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UNIVERSITY OF ECONOMICS HO CHI MINH CITY

DEPARTMENT OF ADMINISTRATION

FINANCE FOR MANAGERSFINAL EXAM

FIANCIAL ANALYSIS AND VALUATION OF DXG COMPANY

TP Ho Chi Minh, June 9th 2024

Lecture: Dr Tran Duong SonID Course: 24D1MAN50213205

Student - ID: Chau Tan Qui 31221022985 Dang Dat Thanh 31221023723 Doan Cong Phat 31221023511 Tran Thi Bao Han 31221026190Class: ADC07-K48

Macroeconomic analysis of Vietnam and the world 2

1.1 Global Economy in 2024: Forecasts and Challenges 2

1.2 Vietnam's Economy in 2024: Positive Outlook but Potential Risks 3

1.3 General introduction: 7

I.Reason to choose this topic: 7

III.The role of financial report analysis in the real estate industry is multifaceted: 8

IV Analysis scope: 9

1.4 Introduce about the company 9

I.About the company: 9

II.Field of operation: 9

III.Corporate culture: 10

IV.Development strategy: 10

V.About shares and shareholders: 11

1 Listed and outstanding shares: 11

VI Structure of the corporation: 11

2 Analyze DXG's financial statements 12

3 RATIO ANALYSIS 15

3.1 Liquidity Analysis 15

3.2 Asset Management Efficiency Analysis 16

3.3 Debt management effectiveness analysis 21

3.4 Analyze profitability 24

3.5Market value analysis 31

4 Risk analysis 34

4.1 Detailed Evaluation and Comments on DOL of DXG Over the Year 34

4.2 Detailed Evaluation, Comments, Explanation, and Solutions for DFL of DXG Over the Years 36

4.3 Detailed Evaluation, Comments, Explanation, and Solutions for DTL of DXG Over the Years 38

8 REFERENCE 619 EVALUATION 63

- International Monetary Fund (IMF): 3.1%, lower than the 3.6% in 2022.

- Organisation for Economic Co-operation and Development (OECD): 2.7%.

- Tight monetary policies to curb inflation.

- Geopolitical tensions, particularly the Russia-Ukraine conflict.

- Supply chain disruptions.

- Declining consumer demand.

Investment is expected to increase slightly due to improved business sentiment andeconomic recovery.

- Volatile energy and food prices.

- Faster-than-expected tightening of monetary policies.

- Geopolitical tensions: The Russia-Ukraine conflict could escalate, negatively impactingglobal trade and investment.

- High inflation: Persistent high inflation may force central banks to tighten monetarypolicies more aggressively, leading to economic recession.

- Economic recession in the United States: A recession in the US could trigger a globaleconomic downturn.

- Pandemics: New diseases could emerge, disrupting economic activities and affectingconsumer sentiment.

The global economy in 2024 is expected to grow more slowly and face multiple risks.However, there are still some bright spots indicating potential for recovery Governmentsand central banks need to coordinate closely to mitigate risks and promote sustainableeconomic growth.

1.2 Vietnam's Economy in 2024: Positive Outlook but Potential Risks

International Organizations:

- IMF: 6.2%

- GDP Growth: 5.66%, the highest since 2020-2023.

- Increases in: Budget revenue, exports, and public investment disbursement.

- Positive performance in: Industry, agriculture, and services sectors.

- Expected to rise due to recovering demand in major economies.

- Focus on potential export markets such as the US, EU, and China.

- Global Economic Instability: Geopolitical tensions, particularly the Russia-Ukraineconflict, may negatively impact trade and investment.

- High Inflation in Major Economies: Could lead to tighter monetary policies, affectingglobal economic growth.

- Pandemics: New diseases may emerge, disrupting economic activities and consumersentiment.

- Skilled Labor Shortage: The demand for highly skilled labor is not fully met.

- Non-performing Loans: Need effective handling within the banking system.

Vietnam's economy in 2024 is forecasted to grow positively with many bright spots.However, there remain some risks that need to be addressed The Vietnamese governmentis striving to implement solutions to promote sustainable economic growth, whileensuring social welfare and environmental protection.

Vietnam Real Estate Market in Q1 2024:

According to reports from several reputable market research organizations, theVietnamese real estate market in Q1 2024 has shown positive signals compared to the endof 2023, reflected in the following indicators:

- Primary supply reached approximately 20,500 products, including 4,300 new products.

