Financial planning an policy knt green cup

Trang 1 TON DUC THANG UNIVERSITYFACULTY OF FINANCE AND BANKING Trang 2 1CONTENTSI.COMPANY INTRODUCTION...31.1.History of formation and development...41.2.Business Line...51.3.Introducin

lOMoARcPSD|27827034 TON DUC THANG UNIVERSITY FACULTY OF FINANCE AND BANKING FINANCIAL PLANNING AN POLICY KNT GREEN CUP Lecturers: Đỗ Thị Thanh Nhàn Students: Lê Nguyên Trường Lê Bình Nguyên Trần Duy Khanh Ho Chi Minh City, November 2022 Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 CONTENTS I COMPANY INTRODUCTION .3 1.1 History of formation and development .4 1.2 Business Line 1.3 Introducing projects and products 1.4 Business result in recent years 1.4.1 Balance sheet 1.4.2 Income statement .9 1.5 II APPRAISAL OF INVESTMENT PROJECTS 14 2.1 Project simulation, project introduction 14 2.2 Project Appraisal 15 2.2.1 Project Information 15 2.2.2 Building the income statement 18 2.2.3 Building cash flow 20 2.2.4 Calculate the cost of capital of the project (WACC) 21 2.2.5 Project appraisal by NPV, IRR 22 III PROJECT RISK ANALYSIS .22 3.1 Types of Risks of the Project 22 3.2 Scenario analysis 23 3.3 Sensitivity analysis 24 IV V SWOT Analysis .13 CONCLUSION 25 REFERENCES 25 GROUP WORK: 25 Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 I COMPANY INTRODUCTION An Phat Bioplastics Joint Stock Company (An Phat Bioplastics) is Southeast Asia’s No enterprise in the field of manufacturing and exporting high quality thin monolayer film An Phat Bioplastics is currently a public company, listed on HoSE stock exchange (Ho Chi Minh Stock Exchange) with AAA as ticker The company was founded in September 2002, is a key member and the pioneer of An Phat Holdings With nearly 20 years of experience, An Phat Bioplastics has been attracting a large number of domestic and international customers, establishing strategic business relationships with customers in more than 50 countries around the world Along with the development of the traditional business of thin monolayer film, in recent years, An Phat Bioplastics has shifted its strategic goals to diversified its products and focusing on developing AnBio compostable compound and AnEco compostable products, such as bags, knives, spoons, forks, straws, gloves…, meeting the green consumption trend in Vietnam and over the world Currently, An Phat Bioplastics' products are much more diversified, as the companyexpands its research, development and production line of fully biodegradable and environmentally friendly products Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 I.1 History of formation and development September 2002 Anh Hai Duy Company Limited (the precursor of An Phat Bioplastics) was established April 2004 Anh Hai Duy started to expand his business and put the first thin monolayer film factory into operation, in Nam Sach Industrial Park, Hai Duong Province June 2005 The company started to build a second factory with an area of 19,967 m2 in An Dong Industrial Cluster, Nam Sach District, Hai Duong Province March 2007 Anh Hai Duy Company Limited changed its name to AnPhat Plastic and Packing Joint Stock Company September 2009 The company built another factory No 3, with an area of 20,064 m2 November 2009 The company changed its name to An Phat Plastic and Green Environment Joint Stock Company This event marked a dramatic change in a new stage of development, pursuing the goal of “Green production, sustainability, environmental protection” July 2010 An Phat Plastic and Green Environment Joint Stock Company was officially listed on Hanoi Stock Exchange with a ticker of AAA April 2019 An Phat Plastic and Green Environment Joint Stock Company changed its name to An Phat Bioplastics Joint Stock Company The company will further expand its investment in developing compostable and environmentally friendly products and materials, as well as owning the leading technology and inventions in this product line Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 I.2 Business Line - Producing plastic products (PP, PE); - Printing and printing services for advertising on packages; - Construction of other civil engineering works; - Agent for buying, selling and consigning goods; - Non-hazardous waste collection; - Treat and destroy non-hazardous waste; - Pollution treatment and other waste management activities; - Producing machinery and equipment for the plastic industry; - Purchase and sale of garments; - Buying and selling machinery, equipment and spare parts, transferring plastic industry technology; - Installation of other building systems; - Buying and selling plastic materials, raw