Traphaco JSC analysis and valuation

PREFACE Over the past 20 years since the Decree No 48 / CP of the Government was signed on July 11, 1998, Vietnam's stock market has undergone many changes, but is also growing stronger and stronger many different stages Vietnam stock market has expanded strongly in terms of the number of securities codes, capitalization, transaction value In which, the total market capitalization of trading íloors reached over million billion dong, the number of listed and registered companies traded more than 1,550 codes Many industries have been developed along with economic growth The stock market has made an important contribution to VietnanTs economic development Currently, the pharmaceutical industry is being interested in by many investors because it has a lot of potential for development The outstanding names in the pharmaceutical industry include Hau Giang Pharmaceutical JSC, Traphaco JSC, Traphaco JSC has a quite different direction than other companies in the same industry, which is more íồcused on traditional medicine Traphaco is almost monopoly, occupying a large market share in this segment Realizing this, I chose my thesis topic "Traphaco JSC: Analysis and valuation" to clarify the potential of this stock code Research Objective • Research Question: How we identify the fair value of TRA’s stock? • General Objective: Using Literature Review and applying it to find out the intrinsic value of TRA’s stock • Speciíic Objective: o Analyzing business períồrmance of TRA and forecasting the potentials of TRA in five consecutive years (2019-2023) o Using valuation methods to determine the intrinsic value of TRA’s stock and comparing this value with the market price so as to whether TRA has been overvalued or undervalued o Relying on the valuation outcome and then recommending investors whether they should invest in this stock or not Research Object TRAPHACO joint stock company Research Scope • Time: 2014-2018 • Limited research: Vietnam Research Methods • • Literature reviewer Data analysis Research Structure My thesis has been devided to chapters: - Chapter 1: Literature Reviewer - Chapter 2: Analysis of TRA performance Chapter 3: Valuation and Recommendations CHAPTER 1: LITERATƯRE REVIEW 1.1 Deíinitions 1.1.1 Stock market The stock market is a place for individuals or businesses to buy, sell and issue shares regularly These financial activities are carried out through official institutional exchanges or the free trading market (OTC) operating under detined regulations There may be multiple stock exchanges in a certain country or region Stock markets and stock exchanges can be used to replace the same place 1.1.2 Stock Stock is a tinancial asset, which is a type of securities issued in the form of a certiíicate or book, contirming the ownership and legitimate interests of the owner of the property Stocks are bought and sold mainly on stock exchanges, although there may be private sales, and are the íồundation of almost every portíồlio These transactions must comply with Government regulations to protect investors from fraud These investments can be purchased from most securities brokers 1.1.3 Valuation A valuation is an estimate of how much a business, property, or any asset is worth There are many different tools for implementing valuations A tinancier wants to implement valuation, they will analyze the management structure, Capital structure, market value and future prospects In tinance, things that are valued are tinancial assets (such as stocks, options, businesses, etc.) and debts such as bonds issued by a company Valuation models: are models created by investment analysis for the purpose of determining the value of tinancial assets These models have inputs that are collected from avaiable information sources about assets such as tinancial reports, information onsimilar Products, market movement, and so on Then, this information is processed through caculations and analysis combined with the subjective judment of the model user, and then he output is the intrinsic value of the Tinancial asset (Bodie et all, Investment 2015) 1.1.4 Intrinsic value Intrinsic value is the qualitative or quantitative value of an asset, an investment or a company This term is used in basic analysis to estimate a company's value and its cash flow The intrinsic value used is the interest amount in the option contract Intrinsic value is calculated using basic analytical techniques to assess an enterprise in all aspects such as business model, corporate govemance, market factors affecting businesses, goals of the business The value obtained is compared to the market value to determine whether the business is overvalued or too low by the market Typically, investors will use both qualitative measures and quantitative measures to get the most accurate results about the intrinsic value of a business However, all is an estimate, not a sure thing 1.1.5 Valuation methods a Net asset vahie (NA V) Net asset value (NAV) is the value of all tinancial assets and non-financial assets minus the value of unpaid debts, often related to tinancial funds, because of those funds is registered with the Securities Commission The Securities Commission is acquired by their net asset value It is an important indicator of