Phân tích báo cáo tài chính công ty cổ phần bánh kẹo hải hà

Foreign Trade University Financial Statements Analysis Hai Ha Confessionary Joint Stock Company Group member: 1. Tran Thi Hong Phuong (leader) 2. Doan Phuong Thao 3. Luong Thu Thuy 4. Pham Thi Ngoc Thao 5. Nguyen Manh Thi 6. Bui Linh Chi 7. Le Duc Binh Class: A3 – High Quality class – Faculty of Finance and Banking Batch: 48 HAIHA CONFESTIONARY JOINT STOCK COMPANY Table of Contents Table of Contents 2 A.Overview 3 I.General information 3 II.SWOT Analysis 5 III. Macroeconomics and Industry Analysis 6 1.Macroeconomics analysis 6 2.Industry Analyses 8 B.Analysis 10 I.Horizontal analysis 10 1.Balance sheet analysis 10 2.Income statement analysis 15 II.Vertical analysis 17 1.Balance sheet analysis 17 2.Income statement analysis 19 2.Activity ratios 24 3.Debt management ratios 25 4.Profitability ratios 27 IV.DuPont analysis 32 C.Conclusion 35 I.Financial position & performance 35 II.Risk 35 III.Prospect 35 IV.Recommendations: 36 References: 37 2 HAIHA CONFESTIONARY JOINT STOCK COMPANY HAIHA CONFESTIONARY JOINT STOCK COMPANY A. Overview I. General information Name: Hai Ha Confectionery Joint Stock Company Abbreviation: HAIHACO Stock Code: HHC Listed Date: November 20 th , 2007 Chartered Capital: In January 2011, Hai Ha issued 2,737,500 shares in addition to its 54,750,000 shares. The company’s current chartered Capital is 82,125,000,000 VND. 1. History Hai Ha JSC was founded in 1960. At the beginning, Hai Ha JSC was a small enterprise with the productivity of 2,000 tons per year, now the company has become one of the largest confectionery manufacturers in Vietnam with a average productivity of about 20,000 tons per year. In 2003, the company performed privatization according to Decision 191/2003/QĐ- BCN on November 14 th , 2003 of Ministry of Industry. The company officially operated as a joint-stock company on January 20 th , 2004. 2. Business activities The company’s main business is confectionery manufacturing and trading. Besides, it also has some other activities such as: - Importing and exporting raw material, machine equipments, profession products, consumer goods and other goods - Investing in building, let out offices, houses, shopping center. 3. Shareholder structure 3 HAIHA CONFESTIONARY JOINT STOCK COMPANY 4. Product and Market position a. Product Hai Ha’s products are much diversified such as soft cake, biscuits, cracker, candies, cream wafer, snack, jam, etc. These types of products mainly meet domestic demand especially average income consumers. In terms of revenue, candies in general are the main product line of Hai Ha over years, with sales up to more than 70% of the revenue of the whole company. In addition, wafers, biscuits & crackers are also traditional products of Hai Ha, which generate 22% of the total revenue for the company. Some successful product brands of Hai Ha JSC are CHEW HAIHA, jelly candy CHIP HAIHA, HAIHAPOP, pine soft cake MINIWAF, etc. b. Market position Haiha’s strategic products are candies and wafer cake. Meanwhile, its competitors - KinhDo is specialized in manufacturing biscuits, cracker cake and as for Bibica, its strength are sponge cake and candies. So far, Hai Ha accounts for 7% of total market share in domestic confectionery industry, after KinhDo and Bibica. In terms of candies manufacturing, Hai Ha 4 HAIHA CONFESTIONARY JOINT STOCK COMPANY is the second biggest enterprise accounting for 14% market share nationwide, just after Bibica. II. SWOT Analysis STRENGTH WEAKNESS -Prestigious and experienced brand - Diversified products range - Wide consumption network - Relatively stable financial performance - Products mainly serves domestic demand and average income consumers - Incomplete organizational structure & management skills - Lack of foreign investments - Highly sensitive to input materials price movements OPPORTUNITIES THREATS - High growth potential of confectionery’s Industry - Owner of a “golden land” at Truong Dinh Hanoi which is expected to generate promising future income - Consumers market expansion especially in the countryside - Expanding exporting market after - High inflation and slow-down GDP growth - Exchange rate risk - Unpredictable