OVERVIEW OF QUANG NINH MINERAL WATER CORPORATION
Introduction of the company
Picture 1 - Logo of Quang Ninh Mineral Water Corporation Company Name: QUANG NINH MINERAL WATER JOINT STOCK COMPANY
The Company's headquarters is located at: Group 3A, Area 4, Suoi Mo Street, Bai Chay Ward, Ha Long City, Quang Ninh Province.
Email: nuockhoangquangninh@yahoo.com.vn
Website: http://nuockhoangquangninh.com.vn/
Official date of becoming a public company: April 15, 2016 (according to Official Dispatch No 1952/UBCK-GSĐC dated April 15, 2016 of the State Securities Commission).
Business registration certificate: No 5700379618 issued by the Department of Planning and Investment of Quang Ninh province for the first time on September
1, 2004, registered for the 10th change on December 13, 2021.
Type of business: Joint Stock Company.
Legal representative: Nguyen Thieu Nam - Chairman of the board of directors Charter capital: 80,000,000,000 VND (Eighty billion VND)
The company has 3 affiliated factories including:
• Quang Hanh natural mineral water factory: Address: Km 9, Quang Hanh Ward, Cam Pha town, Quang Ninh province.
Picture 2 - Quang Hanh natural mineral water factory
Suoi Mo 1 Natural Mineral Water Factory: Address: Group 3A, Area 4, Bai Chay Ward, Ha Long City, Quang Ninh Province.
Picture 3 - Suoi Mo 1 natural mineral water factorySuoi Mo 2 Natural Mineral Water Factory: Address: Cai Dam, Bai ChayWard, Ha Long City, Quang Ninh Province.
Picture 4 - Suoi Mo 2 natural mineral water factory 2 1.1.2 History of formation and development
Before equitization, Quang Ninh Mineral Water and Trading Service One Member Company Limited was an enterprise under the management of the Quang Ninh Provincial Party Committee with the main business lines of exploiting, producing and trading natural mineral waters, soft drinks, daily water
The Company's predecessor was Quang Ninh Mineral Water Enterprise, established on July 17, 1989 under Decision No 381/QD-UB of the People's Committee of Quang Ninh province and managed by the Quang Ninh Provincial Party Committee.
In 1993, Quang Ninh Mineral Water Enterprise was merged into Quang Ninh Coastal Company according to Decision No 1396/QD-UB dated July 15, 1993 of the People's Committee of Quang Ninh province and became a member unit of
Duyen Hai Quang Ninh Company under the management of Quang Ninh Provincial Party Committee Office.
In 2002, Quang Ninh Mineral Water Enterprise was separated and renamed Quang Ninh Mineral Water Company according to Decision No 463/QD-UB dated January 28, 2002 and managed by the Quang Ninh Provincial Party Committee.
In 2004 the Company transformed into; Quang Ninh Mineral Water and Trading Service Company Limited according to Decision No 2492/QD-UB dated July 26, 2004 and is directly managed by the Quang Ninh Provincial Party Committee office.
In 2006, Quang Ninh Mineral Water One Member LLC was renamed Quang Ninh Mineral Water and Trade Service One Member LLC according to Decision
No 32 - QD/VPTU dated January 10, 2006 of the Provincial Office Quang Ninh Committee until now.
On October 19, 2015, Quang Ninh Provincial Party Committee approved the equitization plan and transformed Quang Ninh Mineral Water and Trading and Services One-Member LLC into a joint stock company in Decision No 03-QD-TU The Company's charter capital is 80,000,000,000 VND (Eighty billion VND).
On December 2, 2015, the Company coordinated with Ban Viet Securities Joint Stock Company to successfully conduct a public auction of 159,100 shares (accounting for 1.99% of charter capital) at Ban Viet Securities Joint Stock Company (due to the total price) offering value at par value of less than 10 billion VND) with a starting price of 11,100 VND/share Highest successful bid: 13,500
VND/share, lowest successful bid: 11,100 VND/share, average successful bid: 11,421 VND/share.
