giải pháp nâng cao năng lực tài chính cho tập đoàn hòa phát cổ phiếu tập đoàn hòa phát (HPG) ICF e

Giải pháp nâng cao lực tài cho Tập đồn Hịa Phát Cổ phiếu tập đồn Hịa Phát (HPG) Subject: Measures to improve financial capability for Hoa Phat Group Shares Hoa Phat Group (HPG) is currently listed on stock exchanges in Ho Chi Minh City In this context of influence of global financial- economic crisis, Vietnam has maintained macroeconomic stability and growth (6.78%) However, the year 2010 was a year with much fluctuation of economy: high inflation (11.75%), sharp increase in gold price (up 25% compared to 2009), decrease in VND by more than 9.68 % against the dollar, mechanism of two exchange rates, two interest rates, payment balance deficit distorting picture of the economy as well as businesses Interest rate among banks up to 17% at the end of the year, uninterruptible power shortages during the dry season and the severe consequences of the prolonged flooding in the Central Vietnam had a direct effect on business activities of enterprises With its unique operation, Hoa Phat Group is no exception to the influence of such fluctuations However, stability of industries and especially self-contained production model has helped Hoa Phat to overcome difficulties to fulfill the plan After summarizing the year 2010, Hoa Phat Group reached 14,493 billion VND of revenue and 1,376 billion of profit after tax, respectively 117% and 102% of the annual plan This is a great achievement in the context that many businesses can not overcome difficulties in the post-crisis period With a good foundation, closed production process, activeness in the input materials and proper corporate governance, Hoa Phat always dominates large market share in industries that the Group is involved and gradually asserting the leading position Hoa Phat brand reputation is not only intangible value but also as a guarantee of new products launched by Hoa Phat Group A new step in completion of the administrative apparatus of Hoa Phat Group in 2010 was restructuring the Holding Company Along with that, the financial analysis and evaluation of financial performance, through which to find solutions to improve financial performance, financial transparency of with stock code of HPG has brought confidence to the shareholders of the company, and a real value to all shareholders during purchase or sale of shares of the company Based on general research of Hoa Phat Group, group II developed and implemented a project called "Buying, selling or holding shares of Hoa Phat Group (HPG)"to making decisions on buying, selling or holding shares of Hoa Phat Group Part 1: Introduction of Hoa Phat Group HOA PHAT GROUP 39 Nguyen Dinh Chieu - Hai Ba Trung - TP Hanoi Tel: 043.6282011 - Fax: 043.9747748 Website: http://www.hoaphat.com.vn History and development of Hoa Phat Hoa Phat Group was formerly known as Hoa Phat Steel JSC In 2007, Hoa Phat Steel JSC has transformed into Hoa Phat Group, as the parent company holding 06 member companies including: Hoa Phat Equipment And Accessory Co.,Ltd, Hoa Phat Furniture, Hoa Phat Steel Pipe , Hoa Phat Refrigeration, Hoa Phat Construction and Urban Development, Hoa Phat Trading, Hoa Phat Energy, Minerals and Hoa Phat Minerals In Nov 2007, HPG listed its stock in the stock market of Vietnam, as one of the companies with the largest capitalization at HOSE Business activities of HPG is production of furniture, civil electrical equipment, manufacture of cement and business of construction materials, business of real estate, steel manufacturing and business, mining, production and business of materials and plastic products Currently, HPG has a highest or second market share of construction steel throughout the country Stock Information: - Charter capital: VND 3,178,497,600,000 - Stock code: HPG - Listing center: HOSE - First date of listing: 15/11/2007 - The number of outstanding shares: 317,849,760 shares List of major shareholders: Business line - Trading and importing- exporting steel, materials and equipment for processing and rolling steel; - Production of steel rolling corrugated iron; - Production of galvanized and non- galvanized steel tubes, stainless steel tube; - Producing and trading all kinds of ferrous metal, ferrous metal scrap; - Refining cast iron, steel, casting iron, steel; - Mining metal ores, trading metals, metal ores, iron and steel scrap; - Producing and trading all kinds of construction machinery and mining machines; - Producing furniture for office, household, and school; - Investment and construction of infrastructure of industrial park and urban areas; - Trading real estate (excluding price consultancy activities); - Manufacturing, trading, assembling, installing, repairing and maintaining electronics, refrigeration, civil power, air conditioning equipment; - Production of cement and building materials business Characteristics of management structure and organizational chart 5 Characteristics of production or services: Hoa Phat Group is an economic group with many business lines and subsidiaries and annual financial accounting activities of every independent company Hoa Phat Group is also a leading group of industrial production, business of real estate and mining with the parent company of Hoa Phat Group Joint Stock Company, 13 subsidiaries, and four associated companies It has more than 10,000 employees of which 20% have university and college degrees The steady growth in operations has brought about profitability and growth for the