Commission and Ho Chi Minh City Stock Exchange, as well as mass media platforms The company ensures investor rights by adhering to regulations for dividend payments, organizing shareholder meetings, and publishing monthly operational summaries and annual reports It provides timely updates on business performance to shareholders and manages the "Shareholders & Investors" section on its website, ensuring regular and accurate information dissemination Additionally, the company engages with investors through periodic meetings, responds to inquiries, and oversees the accuracy of information related to SHI shares across media channels.
2019, 2020 were included in the list of comments "Vote for Listed Enterprises of the Year" for small-cap companies.
Other pratices to boost Import Efficeiency in Electricity Bicycle
Regularly reviewing and analyzing import data is essential for uncovering supply chain opportunities By employing a thorough analytical approach, importers can identify strategies to lower duties by sourcing from countries with advantageous free-trade agreements like NAFTA Additionally, evaluating transportation modes ensures compliance with requirements Finding cost-reduction methods within the supply chain provides a significant competitive edge.
Partnering with a customs broker to establish a paperless entry process utilizing Electronic Data Interchange (EDI) feeds streamlines the management of information from various vendors This collaboration not only simplifies the entry process but also enhances accuracy, ensuring efficient and timely customs clearance.
To ensure accurate classification declarations to Customs and Border Patrol (CBP), it is crucial to supply brokers with a comprehensive database of imported items This database should include the item or part number, a detailed description of the product, and the relevant Harmonized Tariff System classification number for the United States Providing this information enables brokers to effectively represent your interests in the import process.
Centralize processing for nationwide entries using Remote Location Filing This results in consistent processing regardless of port, offers a single point of contact for customer service, and mitigates compliance risks.
Conducting a compliance assessment is crucial for identifying potential risks within your operations This assessment should align with the focus areas of a Customs and Border Protection (CBP) evaluation Non-compliance with CBP regulations can lead to significant costs and long-term consequences for your supply chain, including the possibility of CBP increasing the frequency of inspections on your shipments.
Joining the Customs-Trade Partnership Against Terrorism (C-TPAT) provides optional entry into the CBP's Importer Self-Assessment (ISA) program, designating your company as a low-risk importer This status significantly reduces customs examinations, enhances the efficiency of paperless entry responses from CBP, and accelerates the delivery of your products to market By participating in the ISA program, your company can proactively identify and rectify errors, minimizing the risk of CBP audits and potential penalties.
Implementing best practices in company's import program helps avoid unnecessary delays, keeps enterprise’s supply chain running smoothly, and increases enterprise’s efficiency in delivering goods to customers.
It is also a great opportunity to ensure that company complies with CBP regulations, and to prepare for future changes in security measures and regulations.
Importing plays a crucial role in economic development, fostering international relations and facilitating the modernization of machinery and technology The Electricity Bicycle Motorbike Joint Stock Company is enhancing its import efficiency for electric vehicle production, focusing on high-end models An analysis of the company's operations from 2019 to 2021 reveals both advantages and challenges in the electric vehicle manufacturing sector This thesis evaluates the company's performance in raw material imports and offers strategic recommendations to enhance operational efficiency in the industry.