On December 22, 2015, the Company successfully organized the first General Meeting of Shareholders of Quang Ninh Mineral Water Joint Stock Company and officially operated in the form of a Joint Stock Company under Business
Registration Certificate No 5700379618 issued by the Department of Planning and Investment of Quang Ninh province for the first time on September 1, 2004, registered for the 7th change on December 25, 2015.
December 22, 2016: The company officially registered to trade on the trading system for unlisted securities ("UpCom") organized by Hanoi Stock Exchange.
Since the official transformation into a joint stock company (December 25, 2015) until now, the Company has had no change in equity, the Charter Capital level remains unchanged at 80,000,000,000 VND (Eight) ten billion dong).
When the company was first established, it only had a 90 m2 factory and a mineral water production line with a capacity of 1,000 bottles/shift Up to now, the Company has a total industrial area of 9,000 m2 and over 3,000 m2 of spacious, clean and beautiful factory with 5 relatively modern machinery and equipment lines, producing and consuming 45 million liters of mineral water / year with 10 product categories of 4 different mineral water brands, which are:
- Quang Hanh natural mineral water,
- Quang Hanh –Faith mineral water with salted lemon flavor,
Business activities
Production of non-alcoholic beverages and mineral water
Water exploitation, treatment and supply
Other business support service activities
Retailing of beverages in specialized stores
Key products of the Company
Quang Ninh Mineral Water Joint Stock Company mainly produces and trades mineral water exploited from mineral springs in Quang Ninh Current main production products include:
Natural mineral product line: Quang Hanh natural mineral water with added carbonation 500 ml, Quang Hanh Faith mineral water - salted lemon flavor
Bottled water product line: Suoi Mo drinking water in 18.9L
ANALYSIS OF THE INTERNAL AND EXTERNAL ENVIRONMENT
Internal environment
The company always aims to constantly innovate and diversify products and services, satisfying increasing customer needs with a commitment to quality.
The company will maintain stable human resources, focus on directing production to achieve high productivity, thoroughly saving input costs for production, best implementing investment projects, repairing and maintaining machines equipment and factories according to the set plan
2.1.2 Medium and long-term development strategy
Maintain and stabilize traditional market areas, gradually perfect the distribution system in accordance with the shift in product structure and market trends.
Implement improvements and upgrade packaging designs and quality of traditional products to meet existing customer needs.
Maintaining key traditional products, in order to maintain the brand and unique characteristics of Quang Hanh natural mineral water, serves as a basis to maintain consumer trust, from which the Company develops new products The new product is inherited from available mineral water sources that the Company is managing and exploiting
For new product development work:
Being able to manage the exploitation and production of natural mineral water from mineral water with high mineralization content in Quang Hanh is a unique advantage of the Company This is also the most important condition for the Company to focus on researching and producing new products with high commercial value.
New products will be developed on the basis of evaluating customer segments and consumer markets, but must ensure the unique characteristics of each natural mineral water source that the Company is managing and exploiting
Maintain financial management implementation according to the statistical accounting ordinance Take advantage of the State's loan and tax reduction policies as well as other local incentives in the fields of investment, product development, and export
Make full use of your own capital sources, carry out investment loans according to the roadmap corresponding to the investment stages to match the development speed and planned consumption results to minimize financial costs of loan capital
Increase capital turnover, especially capital in products with high commercial value, through flexible application of payment methods for customers Strive to increase investment capital turnover for circulating packaging through recovery management and use of circulating packaging to reduce bank loans to improve business efficiency
Diversify flexible payment methods for suppliers, make the best possible use of material capital through suppliers at the same level while still ensuring financial security for the Company, focusing on Focus on expanding markets and improving production and business efficiency
Classification by qualifications: unskilled workers make up the majority, due to the characteristics of the industry, qualifications are not emphasized A small number of workers at the University and College level with management, specialized and technical knowledge take on higher operational positions They are people who have been trained and graduated with bachelor's degrees through professional schools and training classes
Picture 5 - Labor structure according to professional level
The company has well implemented training policies, compensation policies, and labor safety policies Working regime of 8 hours/day, overtime not exceeding
4 hours/day, as well as a policy to improve the quality of shift meals to ensure the health of workers working most effectively.