Group Part Financial status of Hoa Phat Group: Income statement for months in 2011 In the third quarter in 2011, profit after tax of Hoa Phat declined dramatically while sales increased slightly over the same period in last year Specifically, in the rd quarter, profit after tax was 110 mil dongs, down 66% yoy, while sales reached 4,237 billion VND, up 6% yoy Reason for that is lower demand for construction steel and coke making Hoa Phat to increase discounts and lower prices Average construction steel prices decreased by 267,000 dong/ton and discount increased by 195,000 dong/ ton compared to the 2nd quarter Besides, coke production costs and bank loan interest rate and exchange rate difference increased sharply… After months in 2011, HPG reached 13,606 billion of total revenue (reaching 78% of the plan for the year, up 37% yoy) and 1138 billion profit after tax (61% of the plan for the year, up 19% yoy) There are two highlights of this period including the growth of financial revenue and financial costs In particular, financial revenue increased by 104% yoy, achieving 275 billion VND due to interest on bank deposits; financial expenses increased 103% yoy, up to 861 billion VND due to increasing borrowing interest and exchange rate differences (account outstanding in VND of Hoa Phat increases 22% yoy while borrowing interest rate increases from 16% to 20% in 2011) Thus, due to financing costs heavily increases, revenue increases 37% yoy but net profit only increases 19% yoy Current ratio is currently at the end of rd quarter, 2011 is 1.53, relatively stable compared to previous years but it should be noted that due to the large inventory in the poor market, when the debt matures, the enterprise can be difficult Real estate market is quiet that causes not only difficult for Hoa Phat in the field of real estate business but also increases receivables from sales of steel, the amount of inventory increasing, this is the cause that turnover of inventory and accounts receivable 9M2011 reduce against previous year, only at 2.0 and 7.1 In 9M2011, indicators of ROA, ROE and total asset turnover of Hoa Phat are respectively 6.6%, 15.6%, and 0.8 Compared to three recent years, these indicators are declining due to total assets rapidly increase from the long-term investment and inventory but no corresponding to revenue and profit gained However, this investment promises to bring long term profitability for the enterprise According to latest information, in 11M2011, HPG reaches 16,562 billion VND of total sales and 1,252 billion VND in profit after tax, reaching 95% of revenue plan and 67% profit plan Although the steel market meets difficult but HPG’s steel construction is still quite good over the same period last year Specifically, sales in November reach 50,500 tons, up 19% compared to October Hoa Phat steel complex also reaches the highest level ever As in 11M2011, HPG reaches sales of 577,000 tons, increasing nearly 10% yoy Market share of Hoa Phat construction steel continue to be strengthened and expanded on a national scale Financial Targets in 2011 Revenue and profits over the years Stock price fluctuations: Source: VCSB Some solutions to improve financial capability Firstly, it is to improve qualification, knowledge of economy - society, culture, law for business owners, the managers and workers in the enterprise As remarked above, it is currently still 43.3% of business owners at lower than high school level, some at master degree or higher only accounted for 2.99% Thus, education - training should be equipped at bachelor level and the basic knowledge of economy - society, culture, law for business owners, directors, managers and workers Secondly, it is to strengthen the capacity of business owners, directors and managers in the business of business administration, strategic management In all conditions, entrepreneurs need to regularly update new knowledge, the necessary skills (management skills in competition, leadership, change management, presentation, negotiation and communication etc ) to compete in the market and access to knowledge economy To be competitive in the long term and confidently step into the knowledge economy, companies should build strategies for sustainable development In particular, focus on competitive strategies and strategic skills such as strategic management, risk management, and sensitivity in management, business analysis, forecasting and navigation on development strategy Thirdly, at present the majority of Vietnam enterprises are small-scale, few capital, qualification, business knowledge, awareness of the law (especially international law) is not high, levels of workers are low In this condition, to make competitive strategies it is necessary to implement the principle of association and cooperation to improve product quality, market competitiveness The association and cooperation is not the addition of all enterprises, which is to generate the extremely power is part of groups, economic groups with production and business (or some) of certain products and jointly implement brand strategy, promotion and advertisement of products on the market Fourthly, to strengthen the support of the government and authorities in capital, mechanisms, policies, laws, trade promotion, education - training, consultancy on equipment, modern technology for businesses Also, to further strengthen the role of associations, Director clubs and professional organizations for the development of enterprises Fifthly, to build the corporate