analysis offinancial statement

In 2017, Vietjet debuted on theHo Chi Minh City Stock Exchangewith a market capitalisation of$1.4 billion.. Besides, net profit aftertax dropped sharply from VND3.8 thousand billion to V

F I N A N C I A L

M A N A G E M E N T

FINANCIAL STATEMENT

Members:

Phạm Kim Anh K204041261 Trần Thị Thanh Vân K204041256 Bùi Tuyết Anh K204041225 Trương Tùng Lâm K204041231 Ngô Gia Thiện K204041248

GROUP 5

Lecturer: Hồ Thị Hồng Minh

PAGE 1

HISTORY AND DEVELOPMENT

Obtained an Air OperatorCertificate No

01/0103018458 andVietjetAir is the firstVietnamese private carrierlicensed to fly domesticand international routes.Launched the first

commercial flight from

Ho Chi Minh City to Ha

international route from

Ho Chi Minh City toBangkok (Thailand) on 10February

Stock Exchange (HOSE)Signed an agreement

to open a non-stop

route between

Vietnam and Sydney,

100 million domestic andinternational passengersVietjet has been

recognised as the <Best

low-cost carrier of the

year= and the <Best belly

carrier of the year= for

its outstanding cargo

transport in 2020 by

Payload Asia

2007 2011

2013 2014

2017

2018

2019 2020

PAGE 3

BOARD OF DIRECTORS

Madam Nguyễn Thị Phương Thảo is the

founder from 2002 She was appointed

Vice-Chairwoman of the Board of

Directors in 2007 She is also the

Company’s Chief Executive Officer

(<CEO=)

Madam Nguyễn Thanh Hà is One of the

founder and was appointed

Chairwoman of the Company’s Board

in 2007, She has extensive experience

in the aviation industry in Vietnam

Dr Nguyễn Thanh Hùng has been

appointed Vice Chairman of the Board

of Directors since July 2007

Mr Đinh Việt Phương has been the

Permanent Vice President, Managing

Director

Mr Lưu Đức Khánh was appointedmember of the Board of Directors fromApril 2011 Mr Khánh is an expert in thefinancial sector with more than 20years of experience in seniormanagement roles

Mr Chu Việt Cường has been a director

of the Board since 2011 He is also theChairman of the Insurance Committee

of the Company Mr Cường is the ChiefOperation Officer of Sovico Holdingand a director of the Board of HD Bank

Mr Donal Boylan - founding Partner ofBCAP He returned to HNA Group inearly 2017, as Vice Chairman of publiclylisted Bohai Capital Holdings, China’slargest independent equipment lessorand CEO of its Hong Kong subsidiary

To become a global airline

group with an extensive

regional and worldwide flight

network, providing not only

airline services but also

consumer services across

advanced

e-commerce platforms; a

trusted and highly prestigious

brand in the eyes of travelers

all over the world

To continuously expand our flight network nationally, regionally and globally

To bring innovation to airline services

To make air travel the most popular form of transportation for Vietnamese and all people around the world

To bring happiness and satisfaction to our customers by offering outstanding services, always with a friendly smile.

EDUCATION AND TRAININGFor pilots

For techicians Others

DIRECT SUPPORTING SERVICES/OTHERGround operation services Technical support andmaintenance services

Fuel provision Spare parts supply services

BUSINESSCatering services Machine/aircraft Ticket agency AdvertisingRetail Restaurants

BUSINESS ACTIVITIES

PASSENGER AIR TRANSPORT Promotion/tourism

Road transport/other Freight transport

CONSTRUCTIONReal estates Operation Leasing

In 2017, Vietjet debuted on the

Ho Chi Minh City Stock Exchange

with a market capitalisation of

$1.4 billion The next year,

Vietjet transported 23 million

passengers, accounting for 46

percent of Vietnam’s passenger

market While that’s about half

of the 44 million passengers that

AirAsia, Asia’s leading budget

carrier, carried last year, Vietjet

has been growing faster than the

Malaysian budget carrier

Vietjet’s revenue climbed 27

percent to 54 trillion dong ($2.3

billion) in 2018, while AirAsia’s

revenue rose 9 percent to 10.6

billion ringgit ($2.5 billion) This

year, Vietjet expects to grow

even faster, projecting it will

carry 30 million passengers, up

30 percent from last year <We

positioned Vietjet as a regional

and international carrier from

the very beginning,= says Thao,

49 The two airlines have an

That figure makes AirAsia’s3.1 cents per ASK look flabby.Vietjet aims to squeeze evenmore people into its new,narrow-body Airbus A321neoairplanes When the firstA321neo arrives in November,

it will have 240 seats Mostairlines outfit the A321neowith no more than 180

PAGE 7

Vietnam has emerged as one of the world’s fastest growingmarkets

VietJet has quickly captured significant market share

Low unit costs

Ancillary revenues, which are a key component for mostsuccessful LCCs, have also helped VietJet achieve profitability at

an early stage

Ancillaries now account for over 23% of VietJet’s revenues Asmall number of LCCs rely on ancillaries for more than 30% oftotal revenues, but 23% is a very respectable showing for arelatively new airline, particularly in Asia, where ancillaries aretypically lower

