financial index analysis dhg pharmaceutical joint stock company

Compared with3 companies DBD, IMP, and OPC, it can be seen that DHG is quite high compared to other companies in the same industry.. Compared with the 3 companies DBD, IMP and OPC, it pr

GROUP ASSIGNMENT PRINCIPLES OF ACCOUNTING

Binh Dinh Pharmaceutical and Medical Equipment JSC 4

Introduction of selected companies

DHG Pharmaceutical Joint Stock Company

Background

DHG Pharma holds the leading position in Vietnam's pharmaceutical industry in terms ofrevenue, profit, and production capacity with 7.5 billion product units/year, ranking 2ndamong leading enterprises in terms of trade channels and as a supplier The only domesticpharmaceutical manufacturer in the Top 10 leading pharmaceutical companies operating inVietnam DHG Pharmaceutical Joint Stock Company, formerly known as the State-ownedPharmaceutical Enterprise September 2, was established on September 2 1974 After severalchanges of name and form of operation, on September 2, 2004, Hau Giang PharmaceuticalJoint Stock Company equitized and changed its name to Hau Giang Pharmaceutical JointStock Company

In recent years, the company has constantly strived to promote its existing strengths in terms

of an extensive distribution system, production capacity, quality products, highly qualifiedpersonnel, and efficient business Always maintain the pioneering position, brand identity,and reputation In addition, being energized by the contribution package of technical andproduction activities from strategic shareholder Taisho, it is convenient to promptly seizeopportunities on the new path, master technology, and create new products, quality newproducts, serving domestic and international markets, best meeting the needs of allcustomers

The company is continuing to establish and put into operation 07 subsidiaries, helping toincrease business efficiency of the whole group, increasing the number of distributionsubsidiaries to 12 companies, focusing on the Mekong Delta region Long, including A&GPharma, TG Pharma, TOT Pharma, Bali Pharma, VL Pharma, B&T Pharma, TVP Pharma

OPC Pharmaceutical Joint Stock Company

OPC Pharmaceutical Joint-Stock Company (OPC) is a Vietnam-based company engaged in the pharmaceutical industry The Company manufactures and markets drugs and other medical products from natural pharmaceutical materials which are cultivated and processed

at the facilities of the Company It is also involved in the production and wholesale trading of pharmaceutical chemicals and supplies, as well as functional food Moreover, the Company

is involved in wine distillery and bottled water manufacturing On June 13, 2014, the Company announced that it has dissolved its joint venture named OPC EXIM Real Estate Joint Stock Company The company’s current address is at 1017 Hong Bang, Ward 9, District 6, Ho Chi Minh City

Binh Dinh Pharmaceutical and Medical Equipment JSC

Background

Binh Dinh Pharmaceutical and Medical Equipment Joint Stock Company (Bidiphar) is aVietnam-based company primarily engaged in pharmaceuticals sector The Company'sleading business activities are the production and wholesale of medicines, includingantibiotics, antipyretics, pain relievers, cardiovascular drugs, antifungal and antiviral drugs,respiratory drugs, vitamins and functional food, among others Bidiphar is also involved inthe manufacture and distribution of medical equipment, supplies and packaging

Address: 498 Nguyen Thai Hoc, Quy Nhon City, Binh Dinh Province

Imexpharm Corporation

Background

The Company's main business is manufacturing, trading, importing and exporting modern pharmaceutical products, medical instruments, industry raw materials, Products produced are concentrated groups of antipyretic, pain reliever, antibiotics, vitamins, and functional foods Functionality, production revenue still accounts for over 95% and contributes 100% of

profit With an annual revenue of about 350 billion VND, The company accounts for about 3% of Vietnam's pharmaceutical market share, and is in the top 5 companies with the largest pharmaceutical production revenue in Vietnam The company's current address is at No 4, 30/04 Street, Ward 1, Cao Lanh City, Dong Thap Province.

to pay their debts according to this index It can be said that DHG has a very good debt repayment capacity, but it still needs to adjust the ratio to a reasonable number to be able to flexibly invest in other things.

