team project of x10 topic hoa phat group

Contents: -Basic information -Development orientation-Chapter 1: Overview of Hoa Phat Group 1.1: Foundation and Development of Hoa Phat Group 1.2: Structure of Hoa Phat Group 1.3: Produ

TRƯỜNG ĐẠI HỌC DUY TÂN

VIỆN ĐÀO TẠO QUỐC TẾ

TEAM PROJECT OF X10 CLASS: PSU FIN302 DIS TEACHER: LƯU THỊ THU HƯƠNG

TOPIC: HOA PHAT GROUP

MEMBERS: PHẠM THỊ KIỀU THÚY (LEADER) TRƯƠNG THỊ TRANG

Contents:

-Basic information

-Development orientation

-Chapter 1: Overview of Hoa Phat Group

1.1: Foundation and Development of Hoa Phat Group

1.2: Structure of Hoa Phat Group

1.3: Products and Services

2.4: Assets management ratio

2.5: Debt management ratio

2.6: Profitability ratio

2.7: Market value

-Chapter 3: Current & Optimal capital structure

-Chapter 4: Credit policy

4.1: Loans receivable - long-term

4.2: Accounts receivable from customers short - term, loans receivable and other short - term and long - term receivables

BASIC INFORMATION

-Transaction name: Hoa Phat Group Joint Stock Company

-Business Registration Certificate No.: 0900189284

-Stock exchange: HOSE

-Initial offering date: 15/11/2007

-Key staff: Trình Đình Long (chairman of the board)

- Position: Hoa Phat – Vietnamese brand, global standard

- Core Values: The core value of Hoa Phat Group is the philosophy of Harmony forJoint Development This is reflected in the relationship among the employees, between the Group and its partners, agents, shareholders and the social community,ensuring the harmony of interests of stakeholders on the same boat, towards sustainable development Especially, Hoa Phat Group has built a long-term, sustainable and trusting partnership with the sales agents who have been with the Group since the beginning of its establishment

Chapter 1: OVERVIEW OF HOA PHAT GROUP

1.1: Foundation and Development of Hoa Phat Group:

Hoa Phat is a leading industrial manufacturer in Vietnam

-8/1992: Establishing Hoa Phat Equipment Accessories Co., Ltd, (now Hoa Phat Metal Producing Co., Ltd) - the first company that bore brand of Hoa Phat-11/1995: Establishing Hoa Phat Furniture JSC

-8/1996: Establishing Hoa Phat Steel Pipe Co., Ltd

-2000: Establishing Hoa Phat Steel JSC, now Hoa Phat Hung Yen Steel Co., Ltd -7/2001: Hoa Phat Refrigeration Engineering Co., Ltd

-9/2001: Hoa Phat Urban Development and Construction JSC

-2004: Established Hoa Phat Trading Co., Ltd

-1/2007: Reorganizing as a group with Hoa Phat Group Joint Stock Company being the Parent Company of its subsidiaries

-8/2007: Establishing Hoa Phat Hai Duong Steel JSC to initiate the Hoa Phat Steel Integrated Complex in Kinh Mon District, Hai Duong Province

-15/11/2007: Listing HPG shares on the Vietnam Stock Exchange

-6/2009: An Thong Mineral Investment JSC became a member of Hoa Phat Group.-12/2009: Finishing the first phase of Hoa Phat Steel Integrated Complex in Hai Duong

-1/2011: Structuring of operation model of the Parent Company by separating the steel production and trading sector

-8/2012: 20th anniversary of Hoa Phat development, Third Class Labour Order awarded by the President

-10/2013: Finishing the second phase of the Hoa Phat Hai Duong Steel Integrated Complex, raising the total capacity of Hoa Phat to 1.15 million tons per year.-3/2015: Hoa Phat Hung Yen Feeds Co., Ltd was officially launched, marking a new step in the Group’s development history by investing the agricultural sector.-2/2016: Establishing Hoa Phat Agriculture Development JSC, which manages andcoordinates the operations of all subsidiaries in the agriculture sector (including feed and breeding)

-2/2016: Finishing the third phase of Hoa Phat Steel Integrated Complex in Hai Duong, raising the total capacity of Hoa Phat to 2 million tons per year

-4/2016: Establishing Hoa Phat Steel Sheet Co., Ltd, implementing the project of prepainted hot dipped galvanized steel sheet, galvanized steel sheet and galvalum steel sheet with the capacity of 400,000 tons per year

-2/2017: Establishing Hoa Phat Dung Quat Steel JSC, initiating Hoa Phat Dung Quat Steel Integrated Complex in Quang Ngai Province with the capacity of 4

million tons per year and the total investment of VND 52,000 billion, marking a turning point in Hoa Phat Group’s development.