materials, plastic bags of all kinds; - Commercial trust I.3 Introducing projects and products AnEco 100% compostable products of An Phat Bioplastics are environmentally friendly, meeting international standards Furthermore, agricultural film products, fishing nets from 100% compostable materials have also been researched and successfully produced, bringing green solutions to the agriculture and fishery sector The company now has a strong position in business operations, establishing good business relationships with more than 50 countries Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 I.4 Business result in recent years Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 I.4.1 Balance sheet Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 2019 2020 Difference Dens Value ity Dens Value Absolute Propo Value rtion ity 4,496,050, 52.47 5,354,610, 53.50 858,559,68 858,559,68 19.10 828,524 % 509,760 % 1,236 1,236 % 963,717,12 11.25 1,988,170, 19.86 1,024,453, 1,024,453, 106.30 equivalents 2,052 % 740,182 % 618,130 - 618,130 % Short-term 758,600,00 8.85 436,156,00 4.36 322,444,00 322,444,00 42.51 0,000 % 0,000 % 0,000 0,000 % Short-term 1,669,170, 19.48 1,795,468, 17.94 126,298,23 126,298,23 receivables 204,812 % 441,466 % 6,654 6,654 946,809,37 11.05 997,384,83 9.96 50,575,455 50,575,455 9,604 % 5,429 % ,825 - ,825 5.34% 157,754,12 1.84 137,430,49 1.37 20,323,629 20,323,629 12.88 2,056 % 2,683 % ,373 ,373 % 4,073,363, 47.53 4,654,916, 46.50 581,552,55 581,552,55 14.28 572,384 % 125,531 % 3,147 3,147 % A Current assets Cash and Cash financial assets Inventory Other current assets B Non-current assets Fixed assets 173,910,56 278,966,43 4,469 3,205 7.57% Investment real estate Long-term unfinished assets Long-term 2,325,026, 27.13 2,100,839, 20.99 224,187,00 224,187,00 613,214 % 611,952 % 1,262 1,262 9.64% 447,748,68 526,347,47 4,374 - 0,213 - - - - 488,178,29 5.70 569,909,27 5.69 81,730,977 81,730,977 16.74 2,178 % 0,071 % ,893 ,893 % 277,269,22 3.24 325,676,97 3.25 48,407,753 48,407,753 17.46 1,328 % 5,272 % ,944 ,944 % 316,772,33 100.0 393,763,84 100.0 76,991,511 76,991,511 24.30 6,973 0% 8,739 0% ,766 ,766 % 92,697,838 29.26 119,052,50 30.23 26,354,664 26,354,664 28.43 ,724 % 3,255 % ,531 ,531 % 92,697,838 29.26 119,052,50 30.23 26,354,664 26,354,664 28.43 Short-term debt ,724 % 3,255 % ,531 ,531 % Long-term debt - - - - - - - Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) 224,074,49 70.74 274,711,34 69.77 50,636,847 50,636,847 22.60 financial investment Other long-term assets TOTAL ASSETS C Liabilities lOMoARcPSD|27827034 In the Balance Sheet,Current Assets category saw a slight growth of 858,559,681,236 VND from 4,496,050,828,524 to 5,354,610,509,760 equivalent to 19% The explanation for the increasing index of Current Assets is portfolio Cash and cash equivalents in 2021 increased sharply by 106% compared to 2020 The proportion of 20% increase in Current assets In the year 2021 listReceivables decreased slightly by 7% compared to 2020 equivalent to 126,298,236,654 VND, although this decrease was not significant, but this portfolio used up 17% of the proportion of short-term assets 2,500,000,000,000 2,000,000,000,000 1,500,000,000,000 1,000,000,000,000 500,000,000,000 Portfolio Long-Term Assets increased slightly by 14% following the momentum, equivalent to 581,552,553,147 VND The explanation for the above change is because Fixed Assets increased by 9.64% and long-term unfinished assets increased by 136% YoY Those two portfolios are the two major weighted portfolios in Long term Assets In summary, Total Assets in 2021 will increase by 16.84% compared to 2020 or VND 1,440,112,234,383 according to the natural growth momentum TOTAL ASSETS 46.50% A Current assets 53.50% B Long-Term Assets Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 2020 4,545,451,942,40 Liabilities 4,023,962,458,50 Capital 2021 4,555,144,898,241 Proportion 0.21% 5,454,381,737,050 35.55% 8,569,414,400,90 10,009,526,635,29 TOTAL CAPITAL 16.81% In the portfolio of Liabilities and Capital 2021 and 2020 there is no significant change, which proves the safety in short-term and long-term debt Equity has increased by 35.5% in 2021, equivalent to VND 1,430,419,278,549 shows that the business is doing effectively, the business activities are profitable The addition of capital contribution and increase of owner's equity helps enterprises to expand their scale which means that it is still safe for shareholders I.4.2 Income statement 2020 2021 Difference Value Value from selling 7,438,249,657, 13,154,009,92 5,715,760,270, goods and 913 8,330 417 Proportion Revenue 