Đánh giá sức khỏe tài chính của công ty CÔNG TY cổ PHẦN THỦY điện VĨNH sơn – SÔNG HINH (VSH HOSE) thông qua phân tích báo cáo tài chính nhằm đưa ra quyết định đầu tư e

Group assignment – Business Finance Đánh giá sức khỏe tài cơng ty CƠNG TY CỔ PHẦN THỦY ĐIỆN VĨNH SƠN – SƠNG HINH (VSH-HOSE) thơng qua phân tích Báo Cáo Tài Chính nhằm đưa định đầu tư Exercise 1: “Evaluation on the financial health of X company through the analysis of Financial Statement aiming to make decision on investment” ANALYSIS OF VINH SON –SONG HINH HYDROPOWER JOINT STOCK COMPANY (VSH-HOSE) OVERVIEW OF THE COMPANY VSHPC - VINH SON - SONG HINH HYDROPOWER JOINT STOCK COMPANY 21 Nguyen Hue, Quy Nhon City, Binh Dinh Province Tel: +84-(0)56-89.27.92 Fax: +84-(0)56-89.19.75 Email: nmtdvson@dng.vnn.vn Website: http://www.vshpc.evn.com.vn Group assignment – Business Finance HISTORY Formerly, Vinh Son- Song Hinh Hydropower Joint Stock Company was a Vinh Son Hydropower Plant directly under Power Company III It was established on September 15th, 1991 and taken into operation and connected to the national power grid on December 4th, 1994 In 1999, to improve the performance of power system management and take advantage of the accumulated experience in the operating management of the management team of Vinh Son Plant, Vietnam Power Corporation assigned Vinh Son Hydropower Plant to manage and operate the Song Hinh Hydropower Plant project Since July, 2000, the name of Vinh Sơn Hydropower Plant was converted to Vinh Son- Song Hinh Hydropower Plant with four operating units contributing the power output of over 600 million kWh to the national grid every year On May 04, 2005, the Plant was officially transferred to operate under Joint Stock Company with the new name Vinh Son- Song Hinh Hydropower Joint Stock Company On July 07, 2005, the Company was licensed to be listed on the Hanoi Stock Exchange Center, until July 18, 2006, the shares of the company was officially traded on the Ho Chi Minh Stock Exchange Center, the charter capital of the Company by Nov, 2006 was 1,250,000,000,000 dong, equivalent to 125,000,000 stocks traded LINE OF BUSINESS Production and business in power; management, operation and maintenance of hydropower plants; project management consultancy, and construction supervision of hydropower plant projects; electrical experiments; trade in electrical material equipment With the capacity of 66MW and annual power output of 230 million KWh, Vinh Son Hydropower Plant is the first and largest Hydropower Plant in the Central and Highlands VSH provides above 2.4 % of national capacity POSITION OF THE COMPANY Vinh Son- Song Hinh Hydropower Joint Stock Company is one of hydropower plants of EVN With the capacity of 136 MW, the capacity of the Group assignment – Business Finance Company accounts for 3.3% of total power capacity of EVN, and 1.2% of total national power capacity The Company is the first and largest hydropower company in the Central and Highlands DEVELOPMENT & INVESTMENT STRATEGY * In the near future, the Company at first will continue to strengthen and improve the organization, promote the business performance in two hydropower plants as Vinh Son and Song Hinh, effectively exploit the project, enhance the production capacity of Vinh Son- Ho C hydropower plant which taken into operation in October 01st, 2007 * Speed up the progress of the project in Ho A-Vinh Son Renovation Project to supplement the water source and the capacity of Lake A in order to increase the annual power output of Vinh Son plant up to about 35 million KWh every year MAJOR SHAREHOLDER- SHAREHOLDER STRUCTURE State Ownership: 54.55% Foreign Ownership: 19.35% Other Ownership: 26.10% INVESTMENT ACTIVITIES INVESTMENT IN KONTUM PLANT AND OTHER PROJECTS In 2009, the Company announced the investment plan in production expansion Three projects Thuong Kontum and Vinh Son 2&3 had planning Dong Cam project is still in the pending of additional planning In 2009 and 2010, some of Thuong Kontum project development contracts are signed Meanwhile, Vinh Son 2&3 is deploying the survey, design and Contractor selection Because the business lacks detailed information and it also is reaching the capital mobilization method, we not count Vinh Son 2&3 project as well as Dong Cam project to the business result We will update when the information is more detailed In addition to the above expansion projects, VSH is performing the Group assignment – Business Finance rehabilitation, improvement of reservoirs to increase the power output of Vinh SonSong Hinh Plant (implemented in the period of 2010 -2011) FINANCIAL INVESTMENT By 9T2010, VSH has 725 billion of short-term investment and 470 billion dong of cash According to the explanation of Financial Statement 