- Absorption rate was 31%, equivalent to 6,200 transactions, an increase of 8% comparedto Q4 2023 and double the same period last year.

Market Demand:

- Real housing demand remains high, especially in the affordable and mid-rangesegments.

- Interest in real estate searches has rebounded, with 62% of survey participants indicatingreadiness to buy a home if given the opportunity.

- Real estate prices continue to rise, strongest in the apartment segment.

- However, the rate of price increase tends to slow compared to previous periods.

Notable Bright Spots in Q1 2024:

- Economic Recovery: GDP and CPI in Q1 slightly decreased compared to the sameperiod but credit growth and FDI attracted in the first four months of the year indicateeconomic recovery.

- Market Sentiment: Investor and homebuyer sentiment has been more positive thanks togovernment efforts to resolve issues and support policies from enterprises.

- Real Housing Demand: The demand for housing, especially in major urban areas,remains present and increasing.

Challenges:

- Limited Supply: The supply of real estate, particularly affordable and mid-rangehousing, does not meet market demand.

- Bank Credit: Tight control over credit for the real estate sector affects market liquidity.

- Prices: High real estate prices, especially in "hot" areas, can pose challenges for middleand low-income buyers.

Overall, the Vietnamese real estate market in Q1 2024 has shown positive signals but stillfaces many challenges Experts predict the market will continue to recover in thefollowing quarters, though the growth rate may slow.

Business Performance of Real Estate Companies in Q1 2024:

According to reports from several reputable market research organizations, the businessperformance of real estate companies in Q1 2024 showed a clear division amongenterprises.

Bright Spots:

Some companies achieved impressive business results with high growth rates comparedto the same period last year This group includes:

- Novaland (NVL): Revenue increased by 15.4%, profit after tax increased by 11.8%.

- Sunshine Group: Revenue increased by 36.4%, profit after tax increased by 44.3%.

- BIM Group: Revenue increased by 45.8%, profit after tax increased by 54.6%.

- Fecon (FEC): Revenue increased by 42.3%, profit after tax increased by 58.6%.

- Tau Chin (TC9): Revenue increased by 36.9%, profit after tax increased by 42.1%.

- High real housing demand, especially in the affordable and mid-range segments.

- More positive market sentiment due to government efforts to resolve issues and supportpolicies from enterprises.

- Government incentives such as reduced interest rates for social housing loans andpayment support for commercial homebuyers.

- Bank Credit: Tight control over credit for the real estate sector affects market liquidity.

- Prices: High real estate prices, especially in "hot" areas, can pose challenges for middleand low-income buyers.

- Covid-19 Pandemic: Ongoing pandemic complications affect business activities.

The business performance of real estate companies in Q1 2024 reflects a market withmany positive signals but still harboring several challenges Experts predict the marketwill continue to recover in the coming quarters, though the growth rate may slow.

1.3 General introduction:

I.Reason to choose this topic:

In 2023, amid a global economic slowdown, inflation, though reduced, remained high,and weakened demand negatively impacted Vietnam's exports, investment, andconsumption Despite the Vietnamese government and various ministries makingsignificant efforts to enhance institutional frameworks, pass important laws, andimplement numerous policies to alleviate market difficulties, we did not achieve the GDPgrowth target 2023 marked the third consecutive year since 2020 that Vietnam failed tomeet this goal However, overall, despite the challenges, Vietnam still emerged as a brightspot in the global economy

As we enter 2024, our economy remains significantly affected, facing both prolonged andnew difficulties, including subjective and objective challenges both domestically andinternationally Nevertheless, with the concerted efforts of the political system, theachievements and experiences we have gained, along with a relatively positive newcontext, our government hopes that Vietnam's economy will overcome these difficultiesand perform better in 2024 than in 2023 This optimism is grounded in the substantialachievements accumulated through the process of renewal and integration, particularly thesolid growth foundation laid in 2023 This creates momentum for growth, fostersconfidence, and serves as a new driving force for the growth of 2024 Notably, early inthe year, the real estate market showed many positive signs of recovery after thousands ofprojects had to be suspended and numerous real estate companies dissolved or closedfrom May 2022 until the end of 2023.

Although the real estate market shows positive signs, it cannot recover quickly becausethe health of real estate companies is still weak, while policy resolutions are very slow,and new prospects are not yet clear According to Mr Đo Viet Chien, Executive VicePresident of the Association, the Vietnamese real estate market still faces manydifficulties in investment, land allocation, planning, and credit Real estate companies areunder pressure from various issues related to institutional frameworks, administrativeprocedures, difficultỉ accessing credit sources, declining sales, and increasing labor cuts.