culture Culture has an important role in the development, is both objective and driving force of socio-economic development In the old days, our father summarized: " Phi trí bất hưng, phi thương bất phú, phi công bất hoạt" Today, in modern society, the concept of value, the creative work, the sense of competition, the will to enrich, social trust is of great significance for improving competitive capacity and building the corporate culture Corporate culture, says a generalization as "the rich", ie enrich with culture: Enrich for them, business, society and the country The wealth in intelligence, fortunes and dynamism, creativeness is the social values that every businessman, business must have So, building corporate culture is to create a healthy cultural and positive environment that is always motivation In addition, the group management solution information systems, finance sourcing, corporate restructuring, … Part 3: "Buy, sell or hold shares of Hoa Phat Group (HPG)" Method of calculation: Earning Per Share (EPS) is calculated based on profits after dividing preferred dividends as net income of public shareholders NI divided current stocks EPS = net profit of public shareholders / number of shares issued = 1,490,186,000,000 / 311,309,624 = 4,787 Meanings: • EPS is nominal interest of shareholders • Changed as per quarter, month and year • Rate of shareholder based on to estimate future dividend 1.2 Dividend Per Share - DPS Calculated based on interest after divided preferred dividends as net income of NI public shareholders, after deducting remaining amount divided current shares DPS = Total dividend/issued shares = Of which: DPS: dividend TD: total dividend QS: quantity of issued shares of the enterprise Meaning: As the actual cash that the investor received on a common share through the Meeting of Shareholders 1.3 Ratio of profit share price of a share P/E Measurement of market price of a share from the income of a share P/E = market price of the share/profits on the share = 20,500/4,787 = 4.3 (times) In which: P/E: Ratio of profit share price of a share P: market price of the share EPS: profit on the share Meaning: • This ratio reflects how many shares the investors have to spend to get a dong of profit • This ratio if taking the inverse, it stated the rate of return on investment 1.4 The ratio of market price of the share on the book value of a share Measuring the ratio of market price of the share on the book value of a share P/B = market price of the share / price on book value of a share = 20,500 / 23,274 = 0.9 (times) In which: P/B: The ratio of market price of the share on the book value of the share P: market price of the share B: price on book value of a share General assessment • As a multidisciplinary group whose projects went into operation and in completing process, it promises big and long-term profits for the enterprise Along with the policy of high payment for dividends of 30% -40% / year (in which the dividend is regularly paid in cash of 20% / year), Hoa Phat will continue to attract investors • Hoa Phat is one of the few companies producing construction steel from iron ore By the the closed production lines, it help the Company maintain profitability However, due to investment in long-term projects, Hoa Phat fell into relatively large liabilities in the context of high interest rates, leading to the high financial costs, a large effect on profitability • Due to the strongly-reduced demand of consumption, thus the business operation in Quarter in 2011 resulted low The revenue obtained 4.237 billion dong, increased 6% yoy, meanwhile the profits reached 110 billion dong, reduced 66% yoy • In context of strongly-reduced steel demand as today, Hoa Phat has not decreasing adjusted the business planning indicators in 2011, thus the Company has not possibly completed the profits indicators of plan We forecast that in 2011, the consumpted steel output of Hoa Phat will be at 627.500 ton (reached 97% of plan), the revenue obtained 18.061 billion dong (exceeding 3% of plan), and the after-tax profits obtained 1.318 billion dong (only 71% of plan for year) It is considered as the EPS provision that in 2011, about 4.147 dong/cp, reduced compared with the basic EPS of latest quarters of 4.739 dong/cp • The basic P / E of Hoa Phat stock has low and lower than P / E in the sector of 4.3 times As the stock of leading steel sector with high liquidity, the financial situation is relatively good, and market price is the lowest area in 52 weeks, along with the expected revenue of long-term projects in the future, we believe that Hoa Phat stock will be suitable for valuable investment list 3 Prospect of the Company Business prospects in 2011: Due to the quiet impact of the real estate sector and policy of cutting down the public investment by the government, thus the consumption demand of construction steel in 2011 is forecast at only 4.6 million tons, reduced 5.5% yoy Therefore, the production and business activities of enterprises in general and of Hoa Phat steel in particular in 2011 are evaluated as negativeness According to the 11M2011 business report of Hoa Phat, we assume that the steel consumption in December 2011 is equivalent to 50,500 tons in November, the expenses of December are not changed as compared with November Thus, the revenues and profits of December will be equal to the November of 1499 billion of revenue and 66 billion of after-tax profits Thus, in 2011, the steel consumption output of Hoa Phat is forecast at 