External environment
- Lending interest rates of banks: Contrary to the trend of increasing interest rates in the world, Vietnam still keeps low lending interest rates to support economic recovery, accordingly, the State Bank of Vietnam is also excited Reduce interest rates from 0.5 - 1% in 2021 and 2022 to support businesses.
- Monetary policy: According to Mr Pham Chi Quang, Director of the Monetary Policy Department (State Bank) in 2023, besides supporting the process of economic growth recovery, the most important and consistent goal of The State Bank is responsible for administering monetary policy to ensure the stability of the currency and control inflation Strive to reduce lending interest rates Synchronous and flexible management of monetary policy tools contributes to maintaining macroeconomic stability, controlling inflation, and actively supporting socio- economic recovery and development Reasonable monetary regulation, close coordination with fiscal policy to create favorable conditions for the issuance of government bonds.
Effective monetary policy has continued to create and strengthen the confidence of businesses and people Through contact, most businesses highly appreciated the support policies of the Government and the Central Bank In particular, interest rate and exchange rate policies have positive effects and directly support businesses thanks to the reduction of loan interest rates and financial costs, thereby reducing costs to maintain and stabilize costs stability and recovery, overcoming difficulties.
- Economic inflation rate: In 2022, GDP growth in the first quarter is 5.05%, in the second quarter: 7.83%, in the third quarter: 13.71% and in the fourth quarter: 5.92%; for the whole year is 8.02%, much higher than the set target of 6.0- 6.5% as well as the reality over the past many years and even higher than in 2021 (2.58% ) due to the Covid-19 epidemic blockade, which seriously affected production and business activities.
2023: According to the report of the General Statistics Office, gross domestic product GDP in the third quarter of 2023 is estimated to increase by 5.33% over the same period last year In general, GDP in the first 9 months of 2023 will increase by 4.24% over the same period last year period last year The total added value of the service sector increased by 6.32% In September, the consumer price index (CPI) increased by 1.08% compared to the previous month Compared to December 2022, September CPI increased by 3.12% and compared to the same period last year increased by 3.66% Average CPI in the third quarter of 2023 increased by 2.89% compared to the third quarter of 2022 In the first 9 months of this year, CPI increased by 3.16% over the same period last year; Core inflation increased by 4.49% With GDP, CPI, and inflation rising basically not high, business and production activities of enterprises will become more favorable
- Tax policy: In 2023, the tax industry continues to implement preferential corporate income tax policies for businesses with new investment projects and expansion investments according to the law on income tax enterprises for enterprises that meet the conditions of preferential areas (areas with difficult or extremely difficult socio-economic conditions) and meet the conditions of preferential fields and industries.
- Unemployment rate: unemployment of workers continues to maintain a downward trend compared to the previous quarter and the same period last year Specifically, the number of unemployed people of working age in the third quarter of 2022 is nearly 1.06 million people, down 13.9 thousand people compared to the previous quarter and especially down 658.1 thousand people over the same period last year The unemployment rate among the working age in the third quarter of
2022 is 2.28%, down 0.04 percentage points compared to the previous quarter and down 1.70 percentage points over the same period last year
Picture 7 - Unemployment rate in the working age by quarter, 2020-2022
- TPP Agreement: Participating in signing the Trans-Pacific Strategic Economic Partnership Agreement will create many new opportunities for the non- alcoholic beverage industry in Vietnam such as: Increased exports due to tax elimination by TPP countries According to commitments, the self-certification mechanism of origin is applied, opportunities to attract investment from US businesses and other TPP countries into Vietnam's beverage industry, Vietnamese businesses have the opportunity to participate into the global value chain However, TPP also brings many challenges when the beverage industry has to accept competition from foreign businesses The reduction of import tax from 30% on carbonated beverages to 0% has brought Vietnam's beverage industry into fierce competition The preference for using foreign products among a segment of Vietnamese consumers will reduce the market share of purely domestic enterprises.