Therefore, to help companies make the most appropriate decisions and avoid unnecessaryrisks in such a volatile economic situation, financial analysis is a crucial tool It aidsbusinesses in evaluating performance, managing risks, and making strategic businessdecisions.

Recognizing the importance of this issue, the report "Financial Analysis of Dat XanhGroup Joint Stock Company" was created to help managers gain a more accurateunderstanding of the financial situation and make informed decisions in real estatebusiness operations.

Business financial performance analysis focuses on analyzing financial statements andkey financial indicators through a system of methods, tools, and analytical techniques.This helps users from different perspectives to both comprehensively and broadlyevaluate and examine the business's financial activities in detail The goal is to identify,forecast, and make financial, funding, and investment decisions that align with theanalyst's objectives.

III.The role of financial report analysis in the real estate industry ismultifaceted:

1 Financial analysis helps investors and real estate companies evaluate the profitpotential of projects By examining financial indicators such as return oninvestment, cash flow, and profitabilitỉ, they can determine whether a project isworth investing in.

2 The real estate sector faces various risks, including market fluctuations, interestrates, and general economic conditions Financial analysis helps identify andmanage these risks, ensuring that investment decisions are made intelligently and

3 Financial analysis provides a basis for accurately valuing real estate assets This isimportant for both buyers and sellers, ensuring that transactions are conducted atfair and reasonable values.

4 Real estate companies need detailed financial planning for their projects Financialanalysis helps identify necessary capital, forecast costs and revenues, and plan forfinancing and debt repayment.

5 Financial analysis provides crucial information for strategic decision-making,including business expansion, acquisitions, or asset sales These decisions have asignificant impact on the long-term development and success of the company.

IV Analysis scope:

In this analysis, our team carefully studied and analyzed the financial reports of Dat XanhGroup Joint Stock Company (DXG) for the period from 2019 to 2023 We combined andcompared it with the financial reports of No Va Investment Group Corporation (NVL).Data is sourced from Vietstock - a comprehensive and professional portal for finance andsecurities information, updating details on all listed companies; investment channelsincluding stocks, bonds, derivatives, commodities, real estate, and other financialinvestment avenues; and providing in-depth analytical reports on stock investment daily

1.4 Introduce about the companyI.About the company:

Dat Xanh Group Joint Stock Company was established in 2003, originally as a LimitedLiabilitỉ Company specializing in real estate services and construction named Dat XanhReal Estate Service and Construction Company Its main fields include investment,construction, real estate services, and technology development Specializing in real estate,after 20 years of development, Dat Xanh Group has actively expanded the scale of the

real estate industry, creating opportunities for hundreds of thousands of familiesnationwide, contributing significantly to the transformation of Vietnam's urban landscape,qualitỉ, and appearance The company has a steadfast vision to become the leading privateeconomic real estate group in Vietnam and Southeast Asia Dat Xanh Group is consideredone of the first professional real estate businesses in the Vietnamese market.

II.Field of operation:

 Real Estate Development: Dat Xanh Group Joint Stock Company (HOSE: DXG) isa professional project developer that has invested in and developed numerouslarge-scale real estate projects in Ho Chi Minh Citỉ, Binh Duong, Dong Nai, andother locations The projects developed by Dat Xanh ensure timely constructionprogress at reasonable costs, meeting high standards for qualitỉ and aesthetics,providing the best experiences, and fostering strong trust among customer

 Real Estate Services: With a professional distribution network spanning across thecountry, the real estate services provided by Dat Xanh constitute a comprehensiveecosystem including consulting, buying, selling, brokerage, valuation, real estatemanagement and operation, financial services, and more Particularly, Dat Xanhpioneers in integrating all real estate service activities on a technological platform,providing complete and transparent project information, facilitating quick and easytransactions.

 Construction and Building Materials: With the aim of becoming one of the leadingreal estate development groups in Vietnam, Dat Xanh continuously developsinvestment activities in construction, continually updating constructiontechnologies to enhance the qualitỉ of projects and ensure construction progressaccording to commitments.