Weaknesses

From an early stage Vietjet discussed with potential JVpartners the establishment of LCCs in other Asian

markets However, several potential JVs failed to

materialise, and the only JV it has so far forged (in

Thailand) has encountered multiple setbacks ProductInsurance Costs are Raising

Low fares and poor yield management

Weak brand and distribution outside Vietnam

Vietnam's geographical location is very convenient for

transporting passengers from Southeast Asia to NortheastAsia

Vietnam is a developing country, so low-cost airlines arechosen by many people and are more willing to pay

Currently, the airline has regular flights to Korea, Taiwan,Malaysia, Thailand and Cambodia,.China is the largest

source of tourists and the fastest growing

Threats

The competitive environment in the aviation industry isincreasingly fierce

Many low-cost airlines also see the potential of our

country's market and are eager to jump in

Airport overload makes it difficult to open more flight

routes as well as flight frequency

VietJet could struggle to place the nearly 200 aircraft it has

on order, given the infrastructure constraints

Opportunities

PAGE 9

Viet jet has j ust a nnou nced its b usin ess r esul ts fo r th e

four th q uarte r of 2021 For the whol e yea r, t his c ompa ny ha s

accu mula ted r evenu e of near ly 1 3,000 bill ion VND, prof it

afte r ta x rea ched 100 billi on V ND, u p 46% com pared to 2020.

In t he f ield of ai r tr anspo rtat ion, in th e pa st ye ar, the

airl ine has t ransf erre d mor e th an 5 4 mil lion cust omer s In

part icul ar, f reigh t tr anspo rtat ion i ncrea sed by mo re t han

200% , re achin g the rev enue thre shold of n earl y 3,0 00 b illio n

VND.

In D ecemb er 2 021, Viet jet r ecei ved t he fi rst wide A330

airc raft , mar king the airli ne's prep arati on t o ent er t he

comp etit ion o f lon g-di stanc e in terna tiona l ba ys, s uch as

conn ecti ng Vi etnam wit h Aus tral ia an d Eur ope.

In 2 022, alon g wit h th e com plet e ope ning of i ntern atio nal

rout es, espec ially the deve lopm ent o f tou rist reso rts and

reso rts acros s the cou ntry, Vie tnam' s avi atio n ind ustr y is

expe cted to r ecove r so on.

Previously, after many years of strong development and continuous growth, in the early part of 2020, the company reported a loss due to the impact of the COVID-19 epidemic.

However, in the last quarters of

2020, Vietjet's financial statements showed significant improvement and

by the end of the year the airline was profitable Vietjet's profitable

business numbers continue to be maintained into 2021.

Meanwhile, so far, other airlines have not announced their business

situation in 2021, but many forecasts are made with negative results, because last year domestic routes were still affected by the COVID-19 epidemic much heavier than before Therefore, if airlines do not have financial activities and assets, it will

be difficult to make a profit, because basic air transport activities have plummeted

PAGE 11

Balance Sheet

In regard to assets, the figure foraccounts receivable short-term was thehighest during the 3-year period It can

be seen that it decreased from 45,03% to34,29% between 2019-2021 Moreovers,accounts receivable - long term decreasedslightly from 30,64% to 28,7% in 2020 and rose

to 32,7% in 2021 The item that dropped themost was Other Current Assets with 446 billionVND (0.91%) in 2019 and just over 66 billionVND (0.13%) in 2 years after

According to the pie chart, long-term debt and retained income both account for a high proportion in resources Long-term debt accounts for the highest proportion over the years The second highest

weighting item in the resources segment is retained profits with a year ratio from 17% to 22% The item that dropped the most was

3-other long-term payables with 70 billion dong (2.8%) in 2019 and just over 50 billion dong (2%) in the following 2 years.

LIABILITIES in 2021

LIABILITIES in 2020

LIABILITIES in 2019

PAGE 13

Additionally, the figure ofaccounting profit before taxalso declined from VND 4.5thousand billion to VND 180billion over the period of 3years Besides, net profit aftertax dropped sharply from VND3.8 thousand billion to VND 68billion between 2019-2020 androse marginally by VND 11billion in the final year.

The bar chart illustrates different 4

significant data of income statement

from year 2019 to 2021 It is divided

into 4 groups, namely: net revenue, net

operating profit, accounting profit

before tax, net profit after tax It is

clear that the biggest number is net

revenue Net revenue in 2019 was VND

50,6 thousand billion and it was known

as the largest figure of the chart

However, that figure

decreased dramatically to

VND 18.2 thousand billion in

2020 and reached at VND 12,8

thousand billion in 2021 It

can be seen from the chart,

net operating profit went

down from VND 3,8 thousand

CASH FLOW STATEMENT

Ther e wa s a f luctu atio n in

cash flo ws in 3 ye ars In 2 019.

net cash flow s fro m in vesti ng

and fina ncing acti viti es

reco rded a lo ss of VND thre e

thou sand one hundr ed b illio n

and VND 4 tho usand bil lion

whil e op erati ng ac tivi ties had

a lo ss o f VND 2 th ousa nd

bill ion Duri ng th e ne xt ye ar.

