CORPORATE FINANCE 2022 (1)

CORPORATE FINANCE 2022 DANANG UNIVERSITY OF ECONOMICS CORPORATE FINANCE 2022 VIETJET AVIATION JOINT STOCK COMPANY INFORMATION : Early outsourcing efforts were primarily confined to manufacturing activities. Increasingly, however, companies are taking advantage of modern communications technology, particularly the Internet, to outsource service activities to lowcost producers in other nations

DANANG UNIVERSITY OF ECONOMICS

Lecturer: Ms Thai Thi Hong An

Prepared By: Group 4 - 46K01.3

Tran Dinh Dinh Le Thi Khanh Ha Ho Nguyen Ngoc

Dinh Thi Phuong Thao Tran Thi Them

INFORMATION

Lecturer: Ms Thai Thi Hong An

Article name: Financial Statement Analysis – VietJet Aviation Joint Stock

Dinh Thi Phuong Thao

Tran Thi Them

Language: English

TABLE OF CONTENTS

IMAGE LISTS

TABLE LISTS

I General information about VietJet Aviation Joint Stock Company

I.1 Corporate profile

• English name: VIETJET AVIATION JOINT STOCK COMPANY

• Abbreviated name: VIETJET., JSC

• Trade name: VIETJET AIR

• Business code: No 0102325399 issued by Ha Noi

Department for Planning and Investment

 First registration: 27 November 2007

 28th amendment: 08 January 2020

• Air Transport Business License: No 04/2016/GPKDVCHK dated 30/12/2016

• Head Office: 302/3, Kim Ma Street, Ngoc Khanh Ward, Ba Dinh District, Ha Noi,

Vietnam Operating Office: VietJet Plaza, 60A Truong Son, Ward 2, Tan Binh

District, Ho Chi Minh City, Vietnam

• Website: www.vietjetair.com

• Slogan: Save More, Fly More

• Charter Capital: VND 5,416,113,340,000 (Five trillion, four hundred sixteen

billion, one hundred thirteen million and three hundred forty thousand Vietnam

Dong)

• Total common shares (on December 31, 2021): 16.874.210.320.480

• Stock code: VJA (listed on Ho Chi Minh city Stock Exchange - HOSE)

• Face value: 10,000VND/ Share

• The Fiscal Year: from January 1 to December 31

• Financial Statement Auditor:

 Currently: PwC (Vietnam) Company Limited

 Former: KPMG Vietnam Company Limited

• VJA Stock transaction in 2020:

 Opening price at the beginning of the period: VND 125,800/share (January 4,

2021)

 Closing price at the end of the period: VND 128,300/share (December 31,2021)

Figure 1 Logo of Vietjet Air corporation

 Average trading volume: 820,000 shares/session

• Vision:

To become a global airline group with an extensive regional and worldwide flightnetwork, providing not only airline services but also consumer services acrossadvanced e-commerce platforms; a trusted and highly prestigious brand in the eyes

of travelers all over the world

• Mission:

 To continuously expand our flight network nationally, regionally, and globally

 To bring innovation to airline services

 To make air travel the most popular form of transportation for Vietnamese andall people around the world

 To bring happiness and satisfaction to our customers by offering outstandingservices, always with a friendly smile

I.2 Core business of VIETJET

VietJet has built a closed and connected supply chain of aviation services from Upstreamoperations to core operations and downstream operations and continuously invests inquality

I.2.1 Upstream activities

Manufacturer: VietJet establishes strategic relationships with Airbus and Boeing, the two

largest aircraft manufacturers in the world through large value commercial contracts withmany incentives

Aircraft leasing: Providing wet leasing, dry charterng of aircraft and trip chartering services

for travel agencies

Airport service: VietJet is always looking for investment opportunities to proactively

provide ground services at airports, payment services, repair services and specializedaviation training

I.2.2 Core activities

Air transport: Passengers and cargo transportation services are the core service segment of

the airline from the early days of its establishment till now

I.2.3 Downstream activities

Distribution services: Invest and/or become strategic partners with travel service providers,

freight service companies such as Viettel Post, VNPT, UPS,

I.2.4 The process of formation and development of VietJet Aviation Joint Stock Company

VietJet Aviation Joint Stock Company is the first private airline in Vietnam VietJet is anofficial member of the International Air Transport Association (IATA) with the IATAOperational Safety Audit (IOSA)

• 2007: Obtained an Air Operator Certificate No 01/0103018458.