-20/8/2017: is a very special milestone because Hoa Phat Group officially celebrates 25 years of construction and development On this occasion, the group also had many welcoming activities such as a cultural show called "Shining talent",football prizes, photo contests

-4/2018: Hoa Phat Steel Co., Ltd officially provides the market with high quality color coated steel sheet products

- Quarter III/2018: Hoa Phat Steel Pipe Co., Ltd decided to invest in the

construction and installation of a large steel pipe production line at the factory in Hung Yen

-10/2018: For the first time, the consumption volume of Construction Steel reached

-11/2020: Hoa Phat Group has officially launched its commercial hot-rolled coil onto the market, which helps optimized Hoa Phat’s steel ecosystem

-12/2020: Hoa Phat Group restructured its operating model with establishment of Corporations in charge of the Group’s business sector Accordingly, 04

Corporations under the Group have been established, including: Iron and Steel, Steel Products, Agriculture and Real Estate

-1/2021: The blast furnace No 4 - Hoa Phat Dung Quat Steel Integrated

Complex was put into operation, marking completion of the entire project, andbringing Hoa Phat’s total crude steel output to 8 million tons/year

-9/2021: The Group decided to establish Hoa Phat Household Appliances Corporation with the following fields of activity: Investing, manufacturing and trading in electrical appliances - household appliances

1.2 Organization Structure:

Board of management:

- Chairman of the board of management: Mr Tran Dinh Long

- Vice chairman of the board of management: Mr Doan Gia Cuong, Mr Nguyen Tuan Manh, Mr Tran Tuan Duong

- Members of the board of management: Mr Hoang Quang Viet, Mr Nguyen NgocQuang, Mr Nguyen Việt Thắng

Supervisory board:

- Supervisory board: Mrs Bui Thi Hai Van

- Members of the Supervisory board: Ms Ngo Lan Anh, Ms Le Minh Thuy, Ms Thai Thi Loc

Board of directors:

- Board of directors: Mr Nguyen Viet Thang

- Deputy Board of directors: Ms Nguyen Thi Thao Nguyen

Organization Structure:

Operating model:

1.3: Products and Services:

-The Group operates in 05 fields: Iron and Steel - Steel Products - Agriculture - Real Estate - Home Appliances

- Iron and steel with strategic products of hot-rolled coil (HRC) and construction steel

- Steel products include: Steel pipes, galvanized steel, wire-drawn steel, stressed steel

pre Hoa Phat has been involved in the field of highpre tech and biosafety agriculture since mid-2015 with the areas of animal feed production, pig farming, cow farmingand poultry farming

- Hoa Phat's real estate business includes real estate in industrial zones and urban areas Some big projects of Hoa Phat such as NORTH NOI URBAN AREA - HUNG YEN, MANDARIN GARDEN HOANG MINH GIAM

- Hoa Phat Refrigeration was established in 2001, owns 20 years of experience in manufacturing Refrigerator, Freezer, Refrigerator branded Hoa Phat, Funiki The company's entire production and assembly lines and equipment are imported from famous brands in the world, modern and fully automated, ensuring stable and durable product quality.

- Steel production is the core business, accounting for 90% of the Group's revenue and profit With a capacity of 8 million tons of crude steel/year, Hoa Phat is the largest steel producer in Southeast Asia

- With 4 large factory chains including: Hoa Phat Hai Duong Iron and Steel Complex, Hoa Phat Dung Quat 1 Iron and Steel Complex, Hung Yen Steel Rolling Factory, Hoa Phat Dung Quat 2 Iron and Steel Complex (under construction) in the expected period) Currently, Hoa Phat is holding the No 1 position in terms of scale in the country in terms of steel production

- In addition to leading the domestic market share, Hoa Phat Steel has exported to

14 countries around the world such as the US, China, Canada, Australia, Japan, Korea, Cambodia, Malaysia,

1.4: SWOT:

Strength:

-Is 1 in the key industry of the country, the number 1 selling brand in the market-Sales and brand network covering the whole country

-High profit, low labor cost, rich ore source

-Having a deep-water port, it is convenient to import ore and produce and the cost

of water transportation is much cheaper than by road

Weakness:

-Inadequate focus on functions that bring the highest added value

-Limited capital is mainly borrowed, depending on the world billet price

-Consumption is low compared to domestic and imported supply while the world economy and real estate industry freeze

-The technology is still backward, the production activity is still low

Opportunities:

-Steel market has good growth prospects

-Steel price increase

-Not much affected by the menstrual cycle

-Growth prospects and great potential

Threats:

-Subject to competition from China's imported steel

-Steel industry still faces overcapacity

-Inflation rate increased

-Foreign exchange rate risk

-Legal barriers when exporting

-Shipping fee increased due to petrol price

-Prices of raw materials fluctuate

Chapter 2: FINANCIAL ANALYSIS

2.1: Balance sheet:

2.2: Income statement:

2.3: Liquidity ratio:

Liquidity ratios, which give an idea of the firm’s ability to pay off debts that are maturing within a year Two of the most commonly used liquidity ratios are discussed:

-Current Ratio: It indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future