Net cash flow s fro m op erati ng

acti viti es re duced pro fit b y

VND 3,2 thous and billi on A t

the same time , inv esti ng

acti viti es we re be tter with

VND 1.1 thous and billi on pr ofit

In 202 1, ne t cas h fl ows f rom

oper atin g and fina ncin g

cont inue to r ecord neg ative

grow th (V ND 6 55 t hous and

bill ion and V ND 6 4 th ousan d

bill ion) Ov eral l, th e net cas h

flow of Vietj et de clin ed

PAGE 16

ANALYSIS

LIQUIDITY RATIOS

PAGE 18

The table and bar chart shows that the inventory turnover ratio

in 2021 was at 15.87x, a decrease of 9.42x compared to 2020 and 51.79 compared to 2019, it means that Vietjet provided fewer services and possibly excess inventory, which shows that the firm was selling slower than before It was noticeable that the figure for days sales outstanding in 2021 outnumbered that of days sales outstanding in 2020 (1138,25 days and 678,42 days, respectively).

In other words, customers paid the bills more and more slowly since 2019 Regarding total asset turnover, it reduces from 1,4x in

2019 to 0,25x in 2021 Because this rate dropped down to 0,25x, the company needed to enhance its solution to make the

operation more efficient

Asset management ratios

P A G E 2 0

T O T A L D E B T T O T O T A L C A P I T A L

The tabl e and the bar chart ill ustra te Th e ta ble a nd t he ba r char t il lustr ate t he t rend of t otal debt to t otal capi tal i n a peri od o f 3 y ears 2019 -2021 St artin g at 60,6 3%, t he r atio

incr ease d and Hit t he h ighes t po int 6 1,21% in 2021 In this year, the comp any f aced the riski est year with the highe st d ebt-t o- capi tal ratio Thi s is beca use a hig her r atio , the mor e the

comp any is fu nded by d ebt t han equit y, wh ich means a h igher liab ilit y to repay the debt and a gr eater ris k of forf eitur e on the loan if the d ebt c anno t be paid time ly

In 2019, Vietjet Air had a high times interest earned (TIE) ratio at 14,0x But it decreased dramatically in the two following years, to 1,54 and bottomed at 0,78x in 2021 The formula for a company's TIE number is earnings before interest and taxes (EBIT) divided by the total interest payable on bonds and other debt Therefore, this low ratio indicated that the company is less dependent on debt with a low liability to repay the debt and a lower risk of forfeiture

on the loan This ratio illustrates that the company had the ability

to repay the loan timely in spite of the effect of the Covid19 pandemic.

TIE RATIO

The profitablity ratios tend to decrease in the period from 2019 to

2020 and have an slightly upward trend in 2021 The operation margin has a dramatic loss it means that a serious drop in corporate profits Regarding return on total assets (ROA), it decreased gradually from 7,79% in 2019 to 0,15% in 2020 and stay unchanged in 2021 Return on common equity has a downward trend in 3 years, in 2020 this ratio peaked at the lowest point of 0,46%

PAGE 22

The P/E and P/B of Vietjet Air are considered to stay at a high level throughout the period Starting at 20,57x in 2019, the P/E ratio rose significantly to 920,86x in 2021 The highest P/E ratio was in 2020, which is at 954,20x In terms of the P/B ratio, it also meets a high point at 5,26x in 2019 In the following years, the ratio Dramatically decrease at 4,37 in 2020 and 4,36 in 2021 Vietjet has a high P/B and P/E ratio in general This shows that the market anticipates very great future business opportunities As a result, investors are willing to pay more for Vietjet shares.

Profitability ratios and

Maket value ratios

In general, during 3 years the profit margin of Vietjet had a

significant decline from 7,52 % to 0.62% because of the profitability rate of low net sales The Return on Equity (ROE) plummeted from 25,55% to 0.47 % in only 3 years Moreover, there was also a

dramatically decrease in total asset turnover in 2019 and 2020 and slightly fallen in 2021, at 0,25x, which indicated that Vietjet was

facing interest expense difficulties On the other hand, the index that increases the ROE was that the equity multiplier raised 3,02x in

2020 to 3,06 in 2021.

A significant drop in earnings has had a negative impact on corporate performance measures As a result, the company should focus on increasing net profit by cutting costs, enhancing business activities to increase revenue, and charging fees for services like refunds,

cancellations, change of flight date and time, connection, and change of flight ticket information in order to increase profitability and efficiency

in the use of equity Vietjet also needs to boost total asset turnover by growing net sales and effectively completing revenue activities.

THE DUPONT EQUATION

BETA COEFFICIENT

The beta is a measure of the systemic risk of a

stock or an entire portfolio, and beta is a

measurement of its volatility of returns relative

to the entire market A company with a higher

beta has greater risk and also greater expected

returns Vietjet Air has a Beta of 0.26 which

means the company is less volatile to the

market A lot of the data shows that the stocks

of VJC moved up or down with the market.

Stock of VJC, which has =0.26, is exactly as β

volatile as the market.

P A G E 2 4