 Industrial Parks: With the goal of increasing business resources and diversifying itsactivities, Dat Xanh has been investing in expanding and developing industrialparks nationwide, with a focus on environmental friendliness and the application ofthe latest modern technologies

III. Corporate culture:

Vision: To become a global economic and financial conglomerate.Mission: Bringing prosperitỉ to customers, shareholders, and partners.Core values: Ambition - Integritỉ - Professionalism - Humanitỉ.

Orientation: Diversified ownership, diversified industries, diversified countries.Business development philosophy: Efficiency, greatness, sustainabilitỉ.

Development ideology: Rapid but sustainable growth and building a businessmodel that ensures effectiveness regardless of market fluctuations.

IV.Development strategy:

Dat Xanh's development strategy for the period 2021 - 2030 aims to diversify its activitiesacross various industries by leveraging its strengths and utilizing its existing coreoperations as a springboard to penetrate new markets beyond real estate Shifting fromsingle-product development, DXG focuses on building an ecosystem to enhance its abilitỉto serve existing customers and explore growth areas synergistic with current businessoperations With a harmonious blend of these objectives, DXG aims for robust growth toachieve a market capitalization of at least 10 billion USD by 2030.

In the real estate sector, DXG is steadfast in its goal to continue acquiring a strong marketshare nationwide with three main thrusts Firstly, it will continue expanding its

distribution network to increase its presence nationwide, especially in emerging potentialmarkets Secondly, it will vigorously deploy new business services to enhance its serviceecosystem, such as resale brokerage, financial services, asset management, valuation, andplanning information Thirdly, it will accelerate the adoption of technology.

In the construction sector, Dat Xanh aims to boost activities in three areas: infrastructureconstruction, building materials, and project development services Currently, Dat XanhE&C is considered the only entitỉ in the market providing comprehensive real estatedevelopment services, including project legalities, financial solutions, planning, design,construction, sales, and after-sales services for investors.

In the financial sector, DXG targets to connect and provide financial solutions forhomebuyers, domestic investors to raise capital for projects, as well as investors bothdomestically and internationally looking to invest in the Vietnamese real estate market.This area will help Dat Xanh Group optimize financial benefits and investments for allparticipants in its ecosystem, serving as a driving force for DXG's strong development.The technology sector is established to research and apply modern technologies such asAI/Machine learning, blockchain into business operations, especially in real estate totransform traditional business models into technology-based ones.

Thus, Dat Xanh's new strategy demonstrates ambitious vision, strategic foresight, alongwith fundamental solutions from its leadership to continue superior development, aimingfor remarkable achievements on the journey to billions in the next decade.

V.About shares and shareholders:1 Listed and outstanding shares:

Listing Date: 22/12/2009

Initial Listing Price: 48,000 VND

First Listed Volume: 8,000,000 shares Listed Shares: 722,450,921 shares

Shares outstanding: 720,703,435 shares

2 Shareholder structure:

State Ownership: 0,00%Foreign Ownership: 20,03%

Other Ownership: 79,97%

VI Structure of the corporation:

In recent years, Dat Xanh Group has continuously developed and expanded its operationalscale, with many subsidiary companies and representative offices in provinces and citiesacross the country The organizational structure of Dat Xanh Group is scientificallydesigned, rational, ensuring the efficient operation of the Group The entities involved incorporate governance include: Shareholders' General Meeting, Board of Directors, AuditCommittee, and Management Board.

2 Analyze DXG's financial statements

Company financial statements (mainly analyzing Q1 2024 compared to 2023)

Analysis of business results in the first quarter of 2023 and the first quarter of 2024

inancial Report Analysis: Q1 2024 vs Q1 2023

Based on the provided data:

- Q1 2024: VND 1,065.00 billion

- Q1 2023: VND 426.00 billion

- Increase: VND 619.00 billion, a growth rate of 58.1%

After accounting for deductions, the net revenue for Q1 2024 increased by VND 687.00billion, a 64.5% increase compared to Q1 2023:

- Net Revenue Q1 2024: VND 1,065.00 billion

- Net Revenue Q1 2023: VND 378.00 billion

Gross Profit:

- Q1 2024: VND 472.00 billion, accounting for 44.3% of revenue

- Q1 2023: VND 166.00 billion, accounting for 43.9% of revenue

Revenue Analysis:

- Revenue Growth: The company’s revenue increased by VND 619.00 billion, a 58.1%rise, highlighting successful sales and market expansion.