76.84% services Revenue deductions -9,692,642,869 10,900,064,32 -1,207,421,460 12.46% Net revenue from selling 7,428,557,015, 13,143,109,86 5,714,552,848, goods and 044 4,001 957 services Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) 76.93% lOMoARcPSD|27827034 profit/(loss) 15 Total accounting 318,748,516,5 397,868,051,9 79,119,535,45 profit before 46 96 - - - 35,806,612,91 97,803,195,96 61,996,583,05 7 24.82% tax 16 Current CIT expenses 16 Business 24,078,168,39 income tax - 230,907,050 deferred 17 Business - - - income tax 35,575,705,86 73,725,027,57 38,149,321,71 expenses 18 Profit 7 after 283,172,810,6 324,143,024,4 corporate 79 19 20,931,991,94 33,902,012,12 12,970,020,18 2 after tax of 262,240,818,7 290,241,012,2 28,000,193,56 parent 37 97 1,310.00 994 -316 -24.12% - - - - income tax 18.1 Benefits of Minority Shareholders 18.2 Profit - 173.14% - - 107.23% - 61.96% 10.68% company 19 Basic earnings per share 21 Dividend In 2021, the enterprise recorded a net revenue of 13,154,009,928,330 VND, an impressive figure signaling an outstanding business year Recorded an increase of 76% Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 over the same period last year, equivalent to VND 5,715,760,270,417 Profit after tax of parent company recorded an increase of 10.68% over the previous year, equivalent to VND 28,000,193,560 The numbers show that company has achieved the set plan in business compared to 2020 and recovered strongly after the Covid-19 epidemic The company's main business in 2021 is buying and selling machinery, equipment, supplies, and production materials packaging plastic products Gross profit from sales and service provision increased significantly by 67.5% compared to 2020 equivalent to VND 524,440,162,098 2021 was a successful business year with outstandingly increasing indicators and indicators Those impressive numbers come from improving profits, between exporting packaging and implementing a selling price policy towards foreign customers Benefits of Minority Shareholders still maintained a strong growth rate of 61% over the same period last year, creating more trust and benefits compared to investors, reflecting the company's main principles or benefits In summary, all indexes have increased significantly, the company's plans are all good signals for the company to expand its business But the company should come up with new plans to sustain growth in the coming years and optimize costs I.5 SWOT Analysis Strengths Weakness Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 Experience and reputation in the Limited experience in the domestic market industry: An Phat has 16 years of Impaired solvency may make it difficult experience in exporting around the for businesses to access bank capital world with products that meet the The risk management and control system standards of the most demanding is under construction and completion markets such as Japan, Europe, Network of customers and partners An Phat's loyal cooperation is widely developed from nearly 100 countries and regions around the world The company has a convenient location in the middle of the economic triangle: Hanoi - Hai Phong - Quang Ninh Leading production scale in the region: An Phat owns a system of 07 thin film packaging factories with a total designed capacity of 96,000 tons/year, the largest in Southeast Asia Oppoturnities Threaten Green consumption trend is spreading Competitive business environment: The strongly: Green consumption is now plastic packaging industry is under a lot of considered the consumption trend of competitive pressure, especially in price the century when the environment among manufacturers becomes a major concern of many Material price fluctuations: Unpredictable countries around the world State oil price movements pose challenges It is policies prioritize the development of not a small way for businesses to maintain the plastic industry, especially a stable profit margin recycling waste plastic Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 II APPRAISAL OF INVESTMENT PROJECTS 2.1 Project simulation, project introduction Nowadays, everyone is concerned about convenience and product quality, along with the growing trend of environmental protection, consumers tend to buy products that are high-quality cups durable and materials that are easily renewable and biodegradable It is for that reason that manufacturers offer products that are good for the environment and meet the needs of customers Plastic cups are such a product, but because they are made from ordinary plastic, the decomposition rate is often very long 