• 2011: Launched the first commercial flight from Ho Chi Minh City to Ha Noi on

24 December

• 2012:

 Launched Vietjet’s new slogan “Enjoy Flying”

 Expanded domestic flight network to six new destinations including Vinh, DaNang, Nha Trang, Da Lat, Phu Quoc, and Hai Phong

• 2013:

 Inaugurated the first international route from Ho Chi Minh City to Bangkok(Thailand)

• 2014:

 Launched VietJet Cargo Joint Stock Company

 Launched Thai VietJet Joint Stock Company

• 2015:

 Inaugurated VietJet Training Center

 Achieved IATA Operational Safety Audit certificate from International AirTransport Association (IATA)

• 2016:

 Signed an agreement to establish an Airbus Training Center in Vietnam

 Officially became a member of International Air Transport Association (IATA)

• 2017:

 Listed company’s shares on Ho Chi Minh Stock Exchange (HOSE)

 Attended APEC Da Nang Summit

• 2018:

 Signed MOU (Memorandum of Understanding) for long-term enginemaintenance service with CFM International Signed a USD 7.3 billionagreement with Safran - CFM, GECAS in France.

• 2019:

 Reached the milestone of 100 million domestic and international passengers

 Expanded flight network with 139 routes including 44 domestic routes and 95international routes

 Officially became a member of the Japan Business Federation - Keidanren

• 2020:

 VietJet has been recognized as the "Best low-cost carrier of the year" and the

"Best belly carrier of the year" for its outstanding cargo transport in 2020 byPayload Asia - an international magazine for the air freight industry

• 2021:

 The 10th anniversary of taking off the first flight (December 24, 2011 –December 24, 2021)

II.Aviation industry

II.1 Aviation industry in Vietnam

In 2020, Vietnam had 9 international airports, managed by the Airports Corporation ofVietnam (ACV), and was ranked in second place among Southeast Asia, just behindIndonesia with 34 international airports with the number of registered aircrafts is 218, with

138 international route and 50 domestic routes

From 23.7 million passengers in 2011 to 61.2 million in 2017, the size of the entireVietnamese aviation sector (including international traffic) expanded by 2.6 times 63foreign airlines operating international flights to Vietnam from 25 differentcountries/territories are a part of the Vietnam aviation transport market 105 internationalroutes are being utilized by foreign airlines as well as 3 Vietnam Airlines subsidiaries:Vietnam Airlines, Jetstar Pacific Airlines, and VietJet

According to estimates, Vietnam's GDP is supported by the air transport sector, whichincludes airlines and its supply chain, to the tune of US $2.6 billion An additional US $9.9billion of the country's GDP is supported by international visitor spending, for a total of US

$12.5 billion The inputs to the air transport sector and foreign visitors who arrive by aircontribute 5.2 percent of the nation's GDP overall The main market for passenger shipments

to Vietnam is the Asia-Pacific region, followed by Europe and North America 95% of allpassengers arriving in Vietnam came from the Asia-Pacific region (41.3 million), 2.9

percent came from Europe (1.3 million), and 766,000 came from North America (1.8percent).

According to the research of britchamvn, Vietnam is the fastest growing country forpassengers with 7,8% from 2017 to 2040 It shows the great development potential of thecountry's aviation industry in the future

II.2 Competitive environment and the key competitors

II.2.1 Competitive Environment Analysis through Michael Porter's five forces

II.2.1.1 Rivalry of Existing Players is high

Large barriers to leaving the industry: Due to the characteristics of the industry, there is a

large investment in fixed assets and these assets are unlikely to be used for other industries,making the barrier to leaving the industry high Besides, most of the investment capital used

is debt, so leaving the industry is quite difficult because long-term loan contracts bindcompanies to continue operating

Low cost of switching between businesses: The services provided by air transport

businesses are generally not too different, so no airline can dominate the industry marketshare This results in customers being able to switch service usage between businesseseasily

II.2.1.2 Threats from Substitute Products is low

In addition to aircraft, passengers can choose other vehicles such as cars, buses or trains.The conversion costs between these vehicles are not large (thanks to the low -cost aviationmodel), whereas the biggest cost to trade is time Up to the present time, the aircraft is thefastest means of transportation in transportation methods With an average speed of over

