Internship report advanced international business deo ca traffic infrastructure investment joint stock company (hhv)

NATIONAL ECONOMICS UNIVERSITY ADVANCED EDUCATIONAL PROGRAMS INTERNSHIP REPORT Advanced International Business DEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JOINT STOCK COMPANY (HHV) Student: Le Phuong Linh Major: Advanced International Business Class: Advanced International Business 61B Student ID: 11192835 Supervisor: Dr Nguyen Bich Ngoc Ha Noi, 2022 ACKNOWLEDGEMENTS Without the direction and support of people who participated and given their invaluable aid in the preparation and completion of this study in one way or another, this comprehensive report would not have been possible I want to convey my deep thanks to the National Economics University in particular for including the internship program within my course of study and allowing me to get useful real-world experience I would like to express my gratitude to Dr Nguyen Bich Ngoc, Lecturer at National Economics University, for serving as my internship mentor and providing me with diligent advice I would like to express my sincere thanks to Ms Nguyen Quynh Mai, Deputy General Director of Deo Ca Infrastructure for giving me the opportunity to practice at the Fund Management Department and taking time out of her busy schedule to guide me in getting acquainted with the company department and assigned me to various tasks during my six-week internship I would also like to express my special thanks to all staff for their companionship, guidance and support during my internship TABLE OF CONTENT: LIST OF ABBREVIATIONS LIST OF TABLES LIST OF FIGURES INTRODUCTION 9 Background of the report Objects and objectives of the internship report Research scope 10 Research methods 10 ● Data collection methods 10 ● Data processing method 11 CHAPTER 1: OVERVIEW OF DEO CA TRAFFIC INFRASTRUCTURE INVESTMENT JOINT STOCK COMPANY (DEOCA GROUP) 12 1.1 General information about Deoca Group 12 1.2 Establishment and Development of Deoca Group 12 1.3 Capital scale and Labor force 14 1.4 Organizational structure of Deoca Group 16 1.4.1 General organizational structure: 16 1.4.2 Functions of each department: 17 1.5 Business activities and management 19 1.5.1 Business field 19 1.5.2 Business line 20 CHAPTER 2: DEOCA GROUP'S BUSINESS PERFORMANCE FROM 2019 2022 22 2.1 Business's operation result and financial position: 22 2.1.1 Business performance: 22 2.1.2 Financial ratio 27 2.2 Investment situation in international cooperation projects of the Company 29 2.2.1 Information about investment projects, Capital Structure, Investment Stages, Investment partner 29 2.2.2 Foreign trade activities in the process of cooperation: 35 2.3 General assessment of business activities of Deoca Group: 35 2.4 Analysis on SWOT model: 36 2.4.1 Strengths: 36 2.4.2 Weaknesses: 37 2.4.3 Opportunities: 38 2.4.4 Threats: 38 CHAPTER : FINDINGS, RECOMMENDATIONS AND CONCLUSIONS 40 3.1 Assessments business activities of Deoca Group: 40 3.1.1 Remarkable achievements of the process of cooperation with foreign partners 40 3.1.2 Existing limitations and causes: 40 3.2 Orientation and goals of Deoca Group in the next year: 41 3.3 Recommendations 41 3.4 Conclusions: 42 REFERENCES 43 STATUTORY DECLARATION I hereby certify that I wrote the internship report that was submitted on my own Except for the literature listed in this article and the other sources provided at the conclusion, I don't rely on any outside sources All materials and other sources that I used to produce this academic work, either literally or in terms of substance, have been identified explicitly and individually listed Hanoi, 01/10/ 2022 Le Phuong Linh LIST OF ABBREVIATIONS Co., Ltd: Limited Company Jsc: Joint Stock Company HHV: Deo Ca Traffic Infrastructure Investment Joint Stock Company SBRC: Saigon Bridge and Road Construction Corporation PPP: Public - Private Partnership BOT: Build-Operate-Transfer Document continues below Discover more from: Intership Program Đại học Kinh tế Quốc dân 27 documents Go to course thực tập ngân hàng 73 Intership Program 100% (1) Internship report Intership Program None Linh Chi Internship Report IN 39 29 Intership Program None Kỳ-I-2023-2024-Qui dinh thuc tap Khoa NNKT- Dhktqdsinhvien-final Intership Program None [NHÓM 8]-BÁO CÁO THỰC TẬP 46 Intership Program None Ngo Phuong Dung - chapter - sửa Intership Program None LIST OF TABLES Table 2.1: HHV’s Balance Sheet: Total Assets 23 Table 2.2: HHV’s Balance Sheet: Total Liabilities 24 Table 2.3: HHV’s Balance Sheet: Total Equity 25 Table 2.4: HHV’s Liquidity 27 Table 2.5: HHV’s Profitability Ratios 28 Table 2.6: Deo Ca tunnel, Co Ma tunnel 30 Table 2.7: Cu Mong tunnel 31 Table 2.8: Hai Van tunnel 31 Table 2.9: Bac Giang - Lang Son Expressway 32 Table 2.10:The National roadway expansion 34 Table 2.11 : Trung Luong - My