'KNT Green Cup'' is a plastic cup product that An Phat Bioplastics., JSC is expected to launch a new product this is a product that focuses on protecting the environment and raising the bar for plastic cups, made from coffee grounds and reusable materials The ingredients used are Coffee Bio – Composite, the main raw material for the production of most products made from coffee grounds Using injection molding technology application to create products  First, the raw material is Coffee Bio-Composite plastic beads will be put into the material hopper, then at an appropriate temperature, these plastic particles will automatically melt  After the plastic granules are melted, the material will be injected into the mold in closed form with great pressure  Before that, the finished mold will be cooled and in contact with the molten material After the force is exposed to two different temperatures, the finished product will gradually turn to a solid  Finally open the mold to get the finished product “KNT Green Cup” is An Phat Bioplastics., JSC with the purpose of bringing quality and unique products to serve the needs of users, but still keeping the "Green" color of the earth “KNT Green Cup” is made entirely from 100% coffee bio-plastic, which contains more than 60% natural coffee grounds Therefore, coffee bio-plastic cups have optimal biodegradability, specifically, after the product is burned or buried, under the influence of bacteria, they will decompose into CO2, H20, CH4 and biomass have Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 the ability to help plant growth and development, not degrade microplastics, and are environmentally friendly Possessing parts including the body and the removable lid, users can drink directly through the opening right on the lid, or can use a straw or remove the lid to drink like other glasses With a capacity of 340ml, suitable for storing all the most delicious drinks and convenient to take anywhere In addition, the outstanding bio-plastic coffee cup also has good heat retention ability to help your drink keep its taste for a longer time, comfortable to use both in the microwave or in the dishwasher With the application of a unique engraved design on the side of the cup, along with a power-operated handle, it feels comfortable to use 2.2 Project Appraisal 2.2.1.Project Information 2.2.1.1.Internal factors Finance In other to finance the business, the requirement of initial capital is about 1,731,265,000VND to serve for buying the production line and leasing warehouse Therefore, with a particular project that we planned, our company decide to make a business loan from Vietnam International Bank (VIB) with an interest rate of 8.2% for the “Cup to go” project The production lines The production line of the manufacture of a cup is supervised by a high -quality guarantee Moreover, our company almost uses the machine we have in the factory and laboratory Therefore, we only need to invest in some necessary equipment in production, such as “Extrusion machine”, “Automatic Horizontal Carton Boxing Machine” and a truck Warehouse company built a warehouse to produce in Dong Nai province with an area of 1000 square meters 2.2.1.2.External factors The climate change is increasingly serious, the environmental protection by limiting the use of conventional plastic items is applied by the world With a day when Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 a lot of coffee grounds were released outside the environment, there was an invention made from coffee beans and other plastic materials It is coffee grain The company saw that potential from the needs of everyone as well as the environmental protection trend We decided to produce cups made from coffee plastic seeds 2.2.1.3.Revenue Forecast Currently, we estimate that one box of 300 cups priced at 3,000,000VND and will keep this price for the whole years of this project According to the average growth of sales from 2017 to 2021 of An Phat Bioplastics., JSC, we calculated in sheet “NPV” that it took 35.66%, so we will estimate unit sales will grow 35.66% each year in years In the end, the expected revenues for the total years are about 66,536,842,722VN XProduct Box cups Selling price per unit 3.0 00.000 Total Revenue Unit to be sold per year Unit: VNĐ 2.200 2.985 4.049 5.493 7.451 6.600.00 0.000 8.953.56 0.000 12.146.39 9.496 16.477.80 5.556 22.353.79 1.018 Table The expected Revenue Of The Project 2.2.1.4.Forecast costs In this project, we estimate fixed cost and variable costs as follows: In terms of fixed costs, we evaluate initial year we will spend 798,000,000VND