hedge funds and hedge funds when calculating the value of the underlying investments in these funds of investors This may be like the book value or equity value of a business Net asset value can represent the value of total equity or can be divided by the number of outstanding shares of investors The formula for a mutual fund's NAV calculation is straightforward: NAV = , , Total number of Outstanding Shares Assets - Liabilities The correct qualiíying items should be included for assets and liabilities of a fund b Vahiation by discoìmted cash flow modeỉ (DCF) The DCF model is a way to evaluate the value of a stock or an investment project for an investor Analysts use this method to determine the íuture cash flow of a specitic stock or project discounting the present value, thereby assessing the íeasibility of the investment project If the íuture cash flow aíter the discount is too large compared to the current investment cost of the project, it can be assessed that this is a good investment project DCF model is built on the íoundation of the concept of time value of money and the relationship between proíit and risk Models can be represented as mathematical expressions as follows: Where: CFt is the expected cash flow to be obtained in the íuture, PV = CFo CF2 H- -CF1 - -1 —— (l+k)l (l+k)2 (l+k)O CFn (l+k)n k is the discount rate used to discount the cash flow to the present value, n is the number of periods The DCF model is widely used in corporate tinancial decisions, especially investment decisions, specitically: - Valuation of assets, including tangible tixed assets and tinancial assets to make a decision to buy or sell it - Analyzing, evaluating and deciding investment in the project is highly íeasible - Analyzing, evaluating and deciding whether to buy or rent tixed assets J Advantages of DCF This method takes into account the entire economic life of an investment and income It brings a proíit eamed by a new project It creates weight over time of íinancial factors Because discounted cash flow methods are clear and often consider the time value of money, this is the best method to use for long-term decisions It allows direct comparison of the expected retum of investments with borrowing costs that other methods cannot It creates a grant for the difference in the time that investments generate their income This approach by recognizing the time factor provides enough for uncertainty and risk It provides a good measure of the relative proíitability of Capital expenditure by reducing income on current values J Disadvantages of DCF Assumptions regarding permanent growth and discount rates make the DCF calculated value more sensitive Valuation of DCF will íhictuate and will not calculate the value needed if there are any smallest changes It is best used only when there is a high degree of contidence in cash flow in the future Analyzing a company with a stable past cash flow, such as a food or health care company unaffected by changes in the economy, can make comparisons of trends stable planning in the future easier Proíltable companies with abundant cash flow are more likely to continue to increase cash flow in the hiture, or hold on if the recession occurs Problems with using this model can happen to businesses with erratic cash flows, making it difficult to predict the future New companies that tend to be unproven or immature are also hard to judge using the DCF method DCF model is suitable for longer term investment because it creates long-term value, not suitable for short-term c Free cash flow (FCF) Free cash flow is a method of assessing business activities which is calculated by the difference between operating cash flow and Capital expenditure On the other hand, free cash flow is the cash value that businesses can obtain after expanding assets for production and business activities If you want to maximize value for shareholders, it is imperative that businesses understand what free cash flow is, thereby building investment opportunities Businesses will find it difficult to conduct business activities such as advertising, product development and paying dividends without cash Free cash flow is calculated as follows: FCF = Net income+Depreciation-Change in Working capital-Capital expenditure The FCF is the unit of measurement of the company's cash available by working Capital and íìxed Capital investments, or Capital expenditure (CAPEX), over a certain period of time Companies want to enhance the value of shareholders, the FCF is a good way to express it As the free cash flow increases, the strength of the balance sheet increases However, when negative free cash flow is not only a bad sign, it may be a sign that the company is investing in many different projects This valuation method can increase the value in the long term if the investments bring retums to investors There are two types of free cash flow: Free Cash Flow for the Firm (FCFF) and Free Cash Flow to Equity (FCFE) In the content of this thesis, I use the Free Cash Flow to Firm (FCFF) model J Free cash flow to firm (FCFF) Free cash flow to firm (FCFF) is the remaining cash flow for the entire company (those who own assets) and so it is also called free cash flow Free cash flow to firm(FCFF) represents the amount of cash flow from operations