Thuan Expressway 34 LIST OF FIGURES Figure 1.1 Charter capital of HHV since 2015 (Prospectus 2021) 15 Figure 1.2 Capital structure in the Fiscal year 2021 (Prospectus 2021) 15 Figure 1.3 Deo Ca’s Organizational Structure (Prospectus 2021) 17 Figure 2.1 Net revenue and Net profit from 2019 - 2021 25 Figure 2.2 Net revenue and Gross profit from 2020 - Q1 2022 27 INTRODUCTION Background of the report Learning is not only learning through knowledge from books at university, lectures by teachers, but it also needs knowledge and practical experience, especially for students of the business sector The internship program is a great opportunity for students to better understand the business sector and the business market in Vietnam and internationally The internship program is an opportunity for students to both know theoretical knowledge and gain practical experience During the internship, students have the opportunity to adapt to the actual operating environment of the organization So the National Economics University has put in the internship program for senior students of the Advanced International Business Management program After passing the online and face-to-face interviews, I was accepted into Deo Ca Traffic Infrastructure Investment Joint Stock Company to participate in the internship program under the guidance of the instructor - Dr Nguyen Bich Ngoc Based on the knowledge I have learned and the actual situation that I have experienced, I have written this internship report Objects and objectives of the internship report The research object of the internship report is the general operation of Deo Ca Traffic Infrastructure Investment Joint Stock Company and its projects with foreign trade elements The research objectives of the Internship Report are: ● Prepare me with a baggage so that I can equip myself in a real working environment as well as I will be able to know different aspects of the company that builds public and capital projects Foreign investment ● To better understand the internship unit is Deo Ca Group Joint Stock Company How to evaluate a company's situation through financial ratios ● How to manage and evaluate the success of the company in the process of operation and cooperation with foreign partners 29 Indicators for gross margin, operating margin and net margin remain surprisingly low despite favorable historical trends This is inevitable when the company's main products are transportation infrastructure projects, but compared to other companies in the same industry like CIENCO4 Group, this is still a positive figure Return on assets is a metric that assesses a company's ability to generate profits in relation to its assets Despite the positive trend, ROA and ROE are still much lower than competitors in the same economic area and those indicators will decrease in 2020 and 2021 due to the sudden increase in total assets due to the specific characteristics of the market large fixed assets In general, the production and business efforts this year did not achieve the expected results Despite the volatile market, the company's sales revenue is still growing, but the profit target is still modest because high construction costs this year have reduced the company's profit 2.2 Investment situation in international cooperation projects of the Company 2.2.1 Information about investment projects, Capital Structure, Investment Stages, Investment partner ● The construction project of Deo Ca tunnel, Co Ma tunnel and leading roads: Project name The construction project through Deo Ca tunnel Type, level of construction Traffic Construction, Special grade Total investment 11,378 billion VND Construction period 2012 - 2017 Location of performance Phu Yen Province - Khanh Hoa Province Investors Deo Ca Investment Joint Stock Company 30 INVESTORS VALUE Deo Ca Transport Infrastructure Investment JSC 1,486 billion VND Vietnam Joint Stock Commercial Bank for 323 billion VND Industry and Trade Fund Management One Member Co., Ltd Hanoi Construction Corporation - JSC 175 billion VND Vietin Investment Service Trading Co., Ltd 108 billion VND Total contributed capital 2,092 billion VND Table 2.6 : Deo Ca tunnel, Co Ma tunnel The Deo Ca tunnel is a vital national transportation project Beginning on November 18, 2012, the project By the start of September 2017, the project had been finished and delivered four months early, after more than four years of work and numerous obstacles After the tunnel was put into use, the travel time via the tunnel was reduced from 45 minutes while taking the Ca pass to just 10 minutes At the same time, the pass road's accident dark patches and traffic bottlenecks are removed ● Cu Mong tunnel construction project: Project name Cu Mong tunnel construction project Type, level of construction Traffic Construction, Special grade Total investment 4,627 billion