627,500 tons (reached 97% of plan, increased 8% yoy), and the revenue reached 18,061 billion VND (exceeding 3% of plan, increased 25% yoy ), and after-tax profits reached 1,318 billion VND (only reached 71% of plan in year, reduced 4% yoy) It is considered as EPS provision in 2011 about 4.147 dong / cp, decreased as compared with basic EPS of latest quarters of 4,739 VND / cp In the context that the steel market was difficult today, however, Hoa Phat has not adjusted to decrease the business plan targets in 2011 as other steel companies, thus the company will not be able to fulfill profit targets of plan Some investment projects of the enterprises Hoa Phat Steel Complex: In 2011, total exported production of coke reached 45,000 tons, expected profit of about 315 billion dong Phase is being invested and expected to be completed in late 2012, with a capacity of 700,000 tonnes of ingot / year by the investments of 3,600 billion VND The complex will increase the steel production capacity of Hoa Phat to 1.3 million tons of steel per year, bringing 500-700 billion profits per year after the completion of Phase Mandarin Garden Complex: To 30/9/2011, Hoa Phat has sold 300 apartments with an average price of 45 million per meter square The progress of payment is scheduled, 40% in 2011 equivalent to 693 billion and recognized as unrealized revenue of Quarter The project consists of four height buildings from 25 to 29 floors, providing about 1,000 superior apartments It is estimated that the project will bring benefits more than 2,000 billion VND for Hoa Phat selling all the apartments Some factors affect the steel enterprises The serious imbalance between supply and demand has pushed the steel companies in the world into competition, not to mention that it has to face with steels imported from countries in the region According to the commitment of joining free trade area within the framework of Common Effective Preferential Tariff (CEPT / AFTA), from 2015 onwards, the steel import tax rate into Vietnam is 0%, then the competition level of the domestic steel market will be more intense The steel pipe of Vietnam is formally investigated by U.S for anti-dumping and anti-subsidy by the time the exported steel pipe has increased to the U.S market and the export price has been relatively low This type of steel is used in manufacturing civil furniture and the importing tax rate to the U.S is at 0% It is able to apply U.S anti-dumping and anti-subsidy methods to non-market economy applied to Vietnam The price of material steels in the world has slightly reduced, thus it has kept the price of finished steel in the country maintained at the high level, contributing to reduce the consumption in the market Increasing inflation makes the prices of input raw materials such as coal, electricity, fuel, etc increased, contributing to the increase of production costs, thus it leads to an increase of steel price Credit interest rates will remain high Due to the characteristics of the steel industry as high loan rate, thus when the interest rate of loan is high, it increases the costs for investment and production, thereby it decreases the profitability of the enterprise In addition, for the construction and property enterprises, while increasing interest rate, it has made the enterprise difficult to access funds with reasonable expenses for investing in business operation, thus it has indirectly reduced demand for steel market The policy of monetary tighting to prevent inflation (in which wrenching the credit for field of real estate – as the field to create demand for the steel industry), and minimum reducing investment by the Government has reduced the consumption of market, thus reducing the profitability of steel companies Conclusion: When compared to the enterprise with large-scale steel production as Pomina Steel Corporation (POM), Hoa Sen Group (HSG), Dai Thien Loc Corporation (DTL), we found that Hoa Phat Company has the high liquidity than other enterprise by the largest ability of using cash to pay short-term liabilities In spite of relatively large in liabilities to invest in long-term projects, Hoa Phat still kept the liabilities ratio over the total assets or equity at the low level compared to POM and HSG With deep investment in steel resources (iron ore exploit ion, coke processing, and steel ingot), generally, Hoa Phat has the higher profit margins than POM and HSG On the index of the market, Hoa Phat shares has basic P/E at low level and lower than the P/E of 4.3 times in the sector In recent months, Hoa Phat shares reduced the most in price when the P/B is maintained at 0.7 times compared with the average level in the sector As the shares of leading steel section, it has high liquidity, the financial situation of the enterprise is relatively good, and the market prices are the lowest, we believe that Hoa Phat shares would be suitable for the valuable investment list  ... 2011 is equivalent to 50,500 tons in November, the expenses of December are not changed as compared with November Thus, the revenues and profits of December will be equal to the November of 1499... strategic management In all conditions, entrepreneurs need to regularly update new knowledge, the necessary skills (management skills in competition, leadership, change management, presentation,... domestic steel market will be more intense The steel pipe of Vietnam is formally investigated by U.S for anti-dumping and anti-subsidy by the time the exported steel pipe has increased to the