Company analysis and valuation of four selected companies in vietnam century synthetic fiber corporation (stk), song hong garment jsc (msh), thanh cong textile garment investment trading jsc (tcm), tng investment and trading jsc (tng)

Dissertation submitted in partial fulfillment of the Requirement for the MSc in Finance FINANCE DISSERTATION ON COMPANY ANALYSIS AND VALUATION OF FOUR SELECTED COMPANIES IN VIETNAM: CENTURY SYNTHETIC FIBER CORPORATION (STK), SONG HONG GARMENT JSC (MSH), THANH CONG TEXTILE GARMENT INVESTMENT TRADING JSC (TCM), TNG INVESTMENT AND TRADING JSC (TNG) DAO THI THUY AN ID No: 21071820 Intake Supervisor: Dr.Roberto Ercole September 2022 Tai ngay!!! Ban co the xoa dong chu nay!!! 17014126038671000000 Dissertation submitted in partial fulfillment of the Requirement for the MSc in Finance FINANCE DISSERTATION ON COMPANY ANALYSIS AND VALUATION OF FOUR SELECTED COMPANIES IN VIETNAM: CENTURY SYNTHETIC FIBER CORPORATION (STK), SONG HONG GARMENT JSC (MSH), THANH CONG TEXTILE GARMENT INVESTMENT TRADING JSC (TCM), TNG INVESTMENT AND TRADING JSC (TNG) DAO THI THUY AN ID No: 21071820 Intake Supervisor: Dr.Roberto Ercole September 2022 DECLARATION I hereby declare that the thesis " Company analysis and valuation of four selected companies in Vietnam: Century Synthetic Fiber Corporation (STK), Song Hong Garment JSC (MSH), Thanh Cong Textile Garment Investment Trading JSC (TCM), TNG Investment and Trading JSC (TNG)" is my research work under the guidance of my supervisor Author Dao Thi Thuy An i ACKNOWLEDGEMENTS After a long period of hard work, my thesis would not have been completed without the assistance of everyone First of all, I would like to express my deepest gratitude to Dr Roberto - the lecturer at the Banking Academy of Vietnam for giving me dedicated guidance for this thesis throughout numerous consultations His enthusiastic instructions and corrections helped me through nearly three months of laboriousness to complete this paper effectively Besides, his understanding and sharing of the difficulties arising have given me positive energy in doing this research In addition, I was grateful to Ms Thao Dang at the Banking Academy of Vietnam who assisted me throughout this course Also, I would like to express my deep gratitude to my beloved family who has always supported and encouraged me during this nerve-wracking time Finally, a big thanks to all my dear friends who have always been by my side, waken me up every time I fall asleep and supported me to the reviews assigned by my "miracle bag" boss I just want to tell you all that we will always be brothers This dissertation might have several shortcomings, I hope that the lecturers and readers will be compassionate and provide helpful feedback ii TABLE OF CONTENTS DECLARATION i ACKNOWLEDGEMENTS ii TABLE OF CONTENTS iii LIST OF ABBREVIATIONS v LIST OF TABLES vi LIST OF FIGURES vii LIST OF APPENDIX viii ABSTRACT ix CHAPTER I INTRODUCTION 1.1 Background of the research 1.2 Objectives and Research questions 1.2.1 Objectives 1.2.2 Research questions 1.3 Organization of the study CHAPTER II RESEARCH METHODOLOGY 2.1 Research design 2.2 Data gathering procedure CHAPTER III MACROECONOMICS ANALYSIS – PEST ANALYSIS 3.1 Political factors 3.2 Economic factors 3.3 Social factors 3.4 Technological factors CHAPTER IV INDUSTRY ANALYSIS 10 4.1 The world textile and garment industry 10 4.1.1 The value chain of textile and garment industry 10 4.1.2 Current situation of global textile and garment industry 16 4.2 Overview about the textile and garment industry in Vietnam 19 4.2.1 The value chain of textile and garment in Vietnam 19 4.2.1.1 Input material 20 4.2.1.2 Vietnamese garment manufacturer 28 4.2.2 Current situation of Vietnam textile and garment industry 31 4.2.3 SWOT analysis of Vietnam textile and garment industry 32 4.2.3.1 Strengths 32 4.2.3.2 Weaknesses 33 4.2.3.3 Opportunities 34 iii 4.2.3.4 Threats 35 CHAPTER V COMPANY ANALYSIS OF STK, MSH, TCM AND TNG 36 5.1 Century Synthetic Fiber Corporation (STK) 36 5.1.1 Company profile 36 5.1.2 SWOT