1000 km/h depending on the type, the air transport vehicle has left rivals in the industry,becoming the first choice in terms of transport time Along with that, the current socio-economic pace in which time is a decisive strategic factor, air transport has become moreand more popular and holds the number one priority Moving by plane is increasinglyproving the advantages of time and convenience compared to other vehicles In addition,infrastructure in Vietnam creates great obstacles for trains, buses compared to aircraft.Compare price competitiveness and time between vehicles with cheap aviation, if the pricedifference is not large, passengers will tend to choose cheap aviation services to save time Air transport is virtually the only option for transporting passengers abroad This is anabsolute advantage of the industry over alternative products In terms of freight, the itemsthat airlines are shipping today are mostly high-value products These items need to bestored and shipped faster to match market trends

II.2.1.3 Threats of New Entrants is low

The airport infrastructure does not meet the overheated growth of the aviation industry:

Aviation is a conditional business, which regulators will license based on existing

infrastructure or in the near future If the infrastructure is overloaded, airlines will be limited

in the number of flights and time frames, from which the establishment of new airlines will

be affected and face strict regulations

Costly investment: Aviation industry requires significant fixed asset investments, regardless

of the circumstance, airlines must always pay these substantial charges, including rent, thepurchase of an airplane, interest payments, the salaries of thousands of workers, and securityexpenses The creation of an airline requires huge time, effort, and financial resources Inaddition, the initial investment of an aviation carrier is relatively long, requiring newbusinesses to have a fleet, crew, and experienced flight staff Therefore, airlines are oftenvery large compared to other businesses

Strict licensing process for new airlines in Vietnam: Currently, the airport infrastructure is

overloaded, the Ministry of Transport is very strict in the flight permit for new businesses.Vietstar Airlines, for instance, Vietstar Air's profile was "delayed" due to the situation ofaircraft apron shortage in Tan Son Nhat

II.2.1.4 Bargaining Power of Suppliers is high

High concentration from suppliers: Vietnam currently does not have aircraft

manufacturers, airlines, we must order from major manufacturers of the world such asBoeing, Airbus Currently, Airbus accounts for most of the aircraft supply market share inVietnam However, there is no aircraft manufacturer with a product line suitable for low-cost aviation models like Airbus, the position of this aircraft manufacturer for air carriers ishigh

Leasing sector: Currently, Vietnam has only one enterprise, Vietnam Aircraft Leasing Co.

(VALC) owned by Vietnam Airlines with 32% capital VALC buys and then leases theaircraft to domestic airlines, with the main customer being Vietnam Airlines

Aircraft transportation and maintenance service: The airlines usually have to sign a long

-term contract with a taxi and bus company, as well as the supplier aircraft maintenance.These are all big partners, with strength in the market and the company has to go throughmany negotiations with them to sign a contract, so terminating a contract with one supplier

to transfer to another is difficult and the conversion costs are high

Aviation infrastructure: The characteristic of the aviation transport industry is to use

airports as aircraft parking, waiting for passengers… Besides, the two large airports inVietnam, Tan Son Nhat and Noi Bai are both overloaded, the supply does not meet thedemand

II.2.1.5 Bargaining Power of Buyers is low

Currently, with the more participation of private airlines, customers have more choices.Customers initially have a voice about upgrading service quality or lowering product costsand have the right to choose between airlines However, currently Vietnam's aviation

industry has only 5 companies while passenger output through Vietnamese airports reached116.5 million passengers in 2019 (baocaochinhphu.vn), so the power of customers is stilllimited In the future, as the aviation industry is growing stronger with the more accession ofnew aviation, it is forecasted that the power of the buyer will be higher than the present

II.2.2 The key competitor of Vietjet air

II.2.2.1 Overview 4 key competitors of Vietjet Air

Vietnam currently has seven aviation companies, which includes four commercial airlines,Vietnam Airlines, Vietjet Air, Jetstar Pacific, and Vietnam Air Services Company (Vasco).Vietnam Airlines and Qantas entered a joint venture to operate Jetstar Pacific, while VietJetentered the market in 2011 Vietnam airlines still account for 40% market share, followed byVietjet (34%), Bamboo airways (18%), Jetstar Pacific (4%) and Vasco (3%) in the first 4months of 2022 Vietnam Airline is still the largest competitor with any other airlines interms of market share And the market share becomes more competitive when there is theappearance of Bamboo Airways in Jan 2019