- Net Revenue Growth: After deductions, the net revenue increased by VND 687.00billion, reflecting a robust growth rate of 64.5% This substantial growth suggestseffective revenue generation strategies.

Profitability Analysis:

- Gross Profit Increase: The gross profit increased by 64.8%, from VND 166.00 billion inQ1 2023 to VND 472.00 billion in Q1 2024 This indicates effective cost managementand increased sales volume.

- Gross Profit Margin: The gross profit margin slightly increased by 0.4%, showing stableprofitability relative to revenue.

Operating and Pre-Tax Profit Analysis:

- Operating Profit: Q1 2024 saw an operating profit of VND 137.00 billion, compared to aloss of VND 139.00 billion in Q1 2023 This significant turnaround of VND 276.00billion highlights improved operational efficiency and cost control.

- Pre-Tax Profit: The pre-tax profit in Q1 2024 was VND 133.00 billion, compared to aloss of VND 96.00 billion in Q1 2023 This represents an improvement of VND 229.00billion, indicating better overall financial health and profitability.

Conclusion:

The financial results for Q1 2024 indicate a notable improvement in both revenue andprofit margins compared to Q1 2023 The increase in gross profit and the shift fromoperating and pre-tax losses to significant profits demonstrate that the business operationsof Dat Xanh Group Joint Stock Company are performing better than in the same period

last year These results suggest a positive shift in the company’s business environmentand potentially improved economic conditions.

3 RATIO ANALYSIS3.1 Liquidity Analysis

Liquidity Analysis

As seen in Table 1, the current ratio (CR) of Dat Xanh Company has remained relativelystable from 2019 to 2023 Over the years, the CR has consistently been greater than one,ranging from 1.91 to 2.35, indicating a high level of financial security The CR istypically determined by dividing total current assets by total current liabilities, i.e., theratio of current assets to current liabilities

However, inventory is the least liquid asset and often constitutes a significant portion ofcurrent assets Given that Dat Xanh operates in the real estate sector, it is understandablethat inventory makes up a large part of its current assets: 40% in 2019, 52% in 2020, 44%in 2021, 51% in 2022, and 54% in 2023 This asset type can somewhat distort the CR,making it not entirely reflective of the company's actual financial situation To assess theability to cover short-term debts more accurately, the quick ratio (QR) is used.

Dat Xanh's QR has consistently remained stable, always above 0.92 Over the years, theonly time the QR fell below 1 was in 2020, but it was not by a significant margin Thisindicates that the company has a very low risk of being unable to meet its short-termliabilities.

In contrast, the financial situation of its competitor, Novaland, is quite poor Novaland'sQR has been very low, peaking in 2021 at 0.93, which is nearly equivalent to Dat Xanh'slowest QR in 2020 (0.92) This shows that Novaland's short-term financial risk is high,particularly as the company's QR has been trending downward from 2021 to 2023.

3.2 Asset Management Efficiency Analysis

Based on Table 2, we can see that the company's inventory turnover ratio has fluctuatedunevenly over the years In 2022 and 2023, this ratio showed a sharp decline, indicating a

negative trend in the company's financial situation The inventory turnover ratio isdetermined by dividing sales revenue by the value of inventory This index indicates howmany times the inventory is sold out within a year To analyze the increase/decreasefluctuations of the inventory turnover ratio in more detail, we need to examine theincrease/decrease fluctuations in the value of inventory and revenue over the years:

To analyze the increase/decrease fluctuations of the inventory turnover ratio in moredetail, we need to examine the fluctuations in the value of inventory and sales revenueover the years:

For inventory, the company has managed it well after a sharp increase in 2020 due to theCovid-19 pandemic, which nearly halted the real estate market, especially in the resortreal estate segment - the company's main sector In 2023, the company effectivelycontrolled its inventory, and the inventory value seemed stable Regarding Novaland, wecan see that the company's inventory turnover ratio is significantly higher compared to itscompetitor When comparing the inventory value with Dat Xanh company over the years,Novaland's inventory value is 8.42 to 9.83 times higher than that of its competitor.

Because any product being built is an item that uses Novaland's large existing inventory.In addition, Novaland also uses inventory of copper knitwear as collateral to accept loans.When looking at sales, we see:

Both companies reached their peak sales in 2021 However, in 2022 and 2023, bothbusinesses experienced a significant decline in sales When considering the sales scale,NVL's sales were only 1.28 to 2.02 times higher than those of its competitor over theyears.