Political, policy and legal factors
In Vietnam the political environment is relatively stable, so there is a good opportunity for economic sectors, business and development enterprises Stable political institutions and expanded political policies help economic sectors and businesses have favorable conditions in developing production and business relationships with outside parties.
The legal system in our country still has some unclear points, which also greatly affects copyright protection as well as unfair competition companies have a negative impact on the company's development.
Vietnam's accession to the World Trade Organization (WTO) opens up opportunities but also brings many difficulties for Vietnamese businesses, and the mineral water industry is no exception when it has to compete fiercely with other companies Foreign countries have strong capabilities in branding, finance, technology and management.
For Quang Ninh mineral water, the main raw material is natural mineral water
Vietnam belongs to the tropical climate zone with hot and humid monsoons, summers often have long periods of heat, and the demand for beverage products is huge The environment is increasingly polluted, requiring companies to invest in industrial processes Modern technology to treat waste in accordance with allowed standards will increase the company's production costs Natural disasters like storms and floods make it difficult to transport from the place of production to the place of consumption.
During the rainy and stormy season, the business's production and business progress is likely to stagnate when the factory has to stop operating, and product quality is also seriously affected This negatively impacts the Company's production and business situation Therefore, it is necessary to have contingency plans to anticipate risks caused by natural disasters, storms and floods, to the stability of production in the organization.
Society is increasingly developing, since then people are paying special attention to taking care of their health Therefore, adding an amount of water every day is one of the habits of Vietnamese people People's healthy lifestyle has helped the company have a certain position in the market.
According to the General Statistics Office, Ministry of Planning and Investment, the average population in 2022 of the country is estimated at 99.46 million people, an increase of 955,500 people, equivalent to an increase of 0.97% compared to 2021 In particular, the population urban population 37.09 million people, accounting for 37.3%; The rural population is 62.37 million people, accounting for 62.7% The large population has made Vietnam a potential market for beverage consumption, including mineral water This is also an opportunity for Quang Ninh Mineral Water Joint Stock Company to develop.
ANALYSIS OF FINANCIAL INDICATORS
Payability parameters
Current solvency is a parameter that indicates a company's ability to meet short-term debt obligations This parameter provides a simple indication of the extent to which short-term liabilities are covered by assets that are expected to be quickly converted into cash It emphasizes the ability of short-term assets to be converted into cash in relation to short-term liabilities
Through the chart above, it can be seen that the current solvency of the business has increased continuously over 5 years Specifically
In 2015, the company's current solvency only reached 1.1 while the industry average at that time was up to 14.8, showing that the company's ability to pay from its available assets is very low compared to its peers other competitors.
However, by 2016 this number had improved to 2.6, in 2017 it increased to 4.75, in 2018 it increased to 6.23 and by 2019 the company's current solvency was 7.3.
During the period from 2016 to 2019, the company's current ratio was always higher than the industry average, this shows that the ability to convert short-term assets into cash is being kept at a stable level more stable than its competitors in the same industry, the business has the ability to pay its debts and the extent to which the business ensures debt repayment is higher than other competitors, the company's financial situation company is rated as good.
This parameter is an additional support tool for the current solvency parameter when evaluating solvency It is similar to the current ratio except that there is no inventory in the numerator because inventory is the least negotiable of all current assets Quick liquidity reflects the company's ability to pay debts with short-term assets that can be converted into cash as quickly as possible
In general, a business's quick payment ability has a growth rate quite similar to its current payment ability.
In 2015, this index was only 0.8, less than 1, while the current ratio index was greater than 1 This shows that businesses have inventory that accounts for a relatively large proportion of short-term assets compared to short-term debt In cases where inventory is difficult to convert into cash, businesses will encounter problems in paying short-term debt.
