Report analysis of financial statements topic analysis financial statements fpt digital retail joint stock company fpt retail

VIETNAM LABOR TRADE UNION GENERAL TON DUC THANG UNIVERSITY FINANCE — BANKING ĐẠI HỌC TÔN ĐỨC THẮNG REPORT ANALYSIS OF FINANCIAL STATEMENTS Topic ANALYSIS FINANCIAL STATEMENTS FPT D

VIETNAM LABOR TRADE UNION GENERAL

TON DUC THANG UNIVERSITY

FINANCE — BANKING

ĐẠI HỌC TÔN ĐỨC THẮNG

REPORT ANALYSIS OF FINANCIAL STATEMENTS

Topic

ANALYSIS FINANCIAL STATEMENTS

FPT DIGITAL RETAIL JOINT STOCK COMPANY (FPT RETAIL)

Instructors: Ha Tuan Anh Group 6:

Nguyễn Tô Phúc Thiện - B20H0203 Mai Thuy Trang — B20H0424

Pham Anh Thu — B20H0408 Pham Hung Cuong — B20H0470

Thành phố Hồ Chí Minh, ngày 25 tháng 07 năm 2023

TEACHER’S COMMENTS

I2 10ï0250599)0/i0 651150010155 = 2

Part I: FPT RETAIL INDUSTRY OVERVIENN 00002 L1 nho 8

1 Overview Industry cece c1 112111122112 111 1115111211101 11 xe re 8 1.1 Growth rate of compamies 1n the same 1ndusfry 8 1.2 Challenges facing the retail secfor c- 2c 2 s22 +2 8 5> 9

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2, Liquity TẬHOS Q0 2201121112 212211 1115151101110 1 1181111111 k Hệ 13

3 Enterprise performance raf1O - - c c1 2211122222 1112 errvey 14 3.1 InvenfOTy fUTROVGT L2 2 1 2n 1S SH kg 2k key 14 3.2 Account receivable turnover (ARÏT) (co ccccsccccse 14 3.3 Account payable turnover (APT) 2 che 15

4 Profitability of capital ow ĩc 12.112 11221 yey 15 Part 3: Conclusions and recommenndafIOT§ St x vs cey 16 )49›9.G.5S53)16/)))/09)04V.3:)02/'ZAAađaiiŸŸI 18

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INTRODUCTION

Reason for choosing topic

Due to recent years, along with the development of society and the technology market When the industrial revolution 4.0 is taking place strongly around the world, the development

of the Technology industry is the "key" for change, contributing to the growth of the country

in many fields It can be see that the development of science and technology creates better and better information infrastructure, such as telephones, internet, etc., leading to rapidly increasing access to information of people not only in centers and cities, but also in most

localities across the country, from rural areas to mountainous areas and islands Thanks to

unlimited information sources between regions and national territories, with its multi- dimensional, fast and unlimited scale, people of all social classes, at different levels, can

access cultural values, thereby, having a rich and in-depth understanding of various fields of

social life, including culture In addition, FPT Retail is one of the most popular digital retail companies in Vietnam That is the reason, making me confidently assert that in the coming period FPT Retail will have an even stronger and stronger growth and this is also a stock worth considering for long-term goals

Structure of the report

Part 1: FPT Retail Industry Overview

Part 2: Analysis of Financial Statements

Part 3: Conclusions and recommendations

Part 1: FPT RETAIL INDUSTRY OVERVIEW

1 Overview Industry

1.1 Growth rate of companies in the same industry

140%

120% ` 118%

100% \ A.*2

Picture 1.1: ICT & CE Revenue Growth (Source: Company, SSI Research)

Picture 1.2: Number of Pharmacy Stores (Source: SSI Data)

1.2 Challenges facing the retail sector

Vietnam's competitive retail market is very large, with not only domestic enterprises but also many big-name retailers from other countries with qualitative changes Over the years, many foreign investors in the modern retail sector have exploited the Vietnamese retail

market through mergers and acquisitions and other cooperation models to maximize the market size Notably, Berli Jucker Group (BJC, Thailand) acquired the Metro Vietnam supermarket chain; Central Group (Thailand) acquired the supermarket system and Trade Center of Big C Vietnam and bought back 49% of the share capital of Nguyen Kim electronics chain Tran Anh Electronics, Citimart and Fivimart also transferred shares to Japanese investors

1.3 Policy

Ol Efficient and smart retailers

| Growing The retail market

Cl Rethinking retail spaces

2 Overview Company

2.1 General introduction

ge FPT Retail Stock code: FRT

Stock exchange: HOSE SdegsH Rewil-ogo FPT

Retail Industry: Household electrical appliances

Listing date: 26/04/2018

Authorized capital: 1,184,725,350,000

Number of listed shares: 136,242,389

Shares Outstanding: 136,242,389

FPT Digital Retail Joint Stock Company (FPT Retail) was established in 2012 in Vietnam, is an associate company of FPT Corporation, owns 2 retail chains, FPT Shop, F.Studio By FPT and a subsidiary company, FPT Long Chau Pharmaceutical Joint Stock