From 2019 to 2020, the current ratio decreased from 1.13 to 1.09, showing a decrease in the company's debt repayment ability.=>Bad

From 2020 to 2021, the current ratio will increase from 1.09 to 1.28, showing an increase in the company's debt repayment capacity.=>Good

The table shows that the current ratios are all greater than 1 This is a good sign forthe company, showing that the company is more likely to repay all its debts Neither too high nor too low => shows that the business is using assets quite effectively.=> Good

-Quick Ratio: shows how much capital a business has in cash and cash equivalents

to pay off a short-term debt

The quick ratio over the years increased from 2019 to 2021: 0.41; 0.59; 0.71 Although the indexes are all less than 1, the ability to repay short-term debts is low,but they have increased over the years, showing that this is a good sign

Compared with HSG:

- Current Ratio: Has good liquidity with total assets greater than short-term liabilities, an increase compared to 2020 but compared to rival HSG, this ratio is still lower and needs improvement in the future.=> Bad

- Quick Ratio: this ratio of HPG increases year by year and increases in 2021 with

a rate of 0.71, nearly reaching 1, and compared to HSG, this business only reaches 0.35, HPG is more than twice as high as HSG => Good

Compared with industry:

- Current Ratio: HPG's current ratio is 1.28 This figure shows that it is still at a safe level because it is above 1, but compared to the industry index, it is still lower and needs to be improved next year => BAD

- Quick Ratio: HPG's quick ratio in 2021 is 0.71 higher than the industry index shows better ability to repay short-term debt => GOOD

Current Ratio Quick Ratio

2.4: Assets management ratio

Asset management ratios, which give an idea of how efficiently the firm is using its assets

*Inventory turnover ratio:

- Inventory turnover ratio represents the average number of inventory turnovers in

a period If this index is high, it means that the business is selling fast, and the inventory is not much

- It can be seen that the inventory turnover ratio of 2021 (3.58) increases compared

to 2020 (3.47), 2019(3.33) So, this is good news for the company because the ability to turnover inventory of HPG increases through each year or the

management of inventory of the company improves each year.=> Good

*Accounts Receivable Turnover Ratio:

The large receivables turnover ratio shows that the ability to collect debts from customers is good, and shows that the company has quality business partners who are able to pay debts quickly

-From 2019 to 2020, the receivable turnover ratio decreased from 18.16 to 14.90, lead to a decrease in the ability to collect debts => Bad

-From 2020 to 2021, the receivable turnover ratio increase from 14.90 to 19.69, lead to a increase in the ability to collect debts => Good

*Days sales outstanding (DSO) (Days)

This is an metric that is calculated as the average number of days it takes a company to collect money from a sale after a sale has been made If this ratio is low, it means that the company only needs a few days to collect the money owed

by customers If this ratio is high, it means that the company mainly sells on credit

to customers, the debt period is longer So:

-From 2019 to 2020, the days sales outstanding increase from 20.10 to 24.49,

=>Bad

-From 2020 to 2021, the days sales outstanding decreased from 24.49 to 18.54,

=>Good

*Fixed Asset Turnover Ratio:

This index helps to evaluate the efficiency of using fixed assets of the business The higher this index, the higher the efficiency in using fixed assets of the enterprise

-From 2019 to 2020, the fixed asset turnover ratio decreased from 2.07 to 1.39, shows that the firm has not effectively used its plant and equipment => Bad-From 2020 to 2021, the fixed asset turnover ratio increased from 1.39 to 2.18shows that the firm has effectively used fixed asset => Good

*Total Assets Turnover Ratio:

Used to evaluate the efficiency of the company's use of assets Through this coefficient, we can know how much revenue each dollar of assets generates Total asset turnover ratio increases gradually over the years in the period of 2019 - 2021 (0.64; 0.69; 0,85) showing the better the enterprise's efficiency in using The higherthe total asset turnover ratio, the more effective the company's assets are used in production and business activities

Compared with HSG:

- Inventory Turnover: is an important indicator in the inventory management process The higher this index, the better for businesses that demonstrate good sales and high consumer demand for products And HPG still tries to grow this ratio from 2019 to 2021, with signs of increase but not significant and compared toHSG, HPG is nearly twice lower => Bad

-Accounts Receivable Turnover: The higher the receivables turnover ratio, the more effective the collection of receivables and debts from customers And for HPG, this coefficient will be in 2021 (19.69), but compared to HSG (21.22), it is always lower and needs to be improved => Bad

-Days sales outstanding (DSO): A low DSO means that the company only needs a few days to collect the money owed by customers If this ratio is high, it means that the company mainly sells on credit to customers, the debt period is longer Compared to HSG (17.20), we can see that in 2021 HPG (18.54) has increased gradually => Bad

- Fixed Asset Turnover: The higher this index, the higher the efficiency in using fixed assets of the enterprise and vice versa For HPG, this coefficient in 2021 is 2.18 , however compared to HSG ( it is always lower, needs improvement => Bad