From 2016-2019, this index has increased continuously for 4 years
Specifically, in 2016 it was 2.2, in 2017 it was 4.24, in 2018 it was 5.54, in 2019 it was 6.17 and during this period the company's quick liquidity index was always higher than the industry average, showing that The business has enough capacity to pay short-term debt with its liquid assets.
Customer receivable turnover provides an internal source of information about the quality of customer receivables and the company's efficiency in debt collection activities
Customer receivables turnover in the period 2015-2017 was higher than that of competitors in the industry In 2016, it increased sharply to 221.45 cycles, higher than the industry average of 137.35, showing that customer receivables turnover has not been well controlled This index is too high also means that the business's credit policy is poor considering cash flow, customers whose debts are collected may become dissatisfied or upset and the business will miss out on future customers.
By 2017, this index decreased to 125.45 rounds, higher than the industry average of 73.76 rounds, this shows that businesses have gradually controlled customer receivables turnover.
By 2018, customer receivable turnover decreased sharply to 6.96 turnovers, only 0.9 turnovers higher than the industry average This is a positive sign that the business has quite good policies to control this turnover
In 2019, compared to the industry average, this index was only lower than 0.23, showing that the company's customer receivable turnover tends to improve Quang Ninh Mineral Water Company always builds a very detailed and strict production and business plan for the year, so the control of operating cycles is carried out very effectively.
Average collection period is the average amount of time it takes for a company's customer receivables to be converted into cash.
In general, from 2015 to 2017, according to the table above, we can see that the average collection period of the business seems to be at a low level and increases quite a bit compared to other companies and lower than the industry average A low average collection period is often beneficial to a business and indicates that the business has collected payments more quickly.
From 2018 to 2019, the average collection period index increased sharply, nearly equivalent to that of competing businesses as well as higher than the industry average (accounting for nearly 90 days) This shows that the company is increasingly loosening its credit policy to allow customers a longer period of time before customers have to pay outstanding invoices This could promise a big boost to sales in exchange for long payment terms to attract and retain customers as it scales.
If compared with the industry average, we can clearly see a clear difference in the efficiency of collecting customer receivables of the company and the industry
We can see that the company has a slower debt collection speed and is less efficient than the industry average.
Inventory is a part of reserve assets with the purpose of ensuring the normal and continuous production and business process Inventory turnover represents the number of times the average inventory is sold during the period
From 2015 to 2019, the enterprise's inventory turnover index increased Specifically:
- In 2015 it was 9.9 rounds and in 2016 it increased to 13.5 rounds.
- In 2017, it increased to 20 rounds.
- In 2018 there was still an increase but the number was not significant, still maintained at 20 rounds.
- By 2019, this index increased to 22.5 rounds.
We see that the number of inventory turnovers over the past 5 years tends to increase and compared to the industry average, the company's inventory turnover index is always 1~5 times higher, this shows the effectiveness of the work The company's inventory management is highly effective, the business sells quickly, inventory is not stagnant, the import plan is effective and meets customer needs
Debt parameters
This parameter is used to evaluate the company's level of loan usage
During the period 2015 - 2019, the company's debt-to-equity ratio tended to decrease continuously from 1.5% to 0.15%, showing a high level of equity financing During this period, the nature of the business and the volatility of cash flows are low This also creates a safety cushion and will be less prone to risks and difficulties.
Compared to the industry average, the company's debt-to-equity ratio is lower, showing that the company gives creditors a sense of security because the company uses more equity than other companies in the industry Besides, it also shows that the company's creditworthiness is higher and its financial risk is lower than other companies in the industry
This parameter shows how total assets are financed by debt.
Through the calculated data table, we can see that the debt-to-asset ratio from
2015 to 2019 decreased from 0.6% to 0.13% Shows that businesses are borrowing less and less This may mean that businesses gradually have high financial autonomy.
The lower the debt to total assets ratio, the lower the financial risk In general, the company's debt-to-asset (D/A) ratio is lower than the industry average (from 2017-2019) Therefore, financial risk may also be lower than that of companies in the industry.