Figure 2 Aviation market share based on number of flights in Vietnam from 2021 to the first 4 months of 2022

• Vietnam Airlines is the national flag carrier and is wholly owned by thegovernment Vietnam airline possesses is member of the Sky Team alliance,Skytrax4 star

 Aircraft In Service: 92

 Aircraft On Order: 21

 Operating 60 international flight routes, 33 domestic flight routes

• Jetstar Pacific is the Vietnam’s first low-cost airline with 70% owned by VietnamAirlines and 30% by Qantas And it possesses International Operational SafetyAudit (IOSA) certificate granted by IATA (USA)

 Aircraft In Service: 20

 Operating 13 international flight routes, 23 domestic flight routes

• Vietnam Air Services Company (Vasco) is Fully owned subsidiary of VietnamAirlines Vasco provide passenger flights, charter flights, medical evacuations,SAR operations, oil platforms flights, and other aviation services

 Operating 9 domestic flight routes

 Has 1 operated international flight routes, 22 domestic flight routes

III VietJet Air’s strategies to generate returns in the context of economic and

industry conditions:

III.1.Marketing Strategies

III.1.1 Product:

VietJet Air focuses on three main ticket classes with different prices and service quality:

• Skyboss class: The ticket class with the highest price and provides most specialoffers such as changing the passenger’s name, using the VIP lounge, havingpriority check-in procedures, etc

• Deluxe class: The ticket class with many convenient utilities which is narrowerthan ones of Skyboss class For example, passengers are not provided access toVIP lounges, private airport shuttles, priority check-in procedures, etc

• Eco class: A normal economy ticket class with average price This is the selling ticket class because the price is affordable for most people’s economicconditions However, this kind of ticket class does not provide most utilities such

best-as changing the pbest-assenger’s name, refunding tickets, free- using checked baggage,etc

While Eco Class is quite a good choice for most passengers when solving the need to travelwith a suitable price, Skyboss and Deluxe class are improved quality services and stronglycommunicated to attract the high-value customers VJA has paid a lot of attention to airtransport that is why passenger transportation accounts for 80% of the parent company’srevenue

Besides, VietJet Air has diversified revenue from ancillary services such as express freight,sales of goods and services in-flights, etc

III.1.2 Price

VJA has pursued a ‘Low-cost carrier’ strategy which emphasizes on minimizing costs togain the low fare In specific, VietJet optimized its costs through only operating narrow-

amount of operating costs, fuel costs as well as costs of meals and rest for the flight crew.Moreover, VJA separates ticket prices with checked luggage and meal service to offer acompetitive price for Eco Class tickets compared to its competitors

In addition, VJA has also implemented tons of discount promotions on golden hour frames

as well as special occasions to attract customers

Figure 3 Marketing banner of Vietjet Air

Overall, ‘Low-cost carrier’ strategy is reasonable and suitable to Vietnam's social economicsituation, where people's income is at average level and the demand for air travel has beenincreasing Also, this pricing strategy contributes to the competitive advantage of VJA andcreates a unique brand image

III.1.3 Place

Vietjet has expanded the route network throughout Southeast Asia and Northeast Asia, with

139 routes (48 domestic routes and 95 international routes) to more than 70 destinations in

14 countries: Russia, Cambodia, China, South Korea, Japan, Hong Kong, Macau, Taiwan,Indonesia, Malaysia, Myanmar, Thailand, India and Singapore In the domestic market,Vietjet has representative offices at 18 airports, in which the main airports include: HAN,SGN, DAD, PQX, CRX

VJA diversified its distribution system to optimize revenue Whereas Vietjet operates avariety of direct distribution channels such as online channels (official website, ), indirectdistribution is used by VJA allowing customers buying flight tickets through agents,ecommerce platforms, apps,

“Love connection - Love is real touch” By defining the brand as a new-generation airlinewith low budget, Vietjet Air aimed to create conditions for everyone to access These kinds

of campaign results in an increase of both revenue and brand awareness VJA alsoconducted several controversial ads, the typical one is ‘Bikini Airlines’, however, thesecampaigns eventually contributed significantly to VJA’s strong growth and absolute brandrecognition in customers' minds

VJA has also taken advantage of public relations through implementing many meaningfulactivities toward the community such as ‘rescue flights’ in the Covid-19 pandemic, ‘A cozyTet for you’ program supporting disadvantaged children in rural areas, etc