for direct employees, delivery labor and packing labor We spend 444,000,000VND for office staff and management department Final we spend 1,152,000,000VND for sales staff, shipping cost, advertising costs and costs of promotion, product introduction and customer support Others expenses is 240,000,000VND Then after each year, the fixed cost will change follows the table of sheet “FC &VC” Unit: VNĐ Quantity Expense Unit Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) Total Expense lOMoARcPSD|27827034 Direct Expense - Cost of product quality assessment - Direct labors 30.500.000 - Delivery labors - Packing labors Enterprise Cost Management 10.000.000 month 7.500.000 person 7.000.000 person 6.000.000 person 21.000.000 - Office staff salary - Management department salary 8.000.000 person 13.000.000 person Selling expense 84.000.000 - Sales staff - Shipping cost - Advertising costs 4.000.000 person 10.000.000 month 30.000.000 month - Costs of promotion, product introduction and customer support 40.000.000 month Others expense 20.000.000 month TOTAL 798.0 00.000 120 000.000 450 000.000 84 000.000 144 000.000 444.0 00.000 288 000.000 156 000.000 1.152.0 00.000 192 000.000 120 000.000 360 000.000 480 000.000 240.0 00.000 2.634.000.000 Table Fixed Cost Term of variable costs, we spend 1,325,000,000VND in direct material costs, and we spend 35,000,000VND in carton box and 260,000VND in tape each year Total variable cost is 1,360,000,000VND and is expected to increase follow average growth rate in sheets “FC & VC” and “NPV” XMaterials Items Unit RESOURCES Plastic coffee beans BioComposite Number Price Amount tons 1.325.000 000 1.325.000.00 1.325.000.00 35.260.000 pc 1.000 35.000 35.000.000 PACKAGING PRODUCTS Carton box Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 pc Tape 10 260.000 26.000 1.360.260.00 TOTAL Table Variable Cost XYear Fixed cost 2.634.000.0 00 2.672.340.0 00 2.792.691.90 2.923.968.47 3.067.554.61 Variable cost 1.360.260.0 00 1.845.278.1 74 2.503.235.80 3.395.796.68 4.606.611.61 COGS in per year 3.994.260.0 00 4.517.618.1 74 5.295.927.70 6.319.765.16 7.674.166.23 Total Revenue 6.600.000.0 00 8.953.560.0 00 12.146.399.4 96 16.477.805.5 56 22.353.791.0 18 Table The Expected Cost Of The Project 2.2.2.Building the income statement Before getting to know about earnings before interest and tax, we summarize the data from Table and Table 2, especially add the depreciation expense Capital expenditure in the project is equipment and leasing warehouse We will use production line for manufacturing from ordering on website Alibaba with the total costs is 1,174,265,000VND So we spend 1,731,265,000 in capital expenditure and the depreciation in each year is 228,826,500VND (mentioned in sheet “DEP”) The interest expense from each year is mentioned in sheet “Loan amount” before evaluating the earning before tax Tax rate in this project is 20% according to Clause Article 13 Consolidation document 04/VBHN – VPQH Law on Corporate Income Tax At the end of years, “KNT Green Cup” project has high net income which is up to 12,114,942,438VND Year Revenues 6.600.000.000 8.953.314.772 12.145.734.15 16.476.451.66 22.351.342.13 Quantity 2.200 2.984 4.049 5.492 7.450 Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 COGS 2.999.827.942 4.069.455.125 5.520.471.619 7.488.866.681 10.159.118.28 Dep 174.126.500 174.126.500 174.126.500 174.126.500 174.126.500 VC 1.360.260.000 1.360.260.000 1.360.260.000 1.360.260.000 1.360.260.000 FC 2.634.000.000 2.634.000.000 2.634.000.000 2.634.000.000 2.634.000.000 EBIT (568.214.442) 715.473.146 2.456.876.032 4.819.198.484 8.023.837.349 Interest 50.464.600 40.371.680 30.278.760 20.185.840 10.092.920 EBT (618.679.042) 675.101.466 2.426.597.272 4.799.012.644 8.013.744.429 Taxes 113.642.888 (135.020.293) (485.319.454) (959.802.529) (1.602.748.88 6) EAT (618.679.042) 540.081.173 1.941.277.818 3.839.210.115 6.410.995.543 Table 5: The Expected Income Statement Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 2.2.3.Building cash flow Year Taxes 6.600.000 000 2.200 2.999.827 942 174.126.50 1.360.260 000 2.634.000 000 (568.214.4 42) 50.464.600 (618.679.0 42) 113.642.88 8.953.314 772 2.984 4.069.455 125 174.126.50 1.360.260 000 2.634.000 000 715.473.14 40.371.680 675.101.46 (135.020.2 93) 12.145.734 152 4.049 5.520.471 619 174.126.50 1.360.260 000 2.634.000 000 2.456.876 032 30.278.760 2.426.597 272 (485.319.4 54) 16.476.451 665 5.492 7.488.866 681 174.126.50 1.360.260 000 2.634.000 000 4.819.198 484 20.185.840 4.799.012 644 (959.802.5 29) 22.351.342 133 7.450 10.159.118 285 174.126.50 1.360.260 000 2.634.000 000 