3 Days sale uncollected

For DHG, the DSU ratio is well controlled and decreases year by year This proves that DHG has the ability to recover the sales proceeds in a fairly short period of time This is an advantage that helps the company get cash from the sale of goods quickly and can easily invest in other items Compared with the 3 companies DBD, IMP and OPC, it proves that DHG's debt control from the sale of goods is very good The 3 companies in the same industry above all have a fairly high ratio and keep increasing from 2018-2020, which is a cash disadvantage for all three compared to DHG

4 Days Sale In Inventory

Ending Inventory 269,729,041,858 312,967,359,668 214,908,006,156

Cost of good sold 972,896,278,931 846,933,080,364 765,813,093,618

Ending Inventory 323,809,107,094 350,457,017,273 424,237,469,275

Cost of good sold 715,187,247,219 874,534,666,490 822,376,136,443

Ending Inventory 435,878,567,196 550,577,884,952 538,564,090,611

Cost of good sold 571,410,793,173 572,536,741,111 590,010,266,514

Ending Inventory 891,486,976,436 725,438,891,568 826,585,429,976

Cost of good sold 2,165,405,025,080 2,183,050,050,314 1,944,243,042,082

In general, the DSI ratio of DHG in all 3 has a slight increase from 2018 -2020 Compared with 3 companies in the same industry, this number is approximately average (neither too high nor too low) This shows that DHG has the ability to control and sell its inventory quite well However, increasing this ratio can also be seen as a bad sign for businesses In 2020, thecompany's cost of goods sold decreased compared to 2 years ago but DSI increased again, showing that DHG is having problems in competing with other companies in the same industry Usually, the lower the ratio, the better, but if it's too low, the company won't have enough stock to supply if needed So in this figure, DHG also did quite well

Conclusion:

In short, DHG's liquidity ratios are in the medium to good range It shows that DHG managesquite well in this ratio and is a company with stable growth potential compared to the 3 companies in the same industry However, in order to achieve better results, DHG still considers and improves the average figures

B Activity ratios

1 Account receivable turnover ratio

973 700 158, , ,811 988,337 900, ,052 363,904 177 143, ,Account

For DHG, the AR Turnover has increased steadily and increased significantly (total increase

of 1.72) Thereby, we see the ability to collect short-term debt and provide credit to customers

is effective This will attract investors as DHG recovers debts faster, improves cash flow, and creates capital initiative

When looking at the numerator, net sales fluctuated but not much The 30% decrease in the denominator (2018-2020) has caused the AR Turnover index to increase sharply This shows that DHG is becoming cautious in granting credit to customers

When compared with the remaining 3 companies that tend to increase the AR Turnover index, DHG decreases This shows that DHG has gradually better ability to collect debts and

is tending to prevent bad debt risks

COGS 715 187 247, , ,219 874,534 666, ,490 822,376 136 443, ,Average

For DHG, Inventory turnover ratio decreased year by year This shows that DHG's sales time

is slower, but the number is at an average level and that meets the availability of goods in stock without shortage

Coming to the denominator and numerator shows volatility as co-increasing over 2018-2019 with a higher percentage increase in the denominator (6% vs 0.8%) and a co-decreasing period 2019-2020 with a larger percentage decrease in the numerator (11% vs 6%)Compared to the other 3 companies, DHG has an average Inventory Turnover index When the OPC in 2020 with a ratio of 1.08 shows that the inventory is not much, there may be an out-of-stock situation With DBD, it is a bit high with a ratio of 2.9, which is more risky when

it is easy to encounter inventory stagnation DHG and IMP have a stable ratio, minimizing risks but also meeting market demand

3 Total assets turnover ratio

Comment:

For DHG, the total asset turnover ratio decreased steadily This shows that DHG's efficiency

in using existing assets to generate revenue is decreasing

To the numerator there are slight but insignificant fluctuations while the denominator did nothave too much difference in the period of 2018-2019, but in the period of 2019-2020, there was a sudden increase of 6.5% This signals that there is a high probability that sales in the following years will increase

Compared to the common ground with the other 3 companies, DHG's total asset turnover index is quite good and only loses to IMP with an index in 2020 of 1.06

Conclusion:

After analyzing the activity ratios, DHG showed that the management ability is good, but the asset utilization rate has not improved However, the index of DHG is at a good level When comparing DHG with 3 other companies, we found that DHG performed much better, even though DHG was not the best on some indicators

Through comparison between companies, we can see that DHG's leverage ratio is lower than that of the other two companies, and higher than IMP, which means that DHG's total debt to assets has a highrisk ratio lower risk than the other 2 companies, DBD and OPC

Looking at these 3 companies, OCP > DBD > DHG > IMP in terms of financial risk DBD number 31.22 in 2020 shows that 31.22% of this company's assets are financed by creditors That is, sponsors and shareholders contribute 33.22% of the company's assets, the remaining 100-33.22%

2 Times interest earned ratio

In general, the indicators show that DHG's ability to pay interest on non-tax income is high compared

to two companies, DBD and OPC This ratio shows that the company's cash flow is very stableWhen looking at the data table, we can see that DHG's interest coverage ratio is always at a stable high level, and has a gradual increase from 2018 to 2020, and a remarkable milestone between 2019 and 2020 That proves Show that the company has had a successful and productive year