available for distribution after depreciation, tax, working Capital and investment costs are accounted and paid FCFF is basically a measure of the company's proílt after all costs and reinvestment This is one of many benchmarks used to compare and analyze the tinancial health of a company FCFF represents cash available to investors after a company has paid all business costs, invested in current assets (such as inventory) and invests in long-term assets ( as device) FCFF includes both bondholders and shareholders when considering the remaining amount for investors FCFF method is a good method for company operation It is taken into account all types of cash flows from cash, cash expenditures and reinvestments needed to maintain business operations The remaining amount after performing all these activities represents the company's FCFF Free cash flow for businesses - FCFF is said to be the most important tinancial index of the stock value of the business Using FCFF is the cash flow left after dismissing all responsibilities and projections for the future will bring high accuracy There are many formulas to determine free cash flow, one of which is: FCFF = Net income + Non-cash charges + Interest X (1-tax) - Long-term investment - Investment in worrking Capital Other equations include: FCFF = Cash Flow from Operations + Interest Expense X (1 - Tax Rate) - Capex FCFF = EBIT X (1 - tax rate) + Depreciation - Capital expenditures - Increase in Net working Capital ECEE = EBITDA X (1 - tax rate) + Depreciation X tax rate -Long-term investments - Investments in working Capital J Beneíit of Using FCFF: The value of a stock is the sum of the expected cash flows of the business in the future However, stocks are not always correctly priced When understanding the FCFF method, investors who are allowed to check that stock investment are worth it It also shows the ability to pay dividends of businesses, buy back stocks or repay debts Investors should check FCFF if they want to invest in bonds or businesses Businesses after deducting costs still have cash to prove the FCFF value is positive Conversely, when the negative FCFF value indicates that the firm does not generate enough revenue to generate proíit At that time, investors should go find out why it is so J Limits of Using FCFF One fact is not going to solve every investor problem: Free cash flow is only as good as the accuracy of the íồrecasts that are being used to simulate future growth A lot of things can happen to a company over the course of 365 days It only works when there is visibility: Free cash flow metrics will only work when a company is operating with 100% transparency If there are questions about the sales practices, cost trends, and other information that can affect the free cash flow, then there is too much uncertainty to use this measurement as a tool for the investor It also only works based on the projections created by the investor Free cash flow is a good piece of information to have, but the investor is íồrced to still make assumptions about what will happen in the future The accuracy of those assumptions will create a projection that either hits the nail on the head or falls fall short and hits the investor square on the thumb Being off by just percentage point for some companies can change the íinancial Outlook be tens of millions of dollars The ratio of short-term debt to total liabilities of the company is always high (about 60-70%) mainly due to payables from sellers, usually accounts for 25% - 30% of total short-term debt At this stage, the tínancial leverage was gradually raised to 1.44 because in 2018, Traphaco borrowed a large amount of money, so the Hnancial leverage increased again to make up for the loan 2.4.3 DuPont analysis ROE 15.78% —I ROA 10.99% Equity multiplier 1.44 Proíit Total assets tumover margin 113.11% V 9.7% Current Sales Total Sales Sales Fixed assets Total Net income assets 730,467,787,8 1,798,349, assets 1,798,349, 1,798,349, costs 174,773,49 30 1,589,862, 859,394,250, 6 6 66,292 79 I — 66,292 66,292 ,962 ~^qp= Inventory Cash COGS Account 337,532,72 Depreciatio 316,133,597 receivable 863,658,95 ,252 153,573,242 ,814 ,721 ,990 Figure 27 - DuPont Analysis in 2018 Table 2.4 - The basic DuPont analysis Net proíit Assets Equity margin turnover Multipiler 2016 11.4% 1.38 1.36 2017 13.9% 1.21 1.35 2018 9.7% 1.13 1.44 Overall, in 2016-2017, all indicators increased but by 2018, this index fell again, causing ROE to drop sharply from 23.3% in 2017 to 15.8% in 2018 There is only an indicator increase is íinancial leverage Prove that in recent years, the company has always used good íinancial leverage to increase proíits And another reason is part of the debt was paid However, it should not be used too much because it can be counterproductive ROA increased slightly from 2016 to 2017 (from 15.8% to 16.8%) and then fell sharply in 2018 (from 16.8% to 11%) ROA measures how efficient a company’s management is in generating eamings from theữ assets In this case, along with the Sharp increase in interest expenses, generally, the health of TRA is not good Net proíit margin increased in 2017 and decreased in 2018 (from 13.9% to 9.7%) The decline in net proíit margin is due to better cost management than 2017, but declining net sales