3.2.3 Long-term debt to long-term capital parameters
The long-term debt parameter is equal to the ratio of long-term debt to the company's total long-term capital This ratio shows how much long-term debt accounts for the company's total long-term capital structure Long-term capital structure includes long-term debt plus equity capital (equity) This ratio represents the importance of long-term debt in a company's capital structure.
Long-term debt to long-term capital parameters
From the calculated data, we see that the company's long-term debt parameters in 2015-2019 gradually decreased from 0.16% to 0.04% This shows that the proportion of long-term debt in the company's capital is low and has little impact on the company.
This ratio of the company is lower than the industry average, showing that compared to other companies in the industry, there has not been a policy to exploit leverage advantages The company does not invest in large-scale projects, focusing mainly on production.
Number of loan interest guarantees: This parameter is a tool to measure the company's ability to meet debt and financial costs and the ability to avoid the risk of bankruptcy In other words, it represents the company's ability to meet its debt obligations with the income generated from its business activities.
Through the table we can see that the number of loan interest guarantees over the 5 years 2015-2019 fluctuated continuously due to market fluctuations.Although the highest in this period was 2017 (17,766.2%), it was significantly higher than the whole industry, so it can be predicted that revenue is enough to pay interest on loans.
Compared to the industry average, from 2015 to 2019, the company's number of loan interest guarantees was always higher in covering financial costs from operating income, showing that the company has a relative margin of safety good.
Profitability parameters
Operating profit margin will indicate the company's effectiveness in controlling production costs.
In 2015, operating profit margin was 25%, meaning production costs accounted for 75% of revenue Meanwhile, the average operating profit margin is 31%, it can be seen that Quang Ninh company is in a disadvantageous position in controlling costs compared to other companies in the same industry.
But this number increased significantly in 2016, to 32% compared to the industry average (28%) during the same period This shows that the company has an advantage in controlling costs.
By 2017, it increased significantly to 38%, but compared to 35% of the industry average in the same year, there was no big difference compared to competitors because the market consumed mineral water in particular as well as bottled water in general is increasing during this period.
In 2018, operating profit margin decreased to only 14% At the same time, the industry average also decreased significantly (20%), but in general, the operating profit margin of rival companies is still high and in 2019, the operating profit margin was 21%, with an increase Growth is quite strong but still far away from competitors in the same industry The reason for two consecutive years of being so far behind their competitors is because in the Vietnamese market, bottled water brands are still on a fierce race track such as Lavie water, Vinh Hao water, Aquafina water with promotional and marketing campaigns loudly So that greatly affected the company's revenue at that time.
A tool to measure profitability on sales after taking into account all costs and corporate income taxes.
In general, net profit margin parameters in 2015-2017 had a rather slow growth of 6.7%; 8.8% and the highest increase in 3 years was 10% in 2017 This shows that revenue grew quite strongly thanks to the company spending on sales and operating costs, so the sales policy was also improved and thereby increased profits The strong growth in revenue is due to the company's promoted sales policy, increased consumer demand and the use of many new technological equipment, improving production capacity Compared to competitors in the same industry at that time, the company performed production and business more effectively.
By 2018, there was a very sharp decline, net profit margin was only 2.4%, and in 2019, it regained the advantage of 10.6% However, compared to the industry average, the company has greatly reduced efficiency in production The reason is due to the great influence from other big brands on the market
Total asset turnover: This parameter measures the conversion rate of total assets to generate revenue.
From 2015 - 2016, the total asset turnover index of a business tends to increase from 1 VND of asset can generate 1.74 VND of revenue to 1 VND of asset can generate 2.3 VND of revenue, as can be seen During this period, the enterprise has a plan to use its assets more effectively and profit positively. But from 2016 - 2018, this number has decreased by 1.4, showing that businesses are not using capital effectively.
By 2019, this index increased to 1.5, although not a large number, this is also a positive sign in businesses using assets more effectively.
Although the company's asset utilization efficiency in the period 2016-2019 tends to decrease, compared to the industry average, this index of the company is always higher This shows that the business also has a plan to use assets effectively.
