Vietnam dairy products joint stock company, widely known as vinamilk

INTRODUCTION

Vinamilk, officially known as Vietnam Dairy Products Joint Stock Company, is recognized as the largest dairy corporation in Vietnam Established in 1976, it was formed from three existing dairy factories from the previous regime: Thong Nhat Dairy Factory, Truong Tho Dairy Factory, and Dielac.

Powdered Milk Factory In 2003, the company legally changed its name to Vietnam Dairy Products Joint Stock Company.

Vinamilk has consistently been recognized as the leading liquid milk producer in Vietnam, as reported by Neilsen Vietnam (Nguyen, 2021) The company boasts a diverse portfolio of around 250 products, including 50 varieties of liquid milk that cater to the nutritional needs and preferences of its customers Vinamilk's products are available at approximately 500 outlets across all 63 provinces and cities in the country.

Postal address: No 10, Tan Trao Street, Tan Phu Ward, District 7, HCMC Business registration and tax code: 0300588569

Fax: (+84 28) 54 161 226 Email address: vinamilk@vinamilk.com.vn a) Members of BOD

Mdm Le Thi Bang Tam: Chairwoman Independent of the BOD Mdm Mai Kieu Lien: CEO, Executive BOD member

Mrs Dang Thi Thu Ha: BOD member

Mr Le Thanh Liem: BOD member

Mr Michael Chye Hin Fah: BOD member b) The company's independent (external) audit firm

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KPMG has served as the independent auditor for Vinamilk for several years, and the company made its debut on the Ho Chi Minh City Stock Exchange (HOSE) in 2006 under the stock code VNM As reported by Vietstock, Vinamilk had 2,089,955,445 shares listed on its first trading day, January 19, 2006 The company primarily focuses on dairy products and related businesses.

Vinamilk specializes in producing a wide range of food products, including supplemented and common foods Their diverse offerings encompass organic nutrients, yogurt, powdered and liquid milk, infant cereals, soymilk, special nutrition products for adults, beverages like fruit juice and tea, as well as ice cream and cheese.

Based on information gathered from Vietstock (n.d), there are many subsidiaries and associates domestically and internationally up to 31/12/2020; however, the four following companies stand out:

GTNFoods Joint-stock Company: 75% ownershipVietsugar Joint-stock Company: 65% ownershipDriftwood Dairy Holding Corporation: 100% ownershipAngkor Dairy Products CO., LTD: 100% ownership

ANALYSIS OF THE BALANCE SHEET

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Review of current assets (Figure 1), the company's short-term assets of Vinamilk after the end of

2019 will not be much different when only 0.32% increase compared to 2018 However, 2020 seems to have many differences when the figure increased by 5.91% compared to 2019 (up 6.23% compared to

In 2018, the short-term assets of Moc Chau Company experienced a gradual increase, although it was less significant compared to Vinamilk's growth in 2019 Specifically, Moc Chau's assets rose by 0.11% in 2019 and by 3.58% in 2020 relative to 2018 The disparity between the two companies remains minimal, as the changes in cash and cash equivalents, short-term financial investments, accounts receivable, inventories, and other current assets were relatively small.

From 2018 to 2020, Vinamilk's cash and cash equivalents experienced fluctuations, ultimately rising by 0.29% by the end of 2020 compared to 2018 Short-term financial investments saw a slight decline at the end of 2019 but rebounded significantly in 2020, increasing by 12.54% compared to 2018 Additionally, short-term accounts receivable decreased by 1.71% from 2018.

2020 In addition, the company decreased by 4.66% in inventories and 0.22% in other current assets until the end of 2020.

In 2019, Vinamilk reported a lower cash and cash equivalent ratio of 5.97%, compared to Moc Chau's 6.88%, yet Vinamilk demonstrated greater financial stability Both companies experienced an increase in short-term financial investments from 2018 to 2019, with Vinamilk at 12.54% and Moc Chau at 9.03% Notably, Moc Chau's short-term accounts receivable surged to 11.89% in 2020, nearly doubling from 6.44%.