In addition, with VJA’s direct marketing strategy, customers can register to receivepromotional information via email, on the website, or Facebook quickly; they also can calldirectly through the switchboard to receive information; questions also can be solved whencustomers ask on the website

III.1.5 People

Vietjet's human resources are selected from more than 30 different countries, throughcareful recruitment procedures and training programs to ensure employees have enoughessential skills and experience before joining in this industry Besides, VJA focuses ondeveloping employee, salary, and management programs for better performance In terms ofcustomer services, VJA also receives a lot of love from customers contributing to revenuegrowth, for example, the online flight booking service of VJA has satisfied customers by thefast speed and high accuracy

III.1.6 Processes

VJA has created the value proposition to customers by quick and consistent processes such

as booking and payment process, air ticket refund process, complaint, and compensationprocess, etc Although the flight delay occurs commonly and is one of the disadvantages ofVJA, most customers choose VJA because of its other benefits

III.1.7 Physical evidence management

VJA effectively combined physical evidence including: physical environment (expressedthrough ticket counters and check-in areas, lounge, in-flight service, in-flightentertainment); corporate branding; consistency (reflected through main color, slogan,

“cheap” factor); ambiance (includes a number of factors such as uniforms, employee

attitudes, flight support equipment ) These all add more value and contribute to the overallcustomer experience

III.2.Positioning strategies

VJA is a low-cost airline, focusing on young, dynamic customers, first-time flyers, andmiddle-income segments Customers who are proficient in technology such as email, socialnetworks, and online payment forms (visa, master card, etc.) and have a favor of regularlytraveling have proper charge With the slogan "Fly with Fun", VJA gives its passengers theexperience of cheap flights, “0 VND” flights with good service and dynamic hostesses andbringing passengers interesting things on flights

IV Key assets and liabilities

IV.1 Key assets

Calculation unit: million VND, %

Vietjet Aviation Joint Stock Company’s asset structure 2017-2021

As can be seen from the table, Vietjet Aviation Joint Stock Company’s total assets witnessed

an upward trend from 2017 to 2021 despite a small drop of 7.49% in 2020, caused by asharp decrease in non-current assets

Outstandingly, the structure of current assets/non-current assets shifted from55.81%/44.19% in 2017 to 48.81%%/51.19% in 2018 and 49.94%/50.06% in 2019,showing that a gradual transition to non-current assets, creating stability in the financialstructure in accordance with Vietjet’s strategy on gradual expansion of owned aircraft andincreasing efficiency for business activities in the long run

IV.1.1 Current assets

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Other

current

assets

315,006 1.79 356,105 1.87 446,029 1.82 243,836 0.96 66,662 0.25

Current asset structure of Vietjet Aviation Joint Stock Company 2017-2021

Current assets of Vietjet Aviation Joint Stock Company come from 5 sources: Cash & cashequivalents, short-term investments, short-term receivables, inventories and other currentassets Especially, short-term receivables always accounted for the largest proportion, whichcould be considered as the main source contributing to Vietjet’s current assets

Other current assets 13.05% 25.25% -45.33% -72.66%

Current assets’ volatility 2017 - 2021

Generally, Vietjet’s current assets increased gradually from year to year It witnessed asignificant rise in 2019 compared to 2018’s figure, which increased by 28.19%

In 2019, Vietjet’s consolidated revenue reached VND 50,602 billion, which about 99.99%was non-cash revenue, resulting in a significant drop in cash & cash equivalents from theperiod of 2018-2019 Meanwhile, short-term receivables are recorded to go up during the 5-year period

In 2017-2018, Vietjet’s short-term financial investments rose dramatically by 58250%thanks to the appearance of trading securities And then, there were some ups and downs inshort-term investments in the next three years Similarly, the data of inventories and othercurrent assets also showed some fluctuations

IV.1.2 Non-current assets

Calculation unit: million VND, %

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Non-current

assets 13,989,621 100 20,006,886 100 24,400,204 100 19,814,061 100 24,786,971 100

Long-term

receivables 7,152,674 51.13 10,577,336 52.87 14,969,725 61.35 12,969,528 65.46 16,889,287 68.14Fixed assets 1,528,720 10.93 1,646,373 8.23 1,304,424 5.35 850,496 4.29 1,158,451 4.67