input materials’ price movements - Increasingly competitive market 5 HAIHA CONFESTIONARY JOINT STOCK COMPANY Vietnam joined WTO III. Macroeconomics and Industry Analysis 1. Macroeconomics analysis a. Exchange rate and foreign currency interest rate In 2010, the State Bank of Vietnam (SBV) adjusted the exchange rate twice. The first time was in February and the second time was in August. The official ceiling trading exchange rate over the last months of 2010 was 19,500. Yet, the exchange rate in free market could reach far more than this number. In February, 2011 SBV once again adjusted the interbank exchange rate with an increase of 9.3% and tighten the exchange rate range to +/- 1%. Overall, we can see that there is an upwards trend in the exchange rate fluctuation. Although, now the interbank exchange rate is monitored on daily basis to prevent sudden change in exchange rate’s impacts on firms and individual’s activities and the government is exercising various policies to stabilize the exchange rate; the trading exchange rate still remains at high level. Decision 750/QD-NHNN which is going to take effect in May requires the financial institutions to increase the required reserve ratio of deposits made on foreign currency from 4% to 6%. Circular 09/2011/TT-NHNN states the maximum deposit rate in foreign currency for individuals and organizations (3% for individuals and 1% for organization). These moves of SBV will force the commercial banks to consider reducing the offered rate for deposits made on foreign currency and raising the lending rate for loans made on foreign currency to compensate for the fraction of mobilizing funds used as additional required reserve. This, in turn, will discourage businesses from borrowing foreign currency. Considering Hai Ha JSC‘s case:  The company’s products are mainly produced to meet the domestic demand; which 6 HAIHA CONFESTIONARY JOINT STOCK COMPANY means that Hai Ha has a very low level of exports. Meanwhile, most of the company’s inputs such as wheat, milk, sugar, etc. have to be imported from foreign countries. (The company’s COGS over years account for approximately 70-80% of its net sale, which means that the company’s income depends largely on the price of its input materials). The high exchange rate will increase the production costs of Hai Ha while the company cannot increase its products’ prices at equivalent level in order to maintain its market share. This will obviously have negative effects the company operating activities and income. Also, the high lending rate for loans made on foreign currency will make it difficult for all imported firms like Hai Ha JSC to borrow foreign currency to make payment.  Secondly, Hai Ha is having a contract of land leasing at VSIP Industry Plant in Bac Ninh. The contract is made on USD with a price of 62USD/m 2 for 47 years since 14/12/2010. Although Hai Ha has made a considerable prepayment for this contract, the constant high exchange rate and complicated changes in exchange rate movements can be a challenge for Hai Ha’s capacity of fund management as well. b. Interest rate Interest rate in 2010 had unpredictable movements and in 2011, the ceiling deposit rate now is 14% and the lending rate is around 18-22%, which are quite high. However, high interest rate does not really have large effects on Hai Ha JSC activities as the company does not hold many debts. Hai Ha mainly hold short-term debts which is not very sensitive to interest rate changes. Moreover, the company’s short-term debt is money borrowed from its employees with the interest of 0.54%/month; thus, this borrowing can be considered quite safe. Besides, Hai Ha does not invest much in financial instruments; the company mainly invests in fixed assets such as equipment to improve its operating performance and thus, is not subject to interest risk. c. Inflation and GDP growth GDP growth of Vietnam in 2010 is 6.78%, increasing 13 billion VND compared to 2009. However, the inflation rate is 11.75% which is more than twice as much as what the Assembly aimed at the beginning of 2010 (5%). In the first quarter of 2011, the GDP growth is 5.43% which is the lowest level in recent years, also, the inflation rate is already 6.12%, account for nearly 90% of what the government set target for 2011 (7%). It seems that the 2- digit inflation rate situation will continue to happen in 2011. High inflation together with slow down GDP growth will affect the purchasing power of consumers especially when Hai Ha’s products (confectionery) are not necessities. Consumers will cut down on them as much as possible since they are not of their essential needs. This will negatively impact not only Hai Ha but also other companies in the same industry. 