Between 2018 and 2020, Moc Chau experienced a significant decrease in inventory, dropping from 30.83% to 16.72%, outperforming Vinamilk in this regard Additionally, while Moc Chau's other current assets grew by 3.5%, reaching 4.37% in 2020, Vinamilk's growth in this area was less pronounced, increasing only to 0.87% during the same period.

From 2018 to 2020, both Vinamilk and Moc Chau experienced a gradual decline in non-current assets Vinamilk showed a minimal difference of 0.24% between the first two years, but in 2020, the decline became more pronounced, reaching 6.23% compared to 2018 Similarly, Moc Chau's non-current assets decreased by only 0.11% from 2018 to 2019, but by the end of 2020, the decrease was 3.58% compared to 2018, indicating a less significant drop than Vinamilk.

Vinamilk's total non-current assets reveal a concerning trend, with three categories—fixed assets, investment property, and long-term financial investments—showing a decline in value from 2018 to 2020 Additionally, the other long-term asset items exhibit instability, fluctuating throughout the same period.

Between 2018 and 2020, Vinamilk experienced a 7.17% reduction in fixed assets, whereas Moc Chau saw a smaller decline of 5.96% Notably, Moc Chau reported a long-term work in progress rate of 0% in 2019, highlighting a significant difference in asset management strategies between the two companies.

It can be seen that Vinamillk's short-term liabilities increased from 28.47% in 2018 to 32.31% in

In 2019, Vinamilk's market share decreased slightly from 32.10% to 31.95%, while Moc Chau experienced a more significant decline from 29.35% to 20.50% By the end of the last year, Vinamilk's decrease was 8.49%, indicating a less severe drop compared to Moc Chau Additionally, Vinamilk's short-term debt to total debt ratio rose from 95.90% in 2018 to 96.13% by 2020, whereas Moc Chau saw a notable decline of 18.78% in the same period This data suggests that Moc Chau has demonstrated a more effective short-term debt management compared to Vinamilk.

In 2019, Vinamilk experienced a slight decrease in non-current liabilities, dropping by 0.04% compared to 2018, with the ratio remaining stable at 1.18% in 2020 In contrast, rival companies saw a modest increase of 0.09% between 2018 and 2019, but their non-current liabilities surged by 4.73% by the end of 2020 Moc Chau struggled with long-term debt management, ending 2019 with a long-term debt ratio of 19.3% Conversely, Vinamilk demonstrated effective handling of its long-term debt, achieving a reduction of 0.23% from 2018 to 2020.

Vinamilk experienced a decline in total stockholder's equity, dropping from 70.31% to 69.47%, a decrease of 0.84% In 2020, GTNFoods Company, through its subsidiary VILICO, indirectly acquired shares in Moc Chau milk, which led to an increase in Moc Chau's equity level to 74.59%, up from 6.87% in 2018 Despite this, Vinamilk remains the parent company, holding over 75% of shares in GTNFoods.

ANALYSIS OF THE INCOME STATEMENT

Vinamilk - Income Statement For the year ended 31st, December

Revenue from sales of goods and provision of services

Moc Chau Milk - Income Statement For the year ended 31st, December 9

Revenue from sales of goods and provision of services

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Between 2018 and 2020, Vinamilk experienced steady sales growth, despite a 2.3% decline in the average income of Vietnamese people due to the COVID-19 pandemic Notably, the company's revenue remained largely unaffected during this period In 2020, Vinamilk successfully expanded its presence in international markets, exporting to China and Dubai, which further boosted its revenue.

Moc Chau has experienced steady growth in total revenue from sales and services, similar to Vinamilk, but not as robustly In the initial year, Vinamilk's net revenue growth rate was slightly lower than Moc Chau's by 0.02% From 2019 to 2020, despite differing total operating revenue rates, the gap between the two companies remained minimal, at approximately 0.23%.

Vinamilk's cost of sales has consistently remained lower than Moc Chau's, which recorded rates of 53.11%, 52.74%, and 53.53% over recent years In contrast, Vinamilk has maintained a stable cost of sales ratio throughout this period.

TIEU LUAN MOI download : skknchat123@gmail.com moi nhat the difference is not more than 1% On the side of Vinamilk's rival, they have a 0.23% decline from

2018 to 2019 and a drop to 68.47% in 2020.