Company

Main lines of business: retailing computers, peripherals, software, telecommunications

equipment, pharmaceuticals, medical instruments, cosmetics in specialized stores Besides,

the chain specializes in the retail sale of mobile digital products Apple's official authorized store chain in Vietnam at the highest level, specializing in selling genuine Apple products

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2.2 SWOT

Sirens ns © Excellent staff, highly qualified

e Famous brand

Mu e Ineffective investment

e The service does not meet the needs of the customer

hs ® Development ofinformation technology

® Opportumty to penetrate the International market

SE e High level of competition

Part 2: Analysis of Financial Statements

1 Analysis of capital and assets

This index group is calculated to check the balance in the capital structure - assets of the enterprise as well as the level of financial autonomy

1.1 Situation of structural analysis and asset fluctuations

LUT Asset structure analysis

Asset Value | Weight | Value | Weight | Value | Weight

Cash and cash equivalents 702 13% 1105 10% 746 79%

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Short-term financial 788

investment 15% 1821 17% 1119 11% Short-term receivables 1498 28% 1985 18% 538 5% Inventory 1827 34% 493 5% 6484 62% Other current assets 144 3% 380 4% 440 4% LONG-TERM ASSETS 429 8% 564 5% 1197 11% Long-term receivables 116 2% 137 1% 170 2% Fixed assets 51 1% 172 2% 847 8% Real Estate Investment

Long-term unfinished assets 0 2

Long-term financial investment

Other long-term assets 262 5% 255 2% 178 2% TOTAL ASSETS 5388 100% 10786 100% | 10524 | 100%

Table 2.1: Asset Structure 2020 — 2022

According to the asset structure table, in 3 years:

+ Short-term assets always have a higher proportion than long-term assets

+ Short-term assets increase in 2021, but tend to decrease in 2022 However, long-term

assets tend to increase until 2022

=> Enterprises are focusing on long-term assets to expand business and increase scale

1.1.2 Analysis of asset fluctuations

Period 2020-2021 2021-2022 Asset AValue | %AValue | AValue “AV alue SHORT-TERM ASSETS 5264 106% -895 -9% Cash and cash equivalents 403 57% -359 -32% Short-term financial investment 1033 131% -702 -39% Short-term receivables 487 33% - 1447 -73% Inventory - 1334 -73% 5991 1215% Other current assets 236 164% 60 16% LONG-TERM ASSETS 135 31% 633 112%

Fixed assets 121 237% 675 392% Real Estate Investment 0 0

Long-term unfinished assets 0 2

Long-term financial investment 0 0

Other long-term assets -7 -3% -77 -30% TOTAL ASSETS 5398 100% -262 2%

Table 2.2: Asset Fluctuations

Period 2020 — 2021: Total assets increased to 5,398 trillion VND (100%)

- Long-term assets: Increased 135 trillion VND (31%) because fixed assets rise strongly

=> Increased Profits

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- Short-term assets: increased by 5264 trillion VND (106%) due to:

+ Inventories decreased by 1334 million billion VND (73%) => Enterprises boosted sales to recover capital and free up inventory

+ The increase in receivables, cash and cash equivalents, financial investments and other short-term assets => Enterprises have not yet recovered debts, accumulated

capital, and are occupied by customers

Period 2021 — 2022: Total assets decreased to 262 trillion VND (2%)

- Long-term assets: Increased 633 trillion VND (112%) because fixed assets of enterprises increased 675 trillion VND (392%) The main long-term investments have not changed much In 2022, have unfinished long-term assets => Increased Profits

- Short-term assets: decrease 895 trillion (9%)

=> Proving that in 2022, sales enterprises will recover capital and release inventory

+ Receivables, cash and cash equivalents, financial investments, and other short-

term assets also decreased, showing that enterprises actively collect receivables, reduce capital stagnation in the payment stage, and limit misappropriation of capital

1.2 Situation of structural analysis and capital fluctuations

1.2 1 Capital structure analysis

Capital Value Weight Value Weight Value Weight

Long-term 0% 0% 0%

liabilities

and other funds

Minority interests 0 0% 0 0% 0 0%

Table 2.3: Capital structure

In the 3-year period, 2021 is the year of the strongest increase in total capital due to an increase in short-term debt and equity By 2022, the capital decreased slightly, but this figure was not significant

1.2.2 Analysis of capital fluctuations

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Short-term debt 4945 119% -633 -7% Long-term liabilities 0 0% 0 0%