8.023.837 349 10.092.920 8.013.744 429 (1.602.748 886) NOPAT = EBT - T (618.679.0 42) 540.081.17 1.941.277 818 3.839.210 115 6.410.995 543 Plus: Dep 174.126.50 174.126.50 174.126.50 174.126.50 174.126.50 Revenues Quantity COGS Dep VC FC EBIT Interest EBT Less: Capex Plus: Salvage value (1.731.265 000) (10.977.45 7.980) (3.914.561 516) (5.310.494 152) (7.204.216 367) (9.773.239 923) 38.324.102 438 NWC (10.977.45 7.980) (3.914.561 516) (5.310.494 152) (7.204.216 367) (9.773.239 923) (12.708.72 2.980) (4.359.114 058) (4.596.286 479) (5.088.812 049) (5.759.903 308) 37.179.969 938 1.144.132 500 44.909.224 481 PPE FCF Table 6:The free cash flow of the project Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 Free cash flow is the profit of the company after paying tax, deducting capital expenditures, changing in net working capital, and adding all non-cash expenses such as depreciation expenses, salvage value of the company In table 5, the cash flow of the initial year is about (12,708,722,980VND), which means that, in the project of making a cup, we have to invest 12,708,722,980VND in operating the process and covering all the expenses In the years later, the cash flow of the project turns to be positive due to the fact that the depreciation costs, which is a non-cash expense, is added into the cash flow and a decrease in delta of networking capital of the project Moreover, in the last year, the free cash flow that plus a salvage value of net working capital, accounted for around 44,910,293,136VND 2.2.4.Calculate the cost of capital of the project (WACC) WACC 7.91% 36% Weight of Debt 64% Weight of Equity 0.45 Beta of project 8.2% Cost of Debt 8.65% Cost of Equity Table 7: Cost of capital (WACC) In term of calculating the cost of capital for the project, it is presented all the sources and methods in sheet “WACC” of excel file To explain more specifically, the beta of the project is collected from website investing.com which represents all the information and index of An Phat Bioplastic., JSC Besides that, the cost of equity is calculated by the following formula Cost of equity = Risk-free rate of return + Beta * Equity risk Premium Moreover, we also estimated the weight of debt and equity-based on the financial statement of An Phat Bioplastic., JSC in 2021, and the cost of debt is 8.2% which is based on the interest rate business loans in 2021 of Vietnam International Bank (VIB) Finally, the cost of capital of the project is about 7.91%, and it is a good signal of profitability because the lower the cost of capital is greater NPV is 2.2.5.Project appraisal by NPV, IRR NPV 1.700.408.282,78 Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 IRR 9,6% Table 8: Net present value (NPV) and Interest rate of return (IRR) The Net present value and Internal rate of return is computed in the NPV sheet of the excel file The net present value (NPV) is measurement of whether the cash flow into the project is worth or not in comparison between the money today and in the future In addition, if the NPV of the project is positive, it means that the project is worthy investment, otherwise the investor should reject this project because it can cause a loss According to the definition of NPV, the project of “Cup to go” has positive NPV which is, so this project can bring a profit to the investor of nearly 1,701,897,387.15VND in the future On the other hand, the Internal rate of return (IRR) is used to estimate the profitability of the investment, and the higher the internal rate of return is, the worthier the project is Therefore, in our project, the IRR is approximately 9.6% and higher WACC so it can be a good deal in business to invest III PROJECT RISK ANALYSIS 3.1 Types of Risks of the Project In every project, there will be some disadvantages and risks beside the advantages and profits which make us step by step development to higher levels This “KNT Green Cup” project will face with these risks which we estimate it will happen: • Difficult to access the market: This is a project with a completely new product Because it is a new product, it will be difficult to access the market as well as consumers On the other hand, this is a product from a new source of raw materials different from previous products, so the price of the product will be higher than the price of other similar products • Customers are limited: This product line can be called a mid-range and highend product line, so the customer will be limited unlike other conventional plastic products Mainly focusing on reputable and large -scale cafes with the desire to contribute to the protection of the