7 HAIHA CONFESTIONARY JOINT STOCK COMPANY 2. Industry Analyses a. Wheat price In 2010, wheat’s price movements were very complicated. In August, the wheat future price increased abnormally due to the shortage of suppliers in the market. Unstable climate conditions caused the wheat price to keep increasing as demand exceeded supply. Such wheat exporters as Russia, China, Ukraine and Kazakhstan had to suffer from severe drought. The output of Canada – the largest wheat exporter – in 2010 also decreased by 36% compared to 2009 due to heavy rains in North America. Overall, the world’s output of wheat in 2010 dropped by 5.3% compared to 2009. During the first months of 2011, wheat price constantly rises as a result of the chaos in the political climate of Middle East and North Africa regions. However, in April, there begins to have good sign in the wheat’s price movements. The price starts to decrease and becomes more stable thanks to the increase in wheat output of countries in the EU zone namely France. France has exported 10.6 million ton of wheat at the beginning of April, increasing by 17.8 million compared to the same period last year. Overall, despite the positive sign in the wheat price movements in April, at the moment, no certain conclusion can be made on wheat’s price movement in 2011. Hence, confectionery firms like Hai Ha JSC still need to catch up new information continuously to decide which time will be appropriate to purchase inventory especially when the COGS of these firm often accounts more than 70% of their net sale and there is no hint of a decrease in import tax on wheat from the government (5-15%) b. Sugar’s price Sugar’s price in 2010 was high as demand exceeded supply. Total domestic outputs could only meet 75% of local demand. Although in July, the Ministry of Industry and Trade allowed importing of 100,000 tons to stabilize the price, it still stood at high level till the end of the year. However, in 2011, sugar’s price in the world as well as in Vietnam is expected to decrease owing to an increase in sugar’s supply as: - The outputs of sugarcane in Thailand and Brazil- two largest sugarcane exporters- are estimated to go up considerably. Also, as a result of the high price level in 2010, farmers in such countries as China, Thailand, Vietnam and Brazil have expanded the areas for sugarcane cultivation. - In Vietnam, Circular 29/2011/TT-BTC issued by the Ministry of Finance which took effect on 15/4/2011 has reduced the preferential import tax rate on sugar to 15%. - Ministry of Agriculture and Rural Development estimated that the total output of sugar of Vietnam in 2011 was only 1 million ton and permitted a quota of 250,000 tons of sugar to be imported in 2011. Yet, during only the 1st quarter of 2011, 8 HAIHA CONFESTIONARY JOINT STOCK COMPANY although the sugarcane crop hasn’t finished yet, the total domestic outputs are already 860,400 tons (~86% of the ministry’s estimation). According to Vietnam Sugar Association, Vietnam now is having about 400,000 tons of sugar in stock. Together with 250,000 tons which were licensed to import, the sugar supply in 2011 will be high. 9 HAIHA CONFESTIONARY JOINT STOCK COMPANY B. Analysis I. Horizontal analysis 1. Balance sheet analysis Accounts Horizontal (year base 2006) 2007 2008 2009 2010 increase/decrease % increase/decrease % increase/decrease % increase/decrease % Current asset (9,892,521,70 5) (8 .23) 6,579,136,478. 00 5.47 5,121,270,121. 00 4 .26 36,666,993,259. 00 30. 50 Cash 6,378,045,940 3 2.52 3,826,450,267. 00 1 9.51 84,077,050. 00 0 .43 8,786,318,436. 00 44. 80 Current investment - - 5,000,000,000. 00 - Current account receivable (10,006,053,365) (27. 