VND Construction period 2015 - 2019 31 Location of performance Binh Dinh Province - Phu Yen Province Investors Deo Ca Investment Joint Stock Company Table 2.7 : Cu Mong tunnel The 6,62 km long Cu Mong Tunnel Construction Project links the provinces of Binh Dinh and Phu Yen Building on the project began on September 26, 2015 The project was officially accepted and placed into operation on January 15, 2019, which is 2.5 months ahead of schedule, after more than three years of overcoming obstacles for construction Since then, instead of the 30 minutes it used to take for cars to get over the pass, it now only takes minutes And this helps to save money on materials used in traffic as well as reduce the accident rate when going through difficult areas as before ● Hai Van tunnel expansion project: Project name Hai Van tunnel expansion project Type, level of construction Traffic Construction, Special grade Total investment 7,296 billion VND Construction period 2016 - 2020 Location of performance Thua Thien Hue Province - Da Nang City Investors Deo Ca Investment Joint Stock Company Table 2.8 : Hai Van tunnel The longest road tunnel in Southeast Asia is the Hai Van tunnel The project had begun in 2016 and had been funded in two stages Phase includes improving, repairing, and maintaining the route via Hai Van Pass April 2016 to August 2017 is the building period Implementing the building and enlargement of the 12.6 km long Hai Van tunnel during phase December 2016 to January 2021 is the construction period Since the opening of 32 the Hai Van tunnel, the distance between two provinces can now be traveled in less than 15 minutes as opposed to more than 60 minutes while using the pass route ● Bac Giang - Lang Son Expressway construction investment project: Project name Bac Giang - Lang Son Expressway construction investment project Type, level of construction Traffic Construction, Special grade Total investment 12,188 billion VND Construction period 2017 - 2020 Location of performance Bac Giang Province - Lang Son Province Investors Deo Ca Investment Joint Stock Company INVESTORS VALUE Deo Ca Transport Infrastructure Investment 1,022 billion VND JSC My Da Construction Company Ltd 126 billion VN Licogi 16 JSC 252 billion VND Total contributed capital 1,495 billion VND Table 2.9 : Bac Giang - Lang Son Expressway The construction of the Bac Giang–Lang Son highway was first begun in 2015, however owing to the old investor's failure to get financing, the project was put on hold for over two years By April 2017, Deo Ca had taken over the project and put several strategies 33 into place to deal with issues, increase funds, and coordinate work all at once The Bac Giang-Lang Son highway was finally opened to traffic in December 2019, months early, after years of miraculous restarts Deo Ca not only completed the project earlier than anticipated but also broke a record for speed by building 64.9 km of roadway in just two years With a large investment from domestic investment units, the project was formed with a stable capital source, thereby helping to increase the progress of project completion as well as increase the demand for the labor market at the project site where it takes place ● The National roadway expansion project of sections Km1374 + 525 Km1392 and Km1405 - Km1425 (in Khanh Hoa province): Project name The National roadway expansion project of sections Km1374 + 525 - Km1392 and Km1405 - Km1425 (in Khanh Hoa province) Type, level of construction Traffic Construction, Special grade Total investment 2,644 billion VND Construction period 2013 - 2016 Location of performance Khanh Hoa Province Investors Deo Ca Investment Joint Stock Company INVESTORS VALUE Deo Ca Investment JSC 30.5 billion VND 34 Deo Ca Transport Infrastructure Investment 122 billion VND JSC Vietnam Joint Stock Commercial Bank for 152.5 billion VND Industry and Trade Fund Management One Member Co., Ltd Total contributed capital 305 billion VND Table 2.10 : The National roadway expansion The upgrade and expansion of National Roadway 1A, which is anticipated to be substantially finished in 2015 and entirely completed in 2020, is given priority for investment in the government's transport development strategy through 2020 with a vision until 2030 ● Trung Luong - My Thuan Expressway construction investment project: Project name Trung Luong - My Thuan Expressway construction investment project Type, level of construction Traffic Construction, Special grade Total investment 12,668 billion VND Construction period 2019 - 2021 Location of performance Tien Giang Province Investors Deo Ca Investment Joint Stock Company Table 2.11 : Trung Luong - My Thuan Expressway The project was first launched in 2009, but since the previous investor was inept and the necessary funding could not be promptly secured, it was put on hold for over