3 Working capital ratio

When comparing with 3 companies in the same industry, we can see that the result is the highest working capital ratio of DHG That is, the amount of liquid assets of the company thatcan pay its debts during its operation

Based on the data table, we can see that DHG's working capital ratio over the past 3 years has grown strongly, although 2020 is lower than 2019 but the difference is not significant 0.2 is the difference between 2019 and 2020

The enterprise has enough capacity to pay its debts as well as to continue operating its business

Conclusion:

After looking at the analysis of the above 3 indicators, it can be seen that DHG has always kept these indicators at a stable level, and is relatively high when compared to the companies

in the same industry mentioned above

Shows that in the period from 2018 to 2020, DHG has had 2 successful years of work when the indicators show that there is no serious impact on the company's assets

The ability to pay the items stated is still within the control of the company And that's a good sign

Although the year 2018 to 2019 has a slight decrease from 15.52 to 15.34, it will increase to 16.66 in 2020 Overall, this is quite good for this company.

For ROE, DHG's company has clearly shown the difference with other companies in the sameindustry when comparing DHG has the leading ROE from 2018-2020 among companies But perhaps

in this index, when the company compares itself over the years, there is almost no significant growth

3 Gross margin ratio

Net Sale 1,401,024,316,251 1,261,729,021,484 1,256,952,371,543

Cost Of Good Sold 972,896,278,931 846,933,080,364 765,813,093,618

Net Sale 1,184,817,729,231 1,402,454,493,864 1,369,421,714,781

Cost Of Good Sold 715,187,247,219 874,534,666,490 822,376,136,443

Net Sale 98,144,989,961 989,389,861,098 965,590,544,373

Cost Of Good Sold 571,410,793,173 572,536,741,111 590,010,266,514

Gross margin ratio 44.22 43.97 48.23

Looking at DHG's Net Income section, it can be seen that in 2020 there has been a strong growth Despite having lower Net Sales than 2018, 2019 but because the company has reduced COGS, it still grows significantly.

Conclusion:

After comparing the ratios of Profitability ratios, we can easily see that DHG is the leader in all indicators, with high profitability and profitability

At the same time in 2020, DHG has made a big progress in reducing COGS but increasing net income This is a company that can grow quite well in the distant future.

For DHG, the company's EPS increased slightly from 2018 to 2019 From 2019 to 2020, theEPS increased sharply because the company's net profit increased a lot Thereby, it provesthat the company is operating well and making a lot of profit In addition, the company's EPS

in 3 years is greater than 1.5, showing that the company is doing very efficiently

When compared with the remaining 3 companies, it can be seen that DHG's EPS is the largestamong the 3 companies

For DBD, DHG's EPS is nearly 2 times larger than that of DBD year by year This repeats thesame for the IMP

For OPC, DHG's EPS is larger but the difference is not much

In general, it can be seen that DHG is the most efficient and profitable company

2 Price to earnings ratio

Market value per share49,6 46,0 59,5

When compared with the other 3 companies, it can be seen that the P/E ratio of DHG is at anaverage level

In 2018, DHG's P/E was much lower than IMP's (17.79 versus 24.17 for IMP) However, ahigh P/E is not a good thing because when looking at EPS, IMP's EPS is lower than DHG's,showing that IMP's business performance and profitability are worse than that of DHG Whenother companies have erratic ups and downs, DHG's P/E has remained stable for years

3 Book value per share

For DHG, the BVPS ratio tends to grow year by year When comparing BVPS with DHG'smarket value per share, a big difference can be seen However, DHG's share price still tends

to increase year by year, proving that investors still trust the company

When compared with the other 3 companies, DHG's BVPS is only larger than DBD For theother two companies, there is not much difference However, when looking at the share price,

it can be seen that the share price of DHG is larger than the other 3 companies and tends toincrease year by year Thereby, it proves that DHG's business activities and profitability arehigher than other companies

4 Price to book ratio

When compared to the other 3 companies, DHG's P/B ratios over the past 3 years are allmuch higher When companies tend to increase or decrease, DHG's P/B ratio tends toincrease, both in numerator and denominator Thereby, it proves that DHG's business is moreefficient and profitable than other companies.

Conclusion:

In the market ratio, DHG's ratios are almost all better or at stable levels However, it is easy

to see that while other companies' ratios are not stable, DHG's ratios tend to grow year byyear This shows that the company's business is still progressing and investors still believethat the company will perform better in the future