Anlysis 37 5.1.3 Financial overview 39 5.2 Song Hong Garment Joint Stock Company ( MSH) 44 5.2.1 Company profile 44 5.2.2 SWOT analysis 46 5.2.3 Financial overview 48 5.3 Thanh Cong Textile Garment Investment Trading Joint Stock Company (TCM) 51 5.3.1 Company profile 51 5.3.2 SWOT analysis 53 5.3.3 Financial overview 55 5.4 TNG Investment and Trading Joint Stock Company (TNG) 59 5.4.1 Company profile 59 5.4.2 SWOT analysis 60 5.4.3 Financial overview 62 CHAPTER VI VALUATION OF STK, MSH, TCM AND TNG 65 6.1 The valuation of STK 65 6.2 The valuation of MSH 68 6.3 The valuation of TCM 69 6.4 The valuation of TNG 70 CHAPTER VII CONCLUSION 72 REFERENCES 74 APPENDIX 78 iv LIST OF ABBREVIATIONS STK Century Synthetic Fiber Corporation MSH Song Hong Garment Joint Stock Company TCM TNG Thanh Cong Textile Garment Investment Trading Joint Stock Company TNG Investment and Trading Joint Stock Company DCF EVFTA Discounted Cash Flows European-Vietnam Free Trade Agreement VITAS Vietnam Textile & Apparel Association VCOSA Vietnam Cotton and Spinning Association AAFA GSO CMT FOB FTA AJCEP VJEPA CPTTP American Apparel & Footwear Association General Statistics Office of Vietnam Cut-Make-Trim Free On Board Free Trade Area ASEAN-Japan Comprehensive Economic Partnership Vietnam - Japan Economic Partnership Agreement Comprehensive and Progressive Agreement for Trans-Pacific Partnership ASEAN Economic Community Federal Reserve System – Fed Vietnam Energy Conservation and Energy Efficiency Association World Wide Fund for Nature Foreign Direct Investment Global value chains Original Equipment Manufacturer Original brand manufacturing Original design manufacturing International Monetary Fund Gross Domestic Product United States Department of Agriculture Vietnam Cotton and Spinning Association Drawn Textured Yarn Polyester Partially Oriented Yarn Fully Drawn Yarn AEC FED VECEA WWF FDI GVC OEM OBM ODM IMF GDP USDA VCOSA DTY POY FDY v LIST OF TABLES Table Title Page Table 4.1 Upgrading in the global textile and garment value chain 13 Table 4.2 Acreage, production and import of cotton in the period 2017- 21 2021 Table 4.3 Vietnam Spinning Industry Overview 24 Table 4.4 Vietnamese fabric production in the period 2017-2021 26 Table 4.5 Value-added textile and garment exports of Vietnam in 2017- 32 2021 Table 5.1 Operating efficiency of the MSH in 2020 - 2021 50 Table 5.2 Profitability index of the MSH in 2020 - 2021 51 vi LIST OF FIGURES Figure Title Page Figure 4.1 The global textile and garment value chain 11 Figure 4.2 Types of lead firm in the textile and garment GVC 15 Figure 4.3 The value chain of the textiles and garment 16 Figure 4.4 Smiling curve of added value in garment production 16 Figure 4.5 Value chain of Vietnamese textile and garment export in 2021 19 Figure 4.6 Major Cotton suppliers for Vietnam by quantity in 2017-2021 22 Figure 4.7 Major yarn suppliers for Vietnam by quantity in 2017-2021 25 Figure 4.8 Vietnam imports of fabric from global markets in 2017-2021 28 Figure 4.9 Textile and garment companies Vietnam, by categories in 2021 31 Figure 5.1 Business results of the STK in 2021-2022 39 Figure 5.2 Liquidity ratios of the STK in 2020 -2021 40 Figure 5.3 Capital Structure of the STK in 2020 -2021 41 Figure 5.4 Profitability index of the STK in 2020 -2021 42 Figure 5.5 Business results of the MSH in 2019-2022 48 Figure 5.6 Liquidity ratios of the MSH in 2020 -2021 49 Figure 5.7 Capital structure of the MSH in 2020-2021 50 Figure 5.8 Business results of TCM in 2021-2022 55 Figure 5.9 Liquidity ratios of TCM in 2020 -2021 56 Figure 5.10 Capital Structure of TCM in 2020 -2021 57 Figure 5.11 Operating efficiency of TCM in 2020 -2021 58 Figure 5.12 Profitability index of TCM in 2020 -2021 59 Figure 5.13 Business results of TNG in 2021-2022 62 Figure 5.14 Profitability index of TNG in 2020 -2021 63 Figure 6.1 DCF Valuation of STK 65 Figure 6.2 DCF Valuation of MSH 68 Figure 6.3 DCF Valuation of TCM 69 Figure 6.4 DCF Valuation of TNG 71 vii LIST OF APPENDIX APPENDIX Detailed results from the DCF valuation method viii