ten years The project investor consortium encouraged DCG to take part in management and 35 administration in order to eliminate barriers and keep developing the project in March 2019 The Trung Luong - My Thuan Expressway was connected under DCG's control and supervision, following the Prime Minister's instructions (to open before December 31, 2020) The Trung Luong - My Thuan Expressway's completion would reduce the amount of time it takes to get from Ho Chi Minh City to the provinces in the Mekong Delta and alleviate the congestion on National Road 1A 2.2.2 Foreign trade activities in the process of cooperation: Nippon Koei Corporation of Japan and Alpin Technik of Germany are the partners in HHV's Hai Van and Co Ma tunnel construction project as the investor Companies provide, exchange advanced techniques, machines, and engineers from abroad to support, participate in projects, perform tunneling, manage, ensure safety and efficiency results through automatic scanning equipment of the entire tunnel with international standards and many years of experience from foreign engineers Because the Deo Ca tunnel project is a large-scale, technologically complex project, requiring highly qualified human resources, a team of experienced engineers and technicians In addition to the above two large companies, Apave supervision consulting company is a partner of the Deo Ca tunnel project Apave is a subsidiary of APAVE Group - France It is a reputable company that ensures project quality and manages possible risks 2.3 General assessment of business activities of Deoca Group: In the context that the economy of the country and the world in 2020 is greatly affected by the negative impact of the COVID-19 pandemic, Deo Ca Transport Infrastructure Joint Stock Company still maintains stable business activities, income for employees, ensuring that the life of the company's employees will not be disturbed during the period of epidemic prevention and control This is the result of the scientific adjustment and arrangement of working time, both to ensure safety against the epidemic and to ensure the time to perform key tasks at key national transport projects such as: Hai Van road tunnel project, Trung Luong - My 36 Thuan highway and ensure the safety of vehicles, people, management and operation at road tunnel projects through Ca Pass, Cu Mong, Hai Van or Bac Giang - Lang Son expressway is still maintained in continuous and smooth operation, without any stagnation At the end of fiscal year 2019, the consolidated profit of Deo Ca Transport Infrastructure Joint Stock Company after tax reached VND 155.04 billion, equivalent to a ROE of 8.54% The Company's construction and installation, operation management, and toll collection activities in 2020 will remain stable, so the consolidated business results will maintain and grow In 2021, despite the COVID-19 pandemic and social distancing affecting business operations, HHV still impresses with its economic growth At the end of fiscal year 2021, the Company recorded 1,861 billion VND in revenue, up 55% compared to 2020 Revenue structure shows that fee revenue reached 1,265 billion VND, accounting for 68% of total revenue and up 35% compared to last year At the same time, HHV reported a profit after tax of VND 291 billion, an impressive increase of 65%, exceeding the set plan Explaining the business fluctuations in the period, although in 2021 due to the complicated epidemic situation, thanks to the promotion of construction and installation activities for a number of large bidding packages at Cam Lam - Vinh Hao and Trung Luong - My Thuan expressway projects In addition, the management and operation of road works and toll stations continued to be maintained stably, helping to increase business and production results 2.4 Analysis on SWOT model: 2.4.1 Strengths: After investing in road traffic infrastructure projects, the Company's business activities have experienced remarkable growth Revenue structure of operating segments has changed significantly compared to 2019 - before company restructuring, 2020 - affected by the Covid-19 pandemic, in which, revenue from BOT collection activities contributed the largest proportion The company has many years of operation, the company's human resources team is welltrained, well-trained, and regularly rehearsed before incidents, so the management of 37 operation, maintenance of tunnels and Roads are carried out safely, efficiently, and with quality assurance The transit of vehicles and pedestrians through the company's projects is guaranteed to be safe, fast and efficient, best meeting the travel needs of the people At the same time, vehicles and equipment are always maintained and maintained regularly Therefore, this operation is always stable and ensures smooth transportation service In terms of finance, the Company