77) (10,966,798,968.0 0) (30. 44) (8,217,729,306.0 0) (22. 81) (12,071,421,795.0 0) (33.5 1) 10 [...]... 34 49 Current liability Non-current liability Liability + equity 12 HAIHA CONFESTIONARY JOINT STOCK COMPANY The data suggests that the company has trend to increase its assets, especially its asset increase strongly by 30.5% in 2010 This expansion was financed primarily by the contribution of owner’s equity rather than debts Figure 1: Percentage change of debts and owner’s equity of HHC from 2007-1010... Liabilities 56.36 49.09 47.43 38.89 43.06 Current liability 46.17 39.14 34.91 37.64 41.67 Non-current liability 10.19 9.95 12.52 1.25 1.39 Equity 43.64 50.91 52.57 61.11 56.94 Owner’s equity 41.13 48.18 49.92 57.57 56.94 Retained earnings 0.00 1.34 0.80 0.12 4.48 Other funds 2.51 2.73 2.65 3.54 0.00 100.00 100.00 100.00 100.00 100.00 Liabilities + equity 18 HAIHA CONFESTIONARY JOINT STOCK COMPANY As you... With the reference to capital structure, there was a balance between the weight of liabilities and the weight of equity The difference between liabilities and equity is not significant but you can see a slight change in the trend of the 2 factors The liability tended to decrease while equity tended to increase It means that the company switched to use its own resource rather than borrow from outside Figure... favorable, yet, its liquidity in the stock market is not as good as other stocks’ of the same industry 31 HAIHA CONFESTIONARY JOINT STOCK COMPANY IV DuPont analysis DuPont Identity 2006 2007 2008 2009 2010 HHC N/A 22.7% 19.0% 17.8% 15.9% BBC N/A N/A 5.2% 12.0% 7.8% KDC N/A NA -4.1% 23.4% 15.2% Based on DuPont identity methods, we can see a decreasing movement of Haihaco’s Return on Equity The reason for this... If in the first three years of the period, the equity multipliers took a large part of ROE, indicating the appropriately leveraged and risky condition of the company, then in the last two years, the total asset turnover has replaced the 32 HAIHA CONFESTIONARY JOINT STOCK COMPANY equity multiplier’s position, playing an important role in ROE’s identity, which shows a better management of the company... N/A 1.9 2.1 2.3 2.5 Equity Multiplier 2.43 2.08 2.00 1.74 1.76 ROE N/A 22.7% 19.0% 17.8% 15.9% 2006 2007 2008 2009 2010 PM N/A 5.4% 3.8% 9.1% 5.3% TATO N/A N/A 1.1 0.9 1.1 Equity Multiplier N/A 1.85 1.25 1.41 1.39 ROE N/A N/A 5.2% 12.0% 7.8% BBC 33 HAIHA CONFESTIONARY JOINT STOCK COMPANY KDC 2006 2007 2008 2009 2010 PM N/A 18.2% -5.9% 31.4% 27.0% TATO N/A N/A 0.5 0.4 0.4 Equity Multiplier N/A 1.25 1.44... (4,631,573,847.0 0) (6 01) 16,468,520,713 00 21 38 2,381,936,162 1 4.02 8,702,367,646 00 5 1.21 (14,590,749,414.0 0) (85 86) (13,867,579,066.0 0) (81.6 0) Equity 26,332,564,7 93 3 6.16 35,108,587,028 00 4 8.21 44,719,233,386 00 61 41 54,942,404,939 00 75 45 Owner’s equity 25,205,454,0 24 3 6.73 33,859,873,225 00 4 9.34 42,108,220,876 00 61 36 59,135,026,317 00 86 17 Retained earnings 2,614,395,055 - 1,642,500,000.00... demand of customers As a result, the profit margin goes down, leading to lower level of return on equity Taking into consideration the three factors contributing to ROE calculation, we can see that initially, the company’s ROE depended much on its financial leverage condition (measured by the equity multiplier), yet in the past two years, the efficiency in asset use (measured by total asset turnover)... JOINT STOCK COMPANY III Ratios analysis 1 Liquidity ratios a Current ratio: Current ratio 2006 2007 2008 2009 2010 1.561 1.447 1.769 1.731 1.678 BBC 1.270 3.758 2.172 1.815 KDC 3.751 2.221 1.537 2.253 HHC Current ratio of in Hai Ha is always larger than 1, remaining stable between 1.5 and 1.7, which indicated the company’s good financial health and its ability to cover current liabilities Because Hai Ha... competitors Therefore, the company had low possibility of gaining high earnings, but also encountered fewer risk of generating abnormally low income or even loss like its competitors especially KinhDo b Return on Asset ROA (%) HHC 2006 9.01 2007 2008 2009 2010 10.13 9.25 10.59 8.43 BBC N/A 6.45 3.39 7.78 5.49 KDC N/A 7.31 -2.86 11.31 10.37 c Return on Equity ROE (%) HHC 2006 20.63 2007 2008 2009 2010 19.90