In summary, Dat Xanh has managed its inventory issues significantly better compared toits competitor This reflects a more optimistic financial situation for the company Despitethe decline in sales in 2022 and 2023, the company's inventory remained stable.

Regarding Days Sales Outstanding (DSO), we see uneven fluctuations over the years.DSO measures the average number of days needed to collect payment from sales.Notably, in 2021, when the company experienced a significant sales growth of 249.10%

compared to the same period in 2020, the company's accounts receivable only grew by49.67%.

A notable point is that in 2022, the company's accounts receivable only grew by 10.67%,which is much lower compared to Novaland's accounts receivable growth rate Thisindicates that the company managed its receivables well in 2022 In 2023, the company'sDSO increased significantly because 2023 was a gloomy year for the real estate sector.The DSO rose by 1.4 times compared to the same period in 2022, largely impacted bydeclining sales.

In contrast to Dat Xanh, Novaland did not manage its receivables as effectively Both DatXanh and Novaland reached their peak sales in 2021 While Dat Xanh's receivablesincreased by only 49.67%, Novaland's increased by 91.40%, despite sales growth of only185.52% Novaland's DSO in 2023 increased significantly compared to the same period in2022 For Dat Xanh, this was mainly due to declining sales, whereas for Novaland, it wasalso due to the continuous increase in receivables from 2019 to 2022 This could beattributed to Novaland undergoing debt restructuring, which may have affected its abilityto collect receivables A high DSO can lead to an increase in bad debts, negativelyimpacting Novaland's operations.

Below is a chart showing the DSO ratios of the two companies from 2019 to 2023:

10.67%, which is much lower compared to Novaland's accounts receivable growth rate.This indicates that the company managed its receivables well in 2022 In 2023, thecompany's DSO increased significantly because 2023 was a gloomy year for the realestate sector The DSO rose by 1.4 times compared to the same period in 2022, largelyimpacted by declining sales.

In contrast to Dat Xanh, Novaland did not manage its receivables as effectively Both DatXanh and Novaland reached their peak sales in 2021 While Dat Xanh's receivablesincreased by only 49.67%, Novaland's increased by 91.40%, despite sales growth of only185.52% Novaland's DSO in 2023 increased significantly compared to the same period in2022 For Dat Xanh, this was mainly due to declining sales, whereas for Novaland, it wasalso due to the continuous increase in receivables from 2019 to 2022 This could beattributed to Novaland undergoing debt restructuring, which may have affected its abilityto collect receivables A high DSO can lead to an increase in bad debts, negativelyimpacting Novaland's operations.

Below is a chart showing the DSO ratios of the two companies from 2019 to 2023:

The fixed asset turnover ratio evaluates the efficiency in using fixed assets in generatingrevenue Looking at the situation of Dat Xanh company, we see:

The ratio fluctuated significantly in 2021, mainly due to changes in sales From 2022onwards, the ratio showed a downward trend In 2022 and 2023, the company's fixedassets did not change much, so the Fixed Asset Turnover Ratio was primarily impacted bychanges in sales.

For Novaland, aside from being affected by sales fluctuations as previously analyzed, adetailed evaluation of the changes in fixed assets shows that the company's fixed assetsgrew continuously from 2020 to 2022 Notably, Novaland experienced a record increasein 2022 (173.02%) This was because Novaland expanded its land bank for several majorprojects during this period, such as Aqua City Urban Area (Dong Nai), NovaWorld HoTram Urban Area (Ba Ria - Vung Tau), and NovaHills Urban Area (Dong Nai)

This growth is a positive sign if it is accompanied by an increase in equity However, it isalso risky if fixed assets are financed through debt Below is a chart showing the changesin the Fixed Asset Turnover Ratio of the two companies:

The asset turnover ratio evaluates the effectiveness of using total assets to generaterevenue We see that over the years, the asset turnover ratio of Dat Xanh company alwaysfluctuates in the same direction as the fluctuation of revenue and is always higher thanNovaland company, because the total asset scale of the company is significantly lowerthan its competitor This shows that Dat Xanh has exploited and used its assets to generaterevenue more effectively than its industry competitors.