has long-standing relationships with reputable and credit institutions such as VietinBank, TP Bank, Bamboo Capital, Pacific Bridge Investment Fund, etc., so the arrangement of credit capital for production activities Regular business output is guaranteed The work of inspection, supervision and administration of work at the unit is strictly implemented The Board of Directors is experienced, with people returning from studying abroad and having experience in the fields they are in charge of The Board of Directors always closely follows and directs closely in all activities of the Company and always listens to the recommendations of employees, not afraid to change to improve the company's business activities 2.4.2 Weaknesses: Fee collection activities contribute a large proportion in the Company's revenue In the two years of 2019 - 2020, the situation of the Covid epidemic is complicated and unpredictable, the government has taken a number of measures to distance and restrict travel, affecting people's travel needs, leading to negative impacts on the environment directly affect the fee revenue of the Company The Covid epidemic also caused the Company's transit service provision to be suspended times in 2020 with a total interruption time of more than months, leading to a decrease in revenue of this activity segment in 2020 The company's management activities are based on the organizational structure with many shortcomings and through many clues, so there is a bureaucratic situation in the remote facilities of the head office and the recommendations of the employees cannot be directly reached their big boss but also have to take care of many stages which lead to delay in solving internal problems of the company 38 The workers at the construction site are often hired by contract and the shortage and uneven distribution of the workforce on projects have occurred during the time of social distancing 2.4.3 Opportunities: Investment in the development of transport infrastructure in Vietnam is entering a drastic and substantive stage And the Government is acting in that spirit Deo Ca Group both thanks to its capacity and experience in the field of transport infrastructure can have opportunities in the Government's highway project in the period of 2021-2025 With the mechanism of "Connecting to create social value", in addition to the connection between state agencies from the central to local levels, the connection between the state and investors, Deo Ca Group is also very interested in to connect fields of interest related to the project, thereby calling for other investors such as real estate, industrial urban areas, hi-tech agriculture, services, logistics to join in contributing to the project capital for traffic works With the projects that have participated and will participate in the near future, HHV has the opportunity to interact with many big investors and have the opportunity to cooperate with domestic partners as well as have the ability to develop in some countries market in the region 2.4.4 Threats: Financial risk Infrastructure investment requires large capital and depends on the ability to raise capital from different sources, so the Company needs a large additional source of funding to finance the projects it is currently working on plan to buy, invest and develop Availability of capital from external sources and the cost of such financing (budget funding, credit sources ) is highly dependent on external factors, such as: Capital market conditions and business economy in general, interest rates, credit limits of banks Technical risks The company may face risks stemming from unsatisfactory construction techniques leading to unsatisfactory construction quality, not being accepted by the investor or potential factors leading to accidents, other damage 39 Special risks of BOT projects BOT projects often have a long payback period, in which the first years of project implementation and toll collection often record a loss (due to large interest expenses while the initial revenue source of the projects is large sentence is not high) During the project life cycle, changes in policies and laws, changes in regulations, socioeconomic development orientations, force majeure events may affect the revenue of BOT projects 40 CHAPTER : FINDINGS, RECOMMENDATIONS AND CONCLUSIONS 3.1 Assessments business activities of Deoca Group: Business activities from 2019-2021 have markedly prospered despite unfavorable conditions during the Covid-19 period, total assets have increased steadily over the years, and most of them are long-term assets Debt also increased, but mostly long-term debt and not much bad debt Cooperation and business activities in recent years are quite positive and there are many new potential partners both domestic and international HHV's net revenue increased more than 