An analysis of the financial statements for Vinamilk and Moc Chau reveals a continuous increase in total expenses over the past three years, with Vinamilk's peak spending reaching nearly 47,915 billion VND and Moc Chau's at 2,571 billion VND Despite this growth, Vinamilk's total expenses showed minimal fluctuation, decreasing from 79.31% in 2018 to 76.55% in 2019, before rising to 80.24% in 2020 In contrast, Moc Chau experienced a downward trend in total expenses from 2018 to 2020, declining significantly from 93.81% to 90.99%.

Vinamilk experienced a steady rise in general and administrative (G&A) expenses, with increases of 2.15%, 2.48%, and 3.28% in 2018, 2019, and 2020, respectively This trend can be attributed to the company's ongoing business expansion, highlighting the need for effective expense management to ensure that rising costs do not negatively impact profitability.

Vinamilk experienced a notable decline in net other income, dropping from approximately 175.18 billion VND in 2018 to a negative 1.38 billion VND in 2019, and then to 20.84 billion VND in 2020 In contrast, Moc Chau's net other income fluctuated, with a 71% increase in 2019, followed by a decrease to negative 5.63 billion VND in 2020 Despite these differing trends in net other income, both companies saw an increase in net profit before tax by the end of the period, with Vinamilk reporting 13.52 trillion VND and Moc Chau 297.57 billion VND.

Finally, in term of earnings per share, Vinamilk's EPS increased slightly, starting at 5,295VND in

In 2018, the company achieved an impressive earnings per share (EPS) of 5,478 VND, but this figure fell sharply by nearly 13% in 2019 to 4,770 VND In contrast, Moc Chau milk's EPS exhibited a different trajectory, initially declining from 3,019 VND in 2019 before rebounding in 2020.

In 2020, Vinamilk's earnings per share (EPS) rebounded to 3,772 VND, marking a significant 45% year-on-year increase, despite earlier challenges This performance ensured that Vinamilk's EPS remained superior to that of Moc Chau Milk, providing stockholders with better returns.

RATIO ANALYSIS

A liquidity ratio is a key financial metric that evaluates a company's ability to fulfill its short-term financial obligations It specifically assesses whether a company's current or liquid assets are sufficient to cover its current liabilities One common liquidity ratio is the current ratio, which provides insight into the financial health of a business.

Current ratio = Current liabilities (times)

The current ratio is equal between the current assets and current liabilities of the

Vinamilk company Generally, the ratio for all three years is greater than 1.0, which shows that the company has a large number of current assets and can pay short-term debts.

The column chart reveals that Vinamilk's current ratio experienced an overall increase of approximately 0.16 times from 2018 to 2020 Notably, there was a decline of 0.22 times in 2019 compared to 2018, followed by a significant recovery with a 0.38 times increase in the subsequent year By 2020, the current ratio improved to 2.09 times, indicating a positive trend in the company's financial health.

Quick ratio =Current assets − Invetories

The quick ratio is an important metric that evaluates a company's capacity to meet its obligations without relying on product sales or additional funding Vinamilk experienced a decrease in its quick ratio in 2019, followed by an increase in 2020 Specifically, when comparing 2019 to 2018, the quick ratio dropped by 0.04 times, whereas it rose by 0.37 times when comparing 2020 to 2019.

Cash ratio = Cash ∧ cashequivalent (times)

The cash ratio is a key indicator of a firm's liquidity, focusing solely on cash and cash-equivalents while excluding other assets like accounts receivable This makes it a more conservative measure of a company's ability to meet its debts For Vinamilk, while the current and quick ratios exhibited fluctuations, the cash ratio demonstrated a steady increase from 2018 to 2020 Specifically, it rose in 2018-2019 and experienced a slight decline in 2019-2020, moving from 0.04 to a decrease of 0.01.

In the end, Vinamilk's cash ratio lost its position and was surpassed by Moc Chau.

When comparing the financial ratios of Moc Chau and Vinamilk, Moc Chau demonstrates superior performance in both current and quick ratios, with increases of 1.60 and 1.75 times over three years, compared to Vinamilk's modest rises of 0.16 and 0.33 times Although Moc Chau's cash ratio was lower than Vinamilk's in 2018 and 2020, it surpassed Vinamilk by 0.04 times in 2019, highlighting its fluctuating efficiency in cash management.