Owner’s Equity 454 37% 370 22% Funding sources and other funds 0 0% 0 0% Minority interests 0 0% 0 0%

Table 2.4: Capital Fluctuations

Period 2020- 2021: Total capital increased by 5,398 trillion VND (100%)

- Liabilities increased by VND 4,945 trillion (119%) Liabilities are mainly short-term

debt and no long-term debt, because short-term debt increases, making liabilities increase similarly — The majority of the company's capital is borrowed

- Equity and Owner's equity has increased compared to the previous year > the enterprise has more capital contributors or the owner contributes more capital

=> Delta equity is lower than delta liabilities, Executing good capital appropriation but not being financially independent from creditors, this can lead to the risk of default

Period 2021 — 2022: Total capital of the company has decreased by 262 trillion VND (2%)

- Liabilities were mainly short-term which debt decreased by 633 trillion VND (7%) due

to gradual payment with sellers and short-term loans The enterprise has reduced the capital appropriation

- Equity in this period still increased as in the previous period 370 trillion VND (22%)

2 Liquity ratios

This index group is calculated to check the debtor's ability to pay short-term debt without raising capital from outside

2.1.1 Current ratio

Year 2020 2021 2022

Short-term assets 4,96 10,222 9327

Short-term debt 4,162 9,107 8,474

Current ratio 1,192 1,122 1,101

Table 2.5: Current ratio The current ratio in 3 years is > 1 — The enterprise has the ability to pay its due

debts, low risk of bankruptcy

2.1.2 Quick ratio

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Year 2020 2021 2022

Short-term assets 4,96 10,222 9,327 Inventory 1,827 4,930 6,484 Short-term debt 4.162 9.107 8.474

Table 2.6: Quick Ratio

This coefficient usually fluctuates from 0.5-1, which is considered positive, Quick ratio

is > 1 in 3 years — The enterprise has good debt payment ability

2.1.3 Times interest earned ratio

Year 2020 2021 2022

EBT 28 554 486 Interest cost 114 132 232 TIE 1,25 5,20 3,09

Table 2.7: Times Interest Earned ratio

In 3 years, TIE > 1 => The company is operating and using loan capital effectively, controlling interest expenses and has profits from production and business activities

3 Enterprise performance ratio

Business performance indicators are calculated to assess the ability to convert

resources into cash or revenue

3.1 Inventory turnover

MWG Industr

Average

Table 2.8: Inventory Turnover

In 2020, the number of IT is low and DI is high => Business sales are not good, sales

are slow

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In 2021 and 2022, enterprises have overcome the situation of poor sales, IT index

increased and DI decreased => Goods sold out quickly (FRT's index is better than rival

company and industry average)

3.2 Account receivable turnover (ART)

MINE Industr

Account

Table 2.9: Account receivable turnover

In 2020, the ART index is 10,96 leading to the DA index up to 34 days, which means that the business needs 34 days to collect the payables In 2021-2022, ART index was higher

so DA index decreased But this index is not good compared to MWG Company and Industry

Average

=> The company has a poor collection process, a bad credit policy, the inability of its customers to pay

3.3 Account payable turnover (APT)

mủ Industry Year 2020 2021 2022 Company (2022) Average

Table 2.10: Account payable turnover

In 2021, the tumover is low, which means that the enterprise has a lot of debt, many risks in terms of solvency and the debt repayment speed is slow (0.27 times/1203 days)

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However, by 2021 and 2022, enterprises have overcome this situation, their ability to pay debts is better, and corporate finance is strong (2.92 times/172 days in 2021 and 2.90 times/122 days)

=> The Ability to pay payables is stable, equivalent to the same industry and rival companies

4 Profitability of capital flow

Calculating about: Return on Sales (ROS), Return on Assets (ROA), Return on Equity (ROE) and calculation two metrix that investors are interested in when evaluating a stock in

the market are EPS and P/E

Year 2020 2021 2022 Profit after tax 10 444 398 Net Revenue 14,661 22,495 30,166 Total average assets 5,388 10,786 10,524 Average equity 1,225 1,679 2,049 Outstanding shares (Unit: Milion) 79 79 118 Market Price 21,25 66,25 59,54

(Source: Author summarizes from the financial statements for the year 2020 - 2022) Part 3: Conclusions and recommendations

In 2020, the economic situation was significantly affected by the COVID-19

pandemic Consequently, after the pandemic subsided, the company shifted its focus towards short-term assets in 2021, only to adjust its strategy once again in 2022 During this time, FRT tended to reduce their investment in short-term assets while increasing their allocation towards long-term assets This shift indicates a strong emphasis on long-term development and investment rather than solely focusing on short-term operations post-COVID-19

Moreover, the company's capital structure underwent a transformation, with equity

increasing from VND 1,225 billion in 2020 to VND 2,049 billion in 2022 This reflects the