3.3 Debt management effectiveness analysis

The debt ratio measures the proportion of capital provided by short-term and long-termdebt It is also an indicator measuring the financial risk of a business The higher the debtratio, the greater the risk of bankruptcy for the business The debt ratio of Dat Xanh hasnot fluctuated significantly, with a tendency to increase in 2020 and decrease sharply in2021 In 2022, due to the significant growth in undistributed after-tax profit in 2021(317.36%), it is likely that the company has used it for reinvestment, which hascontributed to the decrease in the debt ratio in 2022 and 2023 Overall, Dat Xanh has hadproper debt management strategies, although the company’s sales have declined sharplyin 2022 and 2023, the debt ratio is generally stable, without any significant increase.

As for Novaland, the risk of default is much higher when compared with Dat Xanh, withthe debt ratio continuously increasing strongly over the years 2020, 2021, and 2022 Thiscould be the main reason leading to the event on October 31, 2022, which will be

mentioned in the market value analysis section So, Novaland has financed fixed assetswith debts Because tourism real estate is Novaland’s spearhead investment field.However, in 2020, the Covid-19 pandemic has caused the real estate market to almostfreeze, especially tourism and resort real estate, posing a big challenge to Novaland.Another reason during this period is that the company’s projects face legal risks and morenotably, the level of risk of Novaland is quite high compared to other businesses in thesame industry because it owns a large land fund, which is related to many complicatedlegal procedures, so it is difficult to attract capital from investors For both of the abovereasons, the company seems to have no other way to continue operating other thanproviding capital from debts.

The debt-to-equity ratio provides a clearer reflection of the financial situation of the twocompanies This ratio also shows a clear contrast in the level of risk of Novaland whencompared with Dat Xanh.

For Dat Xanh company, except for a slight increase in 2020 due to the company’sfinancial difficulties caused by the pandemic, the debt-to-equity ratio of the company hasbeen almost stable at a safe level since 2021 As for Novaland, this ratio is not onlyalways higher than its competitor but also continuously increased strongly for threeconsecutive years from 2020 to 2022 We see that Dat Xanh has more difficulty in payinginterest than its competitor when considering the Times-interest-earned (TIE) TIE isinfluenced by EBIT and interest expenses Notably, in 2020 and 2021, the company’sinterest expenses continuously increased, the reason could be from the state bank’s tightmonetary policy to control inflation during this period At the same time, the companyimplemented many large projects such as Vinhomes Grand Park Urban Area (Thủ ĐứcCity), causing the demand for investment capital to increase strongly and the business inthis period had difficulty in sales, so the company’s short-term debt increased by 33.55%in 2020.

The core reason comes from the company’s debt structure, we see that short-term debtalways occupies a large proportion in the company’s debt structure This helps thecompany to control the debt situation well, but the downside is that the interest rate forshort-term loans is usually higher than long-term loans that have a loan period of manyyears When comparing the debt structure of the two companies, we see a clear difference.

Short-term debt always accounts for more than two-thirds of the company’s total debtstructure As for Novaland, it always accounts for less than 50% of total debt, with thehighest level in 2023 being 44.49% From 2022 onwards, Dat Xanh has effectivelycontrolled the company’s financial situation as the interest expense has not fluctuatedsignificantly, and the proportion of short-term debt in the company’s debt structure hasdecreased and maintained at a stable level The Times-interest-earned (TIE) during thisperiod is mainly affected by EBIT, fluctuating according to the company’s businessoperations As for Novaland, the TIE ratio is always at a safe level, regarding thecompany’s interest expense, except for a strong increase in 2022, it always tends todecrease sharply over the years By 2023, Novaland’s interest expense has significantlydecreased Because in 2023, Novaland reduced more than 7,000 billion VND in loanscompared to 2022, unanimously agreed on a restructuring plan related to convertiblebonds with a total value of 300 million USD, the total value of extending domestic bondprincipal payments is over 9,200 billion VND.

3.4 Analyze profitability

The Basic-Earning-Power (BEP) ratio measures the ability to generate profits from acompany’s business operations Since EBIT does not include interest expenses and taxes,the BEP ratio gives us an overview of the profitability from the company’s business

operations In 2020 and 2021, in addition to being affected by the company’s businessoperations, EBIT was significantly impacted by income from financial activities Theincome from financial activities of Dat Xanh also fluctuated quite strongly over the years,specifically: 2020: decreased by 73%; 2021: increased by 383.56%; 2022: increased by31.45%; 2023: decreased by 11.85% Especially, during the period 2020 - 2022, alongwith revenue from business operations, the income from the company’s financialactivities continuously increased Particularly in 2021, the company’s financial incomehad a breakthrough growth, typically in this year, Dat Xanh transferred all nearly 250million shares (99.99%) held at Hoi An Invest to Ha An with a value of 2,500 billionVND.