6T2010, most of the above amounts are short-term deposit which less than year, in which, there is 500 billion dong is the loan to EVN In the future, VSH will have a specific plan to use this fund to invest in above hydropower projects So, the financial revenue will tend to decrease, the financial revenue of 2008, 2009 and 9T2010 is 100 billion dong, 82 billion dong and 73 billion dong, respectively Currently, VSH only has one associated company as Binh Dinh Travel Joint Stock Company, the ownership proportion is 49.72% (nearly 13.54 billion dong) Profit after tax from the associated company in 2009 is about 6.5 billion This is not the major activity of VSH FINANCIAL TRANSPARENCY Deloitte is the independent audit unit of VSH This Company does not have any exclusions for VHS financial statement, and the assessment of the financial statement reflects the correctness and reasonability in every key respects ANALYSIS OF COMPANY FINANCE FINANCIAL STATEMENT Year Year Net revenue Cost of goods sold 2011 2010 2009 2008 459,415 424,508 517,563 483,680 185,734 183,823 184,901 177,685 2007 370,162 168,040 Gross profit 273,681 240,685 332,663 305,995 202,122 Business result Operating expenses Financial expenses In which : loan expenses Cost of sale Year 36,386 4,127 N/A Year 16,304 3,412 N/A Year 19,280 6,514 N/A 26,545 10,620 N/A 15,980 15,392 N/A Group assignment – Business Finance Cost of business management 18,578 11,302 14,921 10,168 7,606 Total operating expense 54,964 27,606 34,201 36,713 23,586 82,105 100,549 75,835 356,921 323,040 380,567 369,831 254,370 217 153 100 51 363,691 324,673 387,145 370,207 256,281 Total revenue from financial 138,204 109,962 activities Net profit from business activities Other profits Total profit before tax Cost of profit Cost of Corporate income tax Benefits of minority 34,655 22,261 14,007 -739 -560 N/A N/A N/A N/A N/A 34,655 22,261 14,007 -739 -560 329,036 302,413 373,138 370,945 256,841 shareholder Total cost of profit Profit after corporate income tax BALANCE SHEET Asset Short-term asset Cash and cash equivalents Short-term investments Short-term receivables Inventory Other current asset TOTAL SHORT-TERM ASSET Long-term receivables Fixed asset (accumulated depreciation) Investment property Long-term financial investments Year Year Year Year Year 2011 2010 2009 2008 2007 482,797 699,583 603,245 25,421 86 677,418 550,685 388,372 42,157 137 196,281 785,685 156,617 20,526 63 47,989 825,685 99,350 20,832 69 228,784 510,685 70,558 23,362 49 1,811,132 1,658,769 1,159,173 993,926 833,438 N/A N/A N/A N/A N/A 1,518,890 1,355,554 1,406,167 1,478,057 1,614,584 1,887,49 1,770,01 1,626,26 1,475,25 1,324,41 N/A N/A N/A N/A N/A 12,942 11,721 13,538 9,969 10,419 Group assignment – Business Finance Other non-current assets Goodwill TOTAL ASSETS Liabilities Short-term liabilities Long-term liabilities 2,769 2,786 2,072 1,299 1,008 N/A N/A N/A N/A N/A 3,345,733 3,028,831 2,580,950 2,483,250 2,459,449 Total Liabilities 742,949 258,027 263,802 335,023 69,199 249,258 116,516 224,994 123,818 314,007 1,000,976 598,826 318,457 341,510 437,825 Liabilities and owner’s equity Equity Other resources and funds Total liabilities and 2,343,098 2,427,912 2,261,116 2,141,120 2,020,949 1,659 2,093 1,377 621 674 2,344,757 2,430,005 2,262,492 2,141,741 2,021,624 owner’s equity Benefits of minority N/A shareholder TOTAL LIABILITIES AND OWNER’S EQUITY N/A N/A N/A N/A 3,345,733 3,028,831 2,580,950 2,483,250 2,459,449 KEY FINANCIAL RATIO OF THE COMPANY EPS VSH: QUARTER OF THE YEAR 2012 Adjusted EPS Date 201104-01 201203-31 Event Actual KL Adjustment Weighted coefficient time Beginning 202,241,246 = Ending 365 Adjusted number of shares 202,241,246 * * 365 = 73,818,054,790 202,241,246 Total 365 73,818,054,790 Average weight: 73,818,054,790 / 365 = 202,241,246 Reporting period Shareholder dividends Q1 2012 65,733 Q4 2011 81,556 Q3 2011 56,875 Q2 2011 93,413 Total 297,577 Group assignment – Business Finance (million dong) Basic EPS = Total shareholder dividends/KLDLH bq 297,577,000,000 / 202,241,246 = 1,471 P/E (Price to earnings ratio) = Current price / EPS P/E = 10,500/1,471 = 7.1 (times) Market capital = Current price x listing volume Market capital = 10,500 x 206,241,246 = 2,165.5 (billion) Outstanding share = Listing volume - Treasury Shares Outstanding volume = 206,241,246 - 4,000,000 = 202,241,246 (shares) Total share volume = Listed volume + Unlisted Volume Total volume = 206,241,246 + = 206,241,246 (shares) Book value = Equity/ Total share volume Book value = 2,357,647,000,000 / 206,241,246 = 11,432 (dong) P/B (Market price to Book Value ratio) = Current price / Book value P/B = 10,500 / 11,905 = 0.9 (time) ROA (Return on Asset)= Total_LNST_4_nearest quarters / Total assets (see financial statement) ROA = 297,577,000,000 / = (%) ROE (Return on Equity) = Total_LNST_4 nearest quarters / Equity (See financial statement) ROE = 297,577,000,000 / = (%) FL (Financial Leverage) = + (Total liabilities / Equity) (Sea financial statement) FL = + (0 / 0) = INVESTMENT DECISION Group assignment – Business Finance Under the point of fundamental analysis, with the existing share of VSH, the financial situation of VHS is quite good, high liquidity, attractive gross profit margins, consistent with the short-term objective VSH is in the period of investing in production expansion Besides Thuong Kontum project, so, it is hard to have the full review of changes in the corporate financial structure in the near future (2011 - 2015), as well as risks related to the business results Therefore, it is quite risky to consider the VHS long term investment in this period Investor should wait for more detailed information Question 2: with the X Company selected in the exercise1: conduct a project named: “Sell, purchase or hold the stock of X Company through the use of business valuation model” ASSUMPTIONS The temporary electricity price of VSH 2012 is equal to 90% of selling price in 2011 due to the pending for the result of electricity price negotiation with EVN However, when reservation, we assumed that the selling price of electricity 2012 is equal to the its selling price in 2011 (580 VND/Kwh in dry season and 476 VND /Kwh in rainy season) Besides, we assume that the selling price for the period of 2011 - 2015 will increase 20% over the period of so 2005 - 2010 according to the market price of electricity, the average selling price in tear is about 675 VND /Kwh So, the revenue of 2011 had a sudden increase over 2010 although the output was not stable At present, VSH plans to expand the production through construction project of new plants Until now, only Thuong Kontum project has a clear plan, other projects is in the process of planning completion, and search for the capital mobilization method Therefore, we only review Thuong Kontum project for provision When Thuong Kontum is taken into operation, its output is expected to increase in 2014 and 2015, add 1,094 million kwh/year (total output reaches 1.964 million kwh/year), so, the revenue has a strong growth in 2014 and 2015 (55% and 46%, respectively) Group assignment – Business Finance The deploy of Thuong Kontum project, CPXDCBDD will increase about 5,774 billion dong, forward to fixed asset in the period of 2013 - 2014 VSH plans to mobilize 1000 billion dong of bonds, we assumes that the loan recognized in 2011 as a common bond The interest expenses arising from the first period is capitalized, it is not reflected in the financial expense in the same period The profit is also preferred for the investment activities, the expenditure proportion of dividends does not increase in the near future (kept at 10% - 12% of par value) VALUATION RESULT We use the Dividend Discount Method (DDM) for business valuation, with the beta is 0.96, the complement of risk 4.2%, risk-free rate is 10.8%, the average profit growth in the period of expansion investment is 7.5% Accordingly, we value VSH at the current time is 14,778 VND /share, the current market price of VSH is 12,000 VND /share, lower then the intrinsic price of about 40.2% INVESTMENT RECOMMENDATIONS Under the point of technical analysis, VSH is fluctuating between the medium and long term In June 22, 2012, the share price of VSH gained the lowest level at 10,500 dong (the price matches the adjustment in the first transaction date), VSH is purchased and supported by investor at this threshold Thus, after a relative long discount, VSH created a higher peak at 13,000 VND on June 13,2012 along with the quite optimistic trading volume This shows that VSH has ability to reserve and increase in the short-time The price increase trend in term of technical analysis will be established if VSH gets over the peak of 13.000 VND set on June 13, 2012 Therefore, short-term investment can be considered to purchase in the support range 10,200-10,400 with the target price is 13,200 VND, compared to the internal price of 14,778 VND /share -The end - ... The interest expenses arising from the first period is capitalized, it is not reflected in the financial expense in the same period The profit is also preferred for the investment activities,... ability to reserve and increase in the short-time The price increase trend in term of technical analysis will be established if VSH gets over the peak of 13.000 VND set on June 13, 2012 Therefore,... pending for the result of electricity price negotiation with EVN However, when reservation, we assumed that the selling price of electricity 2012 is equal to the its selling price in 2011 (580