and inventories are much higher, interest expenses higher than 2017 (4.72 times higher than 2017) To explain the decline in net revenue is due to the decline in entrusted import-export business and revenue from subsidiaries All loans come from short-term bank loans 70% of TRA's revenue and 93% of gross proíit comes from selfproduced Products In particular, revenue from oriental medicines currently accounts for 77% with two main Products: Boganic currently accounts for 22% of the market share of activated liver and vascular tonic, currently accounting for 12% of the nerve market share Total revenue from these Products accounts for about 50% of TRA's íinishedproduct sales Revenue from medicine contributes 23% to the íinished product revenue with the main product being T-B cough and mouthwash Tax Table 2.5 - DuPont model extends Interest EBIT Assets Einancial Burden Burden margin turnover leverage 2016 80.29% 100.69% 14.07% 1.38 1.36 2017 80.71% 99.69% 17.3% 1.21 1.35 2018 80.83% 99.71% 12.06% 1.13 1.44 Tax Burden measurement of the level of corporate income tax that companies must pay Within three years, the tax burden tends to increase In 2016, tax burden is 80.29%, the company retained 80.29% for each contract they made after subtracting all the costs From 2017-2018, the tax burden keep increasing 80.83% (increase 0.54% compared to 2016) The change of tax burden is very small, but it goes in a bad direction because of the increasing trend This shows that, the company has to pay more and more tax but the proílt does not increase rapidly, adding a tax burden The ratio between Eamings beíồre tax compared to Eamings beíồre tax and interest (EBIT) is call Interest burden In 2016, it was 100.69%, it is very high, indicating that the company almost no ílnancial leverage In 2017, it plummeted down to 99.69%, ílnancial leverage was higher, with companies that have beneílted more But in 2018, it increased slightly by 0.02%, not signiílcantly This shows that the company absolutely no short-term loans or to pay off, it has no ílnancial leverage EBIT Margin is an indicator to assess the level of production costs compared to revenue EBIT margin has not grown in the past years, not following a ílxed trend In 2016, EBIT margin is 14.07% In 2017, EBIT margin increased 17.3% (up to 3.32% compared to 2016) In 2018, EBIT margin decrease again to 12.06% in 2018 (up to 5.24% compared to 2017) 2.5 Analysis of major risk related to operating activities 2.5.1 Business risks in the newpharmaceutical segment The goal of invading the Westem Pharmaceutical segment can dilute its advantages like the Oriental medicine segment At the same time, when Westem pharmaceutical manufacturing enterprises are gradually gaining position in the market, Traphaco may face difficulties in competing with other competitors in the industry 2.5.2 Risk of price competition The proactive strategy in producing and Processing clean raw materials, enhancing product research and development activities is an opportunity as well as a challenge for Traphaco when the company can face difficult and cost-effective team problems price competition Foreign competitors dominate the pharmaceutical market in Vietnam plus the psychology of consumers when favoring Westem pharmaceutical Products over Oriental pharmaceutical Products also makes it difficult for the company 2.5.3 Risks related to corporate governance situation SCICs ownership rate accounts for 35.67% of Traphaco's Capital and with the control actions from SCIC may negatively affect the ambitious development plan and orientation of Traphaco in the upcoming development period Traphaco is under pressure to sell shares from its management 2.5.4 Risk of ỉaw and taxpolicies The pharmaceutical industry is one of the Industries affected by the state's management The Government has issued many legal documents to manage the pharmaceutical industry, including documents related to issues such as the State's policies on pharmaceuticals and the State's management of drug prices and business conditions drugs and drug management on the list of drugs subject to special control, drug quality standards, drug testing establishments Besides, it is an enterprise operating in the form of a joint stock company, business activities of the Company under the inthience of Enterprise Law, Pharmaceutical Law, Securities Law, Sub-law documents and other laws Laws and documents under this law are in the process of being finalized, changes in policies may occur and, when they occur, will more or less affect the business situation of the Company 2.5.5 Risk of counterfeit and fake goods Currently, the phenomenon of counterfeit goods and goods violating intellectual property rights in the pharmaceutical sector is becoming a worrying fact for pharmaceutical enterprises with healthy business and production activities in the market On September 30, 2006, the Ministry of Health issued a decision on the issuance of data security regulations for drug registration records The introduction of intellectual property law together with the above decision will contribute to the protection of pharmaceutical enterprises against the infringement of counterfeit and counterfeit goods as well as further strengthening the competitive environment of the pharmaceutical