The efficiency ratio is commonly used to assess how well a corporation manages its assets and liabilities daily.

Total asset turnover i) Inventory turnover

Vinamilk's inventory turnover has shown a positive upward trend over the past three years, reaching 0.91 times in 2019 However, in 2020, the turnover experienced only a modest increase to 0.55 times The relationship between day's sales in inventory and inventory turnover is significant, indicating that fluctuations in inventory levels can impact overall turnover rates.

Over the past three years, Vinamilk has experienced a significant decline in the day's sales in inventory, indicating improved efficiency in selling merchandise In 2018, the average days required to sell inventory was approximately 12 days, but by 2020, this figure dropped to around 6 days This decrease in inventory turnover is a positive indicator for Vinamilk, reflecting the company's enhanced operational performance and effective inventory management.

The receivable turnover had increased from 2018 to 2019, but the ratio dropped in the next year.

In 2019, the ratio rose significantly to 12.51 times, a notable increase from 1.18 times in 2018, but it experienced a decline in 2020, dropping to 1.01 times This trend contrasts with the day's sales in receivables, which inversely correlates with receivable turnover; as the days to collect payments increase, it adversely affects receivables Unlike day’s sales in inventory, longer collection periods have a more detrimental impact on receivables.

The total asset turnover metric evaluates a company's efficiency in generating sales revenue from its assets From 2018 to 2020, Vinamilk experienced a decline in this ratio, with a decrease of 0.15 times from 2018 to 2019 and a further drop of 0.03 times from 2019 to 2020 This trend indicates that Vinamilk struggled to effectively manage its assets to drive sales during this period.

When comparing the financial performance of Moc Chau and Vinamilk, it is evident that Vinamilk has a higher number of days sales in receivables However, Moc Chau outperforms Vinamilk in inventory turnover, receivable turnover, and total asset turnover ratios Over the past three years, Moc Chau's inventory turnover ratio has shown a significant increase compared to Vinamilk Additionally, from 2018 to 2020, Vinamilk demonstrated slower sales of inventories than Moc Chau Notably, Moc Chau also has a lower average number of days to collect receivables than Vinamilk, and its total asset turnover ratio consistently exceeds that of Vinamilk, with an upward trend each year.

The solvency ratio, also known as the leverage ratio, measures a company's long-term financial stability by assessing its ability to meet obligations This important metric compares a firm's debt levels to its equity, assets, and earnings, providing insights into its financial health One key component of this analysis is the total debt ratio, which further evaluates the proportion of a company's debt relative to its total assets.

A debt ratio measures a company's leverage by comparing its total debt to total assets Over the past three years, Moc Chau has maintained a stable debt ratio of 0.32, indicating consistent financial health.

Between 2018 and 2019, both companies maintained stable financial health, with Vinamilk showing an average debt ratio of approximately 0.32 and experiencing minimal fluctuations In 2020, there was a slight decline to 0.25, yet both companies consistently exhibited ratios below one, signifying that their assets exceeded liabilities, enabling them to meet their financial obligations effectively.

The debt-to-equity ratio indicates a company's reliance on debt versus its own funds for operations Vinamilk has an average debt-to-equity ratio of 0.45, while Moc Chau's stands at 0.43, suggesting both companies maintain a similar approach to managing debt This data implies that both Vinamilk and Moc Chau possess the capability to effectively manage their debt levels.

The equity multiplier is a key risk indicator that measures the proportion of a company's assets financed by equity versus debt, calculated by dividing total assets by shareholders' equity Vinamilk's equity multiplier increased from 1.42 in 2018 to 1.5 in 2019, before declining to 1.44 in 2020, reflecting substantial asset growth with only a modest rise in equity In contrast, Moc Chau's equity multiplier has decreased from 1.48 in the first two years to 1.34 in the third year, suggesting a decline in financial leverage as the company increasingly relies on debt to finance its assets.

APPENDIX

Vinamilk Moc Vinamilk Moc Vinamilk Moc

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