living environment Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 • Easy to be copied: Although this is a new product, but with a fairly simple production process, this product can appear in a series on the market after our company starts to produce and sell in mass 3.2 Scenario analysis TABLE Sales SCENARIO ANALYSIS 1.700.408.28 1.800 2.000 2.200 2.500 2.700 70,00% (10.883.565 914) (9.739.667.6 62) (8.595.769.4 10) (6.879.922.0 32) (5.736.023.7 80) 63,00% (8.481.379.5 85) (7.070.571.7 41) (5.659.763.8 97) (3.543.552.1 31) (2.132.744.2 86) 45,45% (2.458.755.2 88) (378.766.96 7) 1.701.221.35 4.821.203.83 6.901.192.15 40,00% (588.481.64 6) 1.699.314.85 3.987.111.36 7.418.806.11 9.706.602.62 38,00% 97.857.305 2.461.913.69 4.825.970.08 8.372.054.66 10.736.111.0 48 COGS Table 9: Two Variables Analysis between Sales and COGS The table above represents two variables analysis which is the expected sales and the budgeted cost of goods sold of the project “KNT Green Cup” In addition, if the cost of goods sold is about 70% of revenues, the project will not have a profit However, our project estimates that the cost of goods sold is 45.45% of revenues, so we can decrease cost of goods sold from 45.45% to 40% We think that this is a good cost of goods sold that can bring a profit for our company when we maintain the ability for sales is above 2,200 units per year To summarize: If the project has Sales below 1,800 units per year and Cost of goods sold above 40% of revenues, the NPV is negative so we can conclude that this is not a good project to invest in Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 If the project has sales above 2,200 units per year and Cost of goods sold below 45.45% of revenues, the NPV is positive so the project is worth investing in because it can bring a profit to investors 3.3 Sensitivity analysis For sensitivity analysis, the project is tested by using kinds of parameter, assumption, there are Best case, Worst case, and Based case In terms of revenues, the project should maintain total revenues about 5,954,520,000VND to get a positive sign for the net present value (NPV), which is nearly 6,270,000,000VND respectively Moreover, to implement the increase in sales, we should use marketing, advertising to introduce our product and the benefit of using “Cup to go” to customers Besides that, the most important thing is we have to control the cost of goods sold and try to use many methods to corporate with other companies to reduce the costs of producing our product by integrating and outsourcing The reason for this is the lower costs are, the higher profit is and it also makes the internal rate of return higher than before TABLE SENSITIVTY ANALYSIS Current Value Worst Base Best Sales 6.600.000.000 5.954.520.000 6.270.000.000 7.590.000.000 NPV 1.700.408.283 1.374.116.870 1.223.615.790 1.652.543.868 (1.731.265.000) (1.869.766.200) (1.765.890.300) (1.644.701.750) 1.700.408.283 1.561.907.083 1.524.511.759 1.619.869.835 COGS 45,45% 65,00% 46,00% 40,00% NPV 1.700.408.283 (6.498.622.615) 1.470.535.207 3.987.111.362 Cost of Capital 7,91% 15,00% 10,00% 6,30% NPV 1.700.408.283 (4.286.108.182) (342.433.999) 3.463.103.176 Investment capital NPV Table 10: Best, Worst and Base case IV CONCLUSION The "KNT Green Cup" project has been researched, learned and developed by us to create a product from plastic waste with a faster decomposition rate than other plastic products This is a product that can be called the environmental protection from Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com) lOMoARcPSD|27827034 plastic waste that is difficult to decompose or the decomposition speed is too long And the ultimate goal is to minimize human coffee waste created daily This is a very potential product not only in the Vietnamese market but also very potential in the foreign market With the current trend, everyone wants to contribute to environmental protection However, other environmental protection products are very high, while this is a product that also contributes to environmental protection but the price is more suitable for businesses Through the above analysis, we can see that producing “KNT Green Cup” will bring profits to the company, reasonable cost and high efficiency to this business model V REFERENCES https://anphatbioplastics.com/ https://anphatholdings.com/ https://cafef.vn/ https://finance.vietstock.vn/ https://www.tvsi.com.vn/ GROUP WORK: Member Student ID Percentage of participation Lê Nguyên Trường B19H0340 100% Lê Bình Nguyên B19H0259 100% Trần Duy Khánh B19H0215 100% Downloaded by Do Thuy Trang (tailieuvcu123@gmail.com)