industry Although the Government has applied many measures to protect the trademark of domestically produced goods, counterfeit goods, counterfeit goods and smuggled goods appear more and more popular and sophisticated in the market Counterfeit goods, counterfeit goods, and smuggled goods cause huge damage to the interests and reputation of businesses, especially for pharmaceutical companies because of counterfeit and smuggled pharmaceutical Products Quality directly threatens the health and life of users Thereíồre, the Company always consciously protects its Products by improving the quality, design, packaging and paying more attention to the trademark and trademark registration 2.6 Potential of investment project 2.6.1 Situation of important investmentprojects TRA is proactive in raw materials when using 80% of domestic materials while other enterprises mainly import nearly 90% of raw materials from China Traphaco aims to develop a closed material area, most of Traphaco's medicinal raw materials come from farming activities of high-tech Traphaco and Traphaco SaPa Since then, limiting input import costs and managing the quality of pharmaceutical materials, improving gross proíit margin over the years (up from 49.8% in 2016 to 55.6% in 2017, higher than the Other pharmaceutical enterprises, in which Products from Eastem Pharmacy contribute mainly (more than 70%) in the company's gross proTit Traphaco's ROE has reached 12.7% last year TRA always promotes research and development activities, especially with R&D activities, annually Traphaco averages between and 5% of revenue for this activity At the same time, Traphaco constantly promote research and development activities by investing in human resources, research cooperation and protection of Copyright of authors It can be seen that R&D is the strength of Traphaco, with new Products constantly being deployed and contributing regularly to annual revenue 2.6.2 Subsidiaries, associates, joint ventures Traphaco has subsidiaries with 100% share Capital and subsidiaries with a share Capital of 51% and 58% On October 29, 2012, TRAPHACO became a major shareholder of Quang Tri Pharmaceutical - Medical Supplies Joint Stock Company with the ownership rate of 42.91% of the charter Capital, operating in 2017, is the most modem medicine íactory in Vietnam We expect the proTit it brings in the future 2.7 SWOT Analysis Strenght Weakness Traphaco is the leading pharmaceutical The ability to manage costs is not really company in the market with business strategies: Health Vietnam, different good, still spending a lot on unnecessary According Traphaco to holds IMS or not so important activities 1.3% Asset management and equity, the market share of Vietnam pharmaceutical company has not done well, ROA and industry, and maintains its No position ROE ratios are quite low and it can be in the Eastem Medicine market While further improved if we know how to íồreign businesses are holding many invest advantages in the Westem pharmaceutical sector, Traphaco's markets choice has advantage for time, created the choosing market shows competitive At focus when niche a company to also Traphaco of on the the same the OTC difference many other of enterprises rely on wholesale Systems primarily TRA is using proactive 80% other 90% of materials farming while import from China raw of of come subsidiaries, Stock High-tech nearly Most materials Joint Traphaco when materials activities Traphaco materials domestic medicinal and raw mainly raw including Sapa of enterprises Traphaco's from in Company Joint Stock Company Opportunity Currently, the consumption trend of the people has also changed compared to a Threats Although Traphaco is strong in the Oriental medicine segment, it is weaker few years ago People tend to use more (treatment System) and OTC channel traditional medicines, or combination of In 2017, Traphaco inaugurated the most westem and westem The modem medicine Westem pharmaceutical íactory advantage of Traphaco is that it has a in Hung Yenprovince, officially investing long-standing source of medicinal herbs more in this area However, with its small and traditional medicine, Traphaco should market share in the westem make use of that source to research new pharmaceutical segment and with many product lines such as functional foods and competitors, it will be quite difficult and a herbal medicine supplements serve big challenge for Traphaco to Increasing demand of consumers Above all, the pharmaceutical industry has been receiving positive support from the State: The guidelines and policies of the State and the whole industry have always focused on developing VietnanTs longstanding with traditional the medicine continuous programs to industry improvement of enterprises in support developing medicinal areas; research and development of pharmaceutical Processing activities than other medicine companies There are in Westem many strong domestic and tồreign companies in this segment such Pharmaceutical as JSC Hau (DHG) Giang accounting for about 90% market share of domestic Products In this distribute much segment, via ETC Products channel CHAPTER3: RECOMMENDATION 3.1 Estimate and valuation 3.1.1 DCF Valuation: Free Cash Flơw to Firm (FCFF) I have chosen Free Cash Flow to Firm (FCFF) to evaluate TRA which has high leverage and high growth prospects I expect that the revenue of TRAPHACO in FY2019 will growth by 11% the assumption that consumption volume will increase by 10%, remaining steady I estimate that TRAPHACO will reach VND 361,569 million in revenue Figure 28 - Revenue íorecast in 2019 - 2023 • Capex: We assume that in the next years, TRA will expand its business by building more drug factories to achieve the goal of creating green Products to protect human health We expect Capex will grow 20% in the next years • Cost of equity: The cost of equity was calculated using the CAPM The risk-free rate of 4.9% was obtained from 10-year Vietnam Government Bond Yield (March 2019, Hanoi Stock exchange) Market retum of 18% was computed by stock price 500 days retum from 15 March 2017 to 15 March 2019.1 used the industry's beta to apply CAPM calculation in this case using the íìmction in excel I used the beta of 10 pharmaceutical companies and the market capitalization rate of each company and got the result of 0.267 Applying CAPM to the above components resulted in the cost of equity of 8.4% Table 3.1 - CAPM model Rf 4.9% Rm 18% Beta 0.267 Cost of Equity 8.4% • Cost of debt: Cost of debt is calculated by following íồrmula: Interest expenses Current debt + Long term debt When I use the Excel functions in combination with the íồrmula, I get a very small number compared to the expectations Thereíồre, I will use the calculated data in the report of PHS So, I have WACC by using íồrmula: Table 3.2 - WACC valuation Cost of debt 5.1% Equity / Total debt & equity 96.5% Debt / Total debt & equity 3.5% WACC 10.97% Terminal value: Terminal growth rate is calculated based on estimate free cash flow and use excel íìmction The final terminal growth rate is 8% which is explained more in appendix Table 3.3 - FCFF valuation Free cash flow to íirm (million of 2019F 2020F 2021F 2022F 190,861 280,900 325,758 2023F VND) FCFF 82,78 Terminal value 336,391 3,311,784 Total 82,78 190,861 280,900 325,758 3,648,175 Firm value: PV of FCFF & 2,817,915 Terminal value Number of shares outstanding 41.45 Target price 3.1.2 67,982.6 Multỉples Valuatỉon Valuation using both Forward P/E and P/B ratio P/E & P/B reílects the direct relationship between price and EPS, price and book value per share I choose peers group based on the similar characteristics with SAB in terms of product lines and tinancial performance In Vietnam, DHG, IMP, PME and DMC are the biggest competitor of TRA Table 3.4 - P/E & P/B valuation Price Weight 3.1.3 Forward P/E 76,994 50% Forward P/B 69,772 50% Target price 73,383 100% Valuatỉon Forward PE & PB of peers To, íồrecast PE & PE of peers I collect this peers’ ratios during years ago and use excel íìmction to íồrecast trend in 2019 Then, to evaluate SAB’s ratios, we use median between other company in the same industry The result for forward TRA’s PE & PB equal to 17.302 & 2.57 Eorecast EPS & Book value of TRA Because TRA has number of outstanding share is constant Therefore, ĩ evaluate similar with forecast of peers ĩ collect information from Tinancial statements of TRA and íồrecast trend The forward EPS and Book value per share equal to VND 4,450 and VND 27,170 From my prediction, the target price from Multiples Valuation is VND73,383 3.1.4 Weighting of the models Both DCF & multiples pricing are importance because each method has different strengths Thereíồre, I assign weight for DCF with 50%, multiples with 50% and reach the target price of VND 70,682 Table 3.5 - Multiples valuation Price (VND) Weight FCFF 67,982.6 50% Forward P/E 76,994 25% Forward P/B 69,772 25% Target price 70,682 100% 3.2 Recommendation 3.2.1 For investors Although I not deny the possibility of improvement in TRA's business períồrmance in the Corning years when strategic investors appear, I believe these improvements, if any, will not be reílected immediately in the next 1-3 years I will adjust my íồrecast when there are clear signs of improvement in business results Using the combined DCF and P/E & P/B valuations, my target price for TRA shares is VND 70,682 / share HOLD recommendation 3.2.2 For TRA In order to increase proíit for TRA, I suggest that TRA should not focus too much on traditional medicines and íìmctional foods, to expand and improve the períồrmance of Westem pharmaceutical factories In addition, TRA needs to expand its market share in the ETC segment, because the trend of the Vietnamese people is now to go to check-ups and buy prescription drugs, not like they used to buy prescription drugs TRA expanded more branches as well but shouldn't be too much Research and develop new Products with íìmctional foods 86 ... intelligent business analysis 1.2.3 Financial analysis Financial analysis is a set of concepts, methods and tools that allow the collection and Processing of accounting information and other management... tiscal and monetary policies to control the economy through the Central bank 1.2.2 Industry analysis Industry analysis is an assessment of a specitic industry and related companies The industry analysis. .. based on SWOT Analysis, it is not enough to assess and orient the goals For example, a long list of problems cannot be solved by strengths and weaknesses and they are also important and must be