2.5 times in the period of 2019 – 2020 At the end of 2021, the Company recorded 1,861 billion VND in revenue, up 55% compared to 2020 3.1.1 Remarkable achievements of the process of cooperation with foreign partners Projects in cooperation with foreign partners have had many colorful successes in several years Specially, Hai Van tunnel project and Deo ca tunnel , co Mong tunnel project collaborated with many foreigner subsidiary companies like companies from France, Japan, South Korea that made the progress more effective and completed ahead of time Business results of HHV achieved the target, positive Profit exceeded target How to raise capital from the resources of society is a very great strategy Business figures are based on real facts and give real products to society, bringing trust to shareholders 3.1.2 Existing limitations and causes: Some construction projects have not kept up with the set schedule: The phenomenon of price inflation of raw materials in recent years affects the company's raw material supply chain, Cash flow is also affected by the pandemic, Some of the new foreign technic can not come on time because some countries close their border gates HHV's total liabilities is a large number, risks from difficult capital: The stock market turbulence affects the investment process, Inadequate policies and mechanisms 41 It is not possible to be completely active in the process of monitoring and applying new technology to projects Because there are many new machinery and technologies that are imported and applied to achieve multiple targets 3.2 Orientation and goals of Deoca Group in the next year: With a comprehensive ecosystem of investment, general contractor for consultancy, construction and installation, material production, along with a wealth of experience in the field of tunnel and highway management, the parent company is and will prepare implemented projects with a large total investment capital The Board of Directors has set forth a very specific and detailed strategy in the short, medium and long term In the short term, strive to become the leading general construction contractor for traffic infrastructure In the medium term, promote the strength of monopoly in management, exploitation and operation of tunnels and highways, participating in the development of the investment and construction market In the long term, solve problems in difficult projects, participate in investment and development projects of real estate, rest stations, renewable energy, mobilize capital through forms such as capital increase, listed on the stock market, issued bonds, BCC 3.3 Recommendations Company should maintain long-term cooperation with reputable construction material suppliers, should choose suppliers in the vicinity of the construction area of the projects to be able to reduce costs and depreciation during transportation Acquiring advanced technologies and cooperating to be able to self-develop and break through new technologies to help manage and operate projects The company needs to focus on carefully studying technical and construction options; select qualified and capable cadres, and at the same time focus on training and fostering officials and employees; supervise the construction of bidding packages and projects closely to minimize technical risks; consult industry experts to advise the Board of Directors and Technical Committees In addition, the company should send engineers to study abroad or associate with foreign partner companies to be able to grasp the latest technologies and techniques in the world 42 As for internal issues, the company should organize many bonding sessions as well as regularly conduct surveys with members so that the board of directors can quickly grasp the internal shortcomings of the employees from there, the Directors can give the fastest solution 3.4 Conclusions: One of the Deo Ca group's subsidiaries, which serves as the primary entity in charge of the group's key initiatives, is HHV They have worked hard in recent years to establish themselves as the top provider of transportation infrastructure in our nation Each department is succeeding in achieving its objectives In stark contrast to other workplaces, HHV offers a dynamic atmosphere that is gradually revitalizing and is not afraid to learn and adopt the latest social trends In my opinion, this workplace is one in which there is no communication gap between bosses and employees In addition, there is no communication gap between the components To tackle other issues, everyone works extremely well together If they keep the current growth rate, they will capture the majority of the label market in our country 43 REFERENCES (2019) Annual Report 2019 (Audited) HHV Corporation (2020) Annual Report 2020 (Audited) HHV Corporation (2021) Annual Report 2021 (Audited) HHV Corporation