3.3.4 Income on total assets (ROA)
Represents profitability in relation to total assets.
In 2015, the company's ROA was 11.8% compared to the industry average (8.05%), it can be seen that Quang Ninh has an advantage in effectively using the company's assets to create profits profitable compared to competitors.
By 2016-2017, ROA increased sharply (21.2% and 19.1%) and stabilized for two consecutive years although the amount of assets was less than in 2015 but profits increased higher than 2015 The reason is Because in 2015, Quang Ninh Mineral Water and Trading Service One Member Company Limited transformed into Quang Ninh Mineral Water Joint Stock Company, so total assets increased thanks to individuals contributing capital.
In 2018, the ROA parameter decreased sharply, to 3.5%, net revenue decreased by 17% compared to 2017 Because the company encountered difficulties due to increasing competition in the bottled water industry and complicated developments In general, this year the company did not complete the desired plan.
By 2019, it increased sharply by 16.4%, profit after tax increased by 423.07% compared to 2018, having an advantage compared to competitors in the same industry.
Compared to the industry average, the company's ROA is higher Through this, we can see that the company's profitability on total assets during this period is more effective than its competitors.
This parameter indicates a business's efficiency in generating income for its shareholders When evaluating the efficiency of capital use, ROE is always one of the first and most important indicators
It can be clearly seen that the ROE index in the period 2015-2019 is decreasing year by year and the sharpest decrease is still in 2018 because the company encountered difficulties affecting net revenue from insurance and services, which in turn also affected company's profit after tax.
But compared to the market, the company's ROE index is always much higher than the industry average and has decreased slightly over the years but is still higher than its competitors During these years, businesses have managed capital well, thereby improving income generation for their shareholders
Market parameters
A group of market value parameters related to a company's stock price compared to its earnings, cash flows and accounting value These parameters provide managers with information about investors' assessments of the company's past performance and future prospects
3.4.1 Earnings per share parameters (EPS)
Describes the level of profit after corporate income tax that the company achieves per share issued and outstanding Company shares have par value: 10,000 VND/share.
In 2015, the company's EPS was zero because it was not registered on the stock exchange It was not until 2016 that the company registered to trade UPCOM.
From 2016-2019, the basic profit per share of Quang Ninh Mineral Water Company tended to decrease and still decreased the most in 2018 The reason was due to the sharp decrease in profit after tax, causing the basic profit above The company's shares fell sharply.
And in general, compared to the industry average, the company's EPS is much lower This shows that the company's return on equity is not highly effective compared to its competitors.
The price-to-earnings ratio indicates how much investors value a company
If the P/E ratio is low: This shows that the stock that investors are considering is undervalued It indicates that the business may be facing some difficult problems, requiring investors to consider carefully before making investment decisions However, from another perspective, a low P/E indicates the possibility of a company suddenly making a sudden profit (for example, selling assets).
If the P/E ratio is high: This shows that the stock that investors are considering is highly appreciated and has great future prospects However, in another situation, a high P/E index will indicate that the business is at the bottom of the business cycle
We can see that the business's P/E seems to be low compared to other companies and higher than the industry average from 2017-2018 But we see that businesses with this index are growing steadily Factors that directly affect P/E such as the market value of stocks and EPS do not fluctuate much This shows that the enterprise's business activities are stable and growing steadily Therefore, Quang Ninh Mineral Water Company is also a stock code worth paying attention to for investors.
STRENGTHS AND WEAKNESSES ANALYSIS
Strength
Through the current solvency index, we can see that the ability of short-term assets to be converted into cash is kept at a stable level and tends to increase The enterprise has strong finances and is capable of paying off debts and the level at which the enterprise ensures debt repayment is higher than other competitors, the company's financial situation is assessed good This is also an important factor in creating trust for business partners and suppliers in the company.
The quick ratio of a business tends to increase continuously and is greater than 1.0, showing that the business has the ability to quickly pay short-term obligations without having to use inventory This shows that the business has flexibility and stability in dealing with short-term debts, and is able to meet urgent financial requirements effectively.