A notable point in 2020 is that while Novaland’s business revenue decreased by 52.04%,the company’s EBIT only decreased by 3.75% The reason is that in 2020, the company’sfinancial income in the same period increased five times (504.67%) compared to 2019.This came from the company divesting its subsidiaries, reaching 3,357 billion VND.Specifically, during the year, Novaland completed the sale of all contributed capital atPhong Dien Real Estate Investment JSC; Phu Dinh Port JSC; Phu Tri Real EstateInvestment and Trading JSC; Nova Nippon LLC and Sun City Real Estate Developmentand Investment LLC In 2021, Novaland’s business revenue increased strongly, so thecompany’s EBIT was almost stable while business revenue fluctuated strongly in 2020and 2021 From 2022 onwards, Novaland’s EBIT changes in the same direction asbusiness revenue.

Based on the chart, we see that in 2020 and 2021, the Basic-Earning-Power (BEP) ratio ofDat Xanh fluctuated quite strongly while that of its competitor was almost stable.

Regarding the Net-Profit-Margin (NPM) ratio, we see that Dat Xanh is not as promisingas its competitor, which could be due to many reasons To analyze in more detail, we needto use two additional ratios: Gross-Profit-Margin (GPM) and Operating-Profit-Margin(OPM).

The Operating-Profit-Margin (OPM) measures the dollars of EBIT generated per dollar ofrevenue The operating profit margin identifies how a company is performing with respectto its operations before the impact of interest expenses is considered We see that theOPM ratio of Dat Xanh company, over the years, is mainly affected by the company’soperating situation.

As for the Gross-Profit-Margin (GPM) ratio, we see that it is almost stable over the years.Because GPM determines the gross profit on each dollar of revenue before deducting anyother costs This shows that Dat Xanh has controlled the operating costs much better thanits industry competitors.

Similar to the total asset turnover ratio, but to evaluate the effectiveness of using assets togenerate revenue, the Return-on-Total-Assets (ROA) ratio gives us an overview of how acompany uses its assets to generate net income In other words, ROA is an importantmeasure to evaluate a company’s profitability It represents the company’s net income asa percentage of total assets The lower the ROA, the more assets the company uses togenerate profit.

We see that the net income of Dat Xanh company fluctuated quite strongly in the period2020-2022 This is due to the strong fluctuation of EBIT due to the unstable business

situation of the company and the company’s interest expense also continuously increasedin 2020 and 2021 As for Novaland company, the company’s financial situation is gettingworse day by day, the company’s net income continuously decreases because the Debt-to-Equity ratio is increasingly strong and over the years, the debt ratio on the company’stotal assets is always at a high level (from 73% upwards) and tends to increase each yearfrom 2020 to 2022 And net income is generated from the owner’s capital, so thecompany’s net income tends to decrease sharply.

In addition to being affected by the increase and decrease in net income, Assets (ROA) is also affected by the asset situation of both companies One of the mostimportant ratios in this group is the Return-on-Common-Equity (ROE) ROE, along withthe Dupont analysis model, gives us the most comprehensive view of the entire internalfinancial operations of each business on the market ROE implies how much income theowner will earn when one dollar of the company’s total assets operates We see that theequity multiplier is quite different from the other ratios and the ratios of both companiesin 2019 are positive, so to facilitate the visualization of the fluctuation trend of each ratioin the Dupont model over the years from 2020 to 2023, we divide the ROA, ROE, NPM,

Return-on-Total-equity multiplier ratios of 2020, 2021, 2022, and 2023 by the corresponding ratios of2019.

We get the following chart:

ed on the chart, we see that the company has well controlled its debts, making the equitymultiplier stable over the years, so the Return-on-Equity (ROE) almost accurately reflectsthe company’s profitability in reality This also shows that the company’s risk is always atan acceptable level, facilitating capital mobilization from investors.

Same for Novaland:

Based on the preliminary assessment, the Return-on-Equity (ROE) of Novaland is alwayshigher than Dat Xanh over the years However, the Dupont model provides acomprehensive view The company’s ROE is always pushed up by the equity multiplier.The company’s equity multiplier is not only high but also continuously increasingbecause the equity multiplier is directly affected by the company’s Debt-to-Equity ratio The risk of investing in this company is very high.