We see that the number of inventory turnovers over the past 5 years tends to increase, this shows that the company's inventory management is highly effective, the business sells goods quickly, and inventory is not damaged There is a lot of backlog, the import plan is effective and meets customer needs, thereby helping to increase operational efficiency and reduce inventory cycle time.
The company's debt-to-equity ratio is lower than 1 (except 2015), showing that the company has better debt management ability and is less dependent on borrowing capital This can indicate financial stability and ability to pay off current and future debt A low debt ratio can also increase its ability to attract investors and credit, while also providing assurance to stakeholders regarding its ability to pay interest and repay debt on time Thereby, it also proves that the business's creditworthiness is high and the company's financial risk is quite low.
Debt to total assets ratio below 1 shows that the total debt of the business does not exceed the value of assets that the business owns This can show that the business has the ability to pay debt reliably and manage finances effectively Therefore, the financial risk of the business is low That also leads to the company having more opportunities to access loans to expand production and business activities, helping to increase growth and increase competition in the industry.
The company's ROA in the period 2015 - 2019 is usually stable above 10% Thereby, we can see that the company's profitability on total assets during this period is more effective than its competitors Businesses use assets to generate profits effectively A high ROA index proves that a business has a competitive advantage over its competitors, can work more efficiently and generate better profits from the same level of asset investment
Weakness
The ratio of long-term debt in the company's capital source is low and has little impact on the company The business has not yet come up with a policy to exploit leverage advantages The company does not invest in large- scale projects, focusing mainly on production
The average collection period of businesses tends to increase and increase sharply in 2018 and 2019 This may cause the company to not have enough cash to serve production and business activities, thereby The company must increase short-term debt.
The total asset turnover of the enterprise is quite low, showing that the enterprise's business operations are having problems and the use of capital is not really effective The assets that businesses invest in do not really generate much revenue and do not have much incentive to bring in cash flow.
PROPOSe
Solutions to optimize inventory tunnover
First, needs analysis requires gathering information about customers and the market to understand them, which may include gathering data from surveys, customer interviews, or market research school This process helps find out the common characteristics, needs, wants and preferences of customers.
Then, based on the collected data, demand analysis helps find trends, purchasing patterns and customer groups with similar needs Thereby, businesses can discover new business opportunities, optimize existing products or services to meet customer needs
Optimize how to manage goods in the warehouse: Use warehouse management software such as ROSY ERP, WMS, GoSELL to manage inventory effectively These software can know the inventory quantity of each type of product, so it will be possible to schedule imports or proactively push items that are in stock to the market
Establish a new business model (online) in parallel with traditional business on e-commerce platforms such as Shopee, Lazada, Tiki,
Create marketing programs with incentives and promotions for customers: discounts, gifts, discounts for future purchases, points for gifts, Apply Just-in-Time (JIT) method: JIT is an inventory management method in which goods are only delivered when needed This minimizes inventory and helps increase productivity and efficiency in manufacturing and distribution operations.
Solutions to control the average collection period ratio so that the
• Apply cash discount “2/10, net 60” (customer has 60 days from the date of invoice to pay the full amount; However, the buyer can get a 2% advantage on the price if they pay invoice within 10 days) encourages customers to pay invoices early.
• Apply debt collection policy for overdue debt: Negotiate and negotiate to collect debt
In addition to sending documents, businesses can also consider conducting step-by-step negotiations with the Debtor to make their requests clearer and stronger according to the following stages:
Carry out reminders: At this stage, businesses can use communication methods such as email, text messages, and phone calls to express a peaceful, gentle, but no less resolute attitude.
Urging: After the above extension period, if the Debtor still does not make payment, the Enterprise gradually increases the frequency of reminders to emphasize the Debtor's obligation to pay while still maintaining a good faith attitude.
Implement warnings: After implementing the above stages but the Debtor still does not take any positive action, at this point the Enterprise can begin to take more severe and stronger warning measures