Non-current asset structure of Vietjet Aviation Joint Stock Company 2017-2021

Non-current assets of Vietjet Aviation Joint Stock Company come from 5 main sources:Long-term receivables, fixed assets, long-term asset in progress, long-term investments andother long-term assets Obviously, the majority of non-current assets are from long-termreceivables (which always makes up more than 50% over the period)

2017-2018 2018-2019 2019-2020 2020-2021

Non-current assets 43.01% 21.96% -18.79% 25.10% Long-term receivables 47.88% 41.53% -13.36% 30.22% Fixed assets 7.97% -20.77% -34.80% 36.21% Long-term asset in progress 452.84% 6.93% -39.00% -37.73% Long-term investments 0 215.64% -8.22% -24.62% Other long-term assets 29.18% 1.70% -24.27% 21.99%

Non-current assets’ volatility 2017 - 2021

At the first glance, there is a fluctuation in the data of Vietjet’s non-current assets from 2017

to 2021

Remarkably, non-current assets witnessed the largest growth from 2017 to 2018, with anincrease of 43% due to VJA pursued strategy on gradual expansion of owned aircraft andincreasing efficiency for business activities in the long run Long-term trade receivableswere VND10,577 billion, up 47.88% over the same period, mainly due to increasedcontributions to the aircraft maintenance reserve, deposits to aircraft purchase that will bereceived after 12 months, and aircraft lease deposits

On the other hand, in the period 2019-2020, all the figures for long-term receivables, fixedassets, long-term assets in progress, long-term investments, and other long-term assetsdecreased sharply in 2020

IV.2 Liabilities

Calculation unit: million VND, %

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

Value (million VND)

Rati o (%)

Value (million VND)

Ratio (%)

Value (million VND)

Ratio (%)

59.6 5

Liabilities structure of Vietjet Aviation Joint Stock Company 2017-2021

Liabilities’ structure: current liabilities is the main source contributing to Vietjet’s liabilitiesyear over year except for 2021, when non-current liabilities accounted for 55.04%,considered as the main source

The majority of current liabilities come from short-term borrowings, which are mainly fromborrowings from banks and related parties Most of non-current liabilities are fromProvisions - long-term, which includes provision for maintenance expenses and provision tomake good on leased assets

2017-2018 2018-2019 2019-2020 2020-2021

Current liabilities 7.39% 28.31% 3.46% -21.74% Accounts payable to suppliers 64.86% 105.15% 80.57% -5.27% Advances from customers 50.91% -2.71% 15.36% -29.50% Taxes payable to State Treasury 117.96% 129.42% -37.45% -1.65% Payable to employees - - - 29.76% Accrued expenses 41.77% -40.90% -24.21% 7.08%

Unearned revenue 39.09% 16.54% -72.75% -56.02% Other short-term payables 43.37% 2.19% -1.95 -31.19% Short-term borrowings -28.12% 64.61% 23.69% -27.49% Provisions - short-term 30.26% 5.96% -7.94% -29.48% Bonus and welfare fund - - - -

Non-current liabilities 41.30% 46.30% -29.77% 85.63% Other long-term payables 18.06% 337.40% -40.11% 20.00% Long-term borrowings -8.72% 539.93% -63.21% 504.31% Deferred tax liabilities 154.01% 5.24% -82.81% 127.82% Provisions - long-term 43.67% 16.57% -16.25% 22.45%

Liabilities assets’ volatility 2017 - 2021

Generally, there is an upward trend pattern seen in the figures for Vietjet’s liabilities in spite

of an 11.01% decline in the year 2020, which was caused by VJA’s returning of 6 wet-leaseaircraft

The current liabilities in general witnessed the highest increase in 2019 Besides, there were

an appearance of payable to employees in 2020 and bonus & welfare fund in 2021, whichcontributed to the amount of Vietjet’s current liabilities

At the end of 2021, non-current liabilities reached a peak of 85.63% increase thanks to asignificant increase in long-term borrowings (by 504.31%) as well as deferred tax liabilities(by 127.82%)

V Provide the sight in the company’s main sources of income

Vietjet’s revenue comes from five main business activities: air transport, ancillary services,direct supporting services to air transport, aviation education and training, aircraft trading, inwhich air transport is the core activity bringing revenue of Vietjet

Calculation unit: million VND, %

% Increase or decrease

2017 2018

2018 2019

2019 2020

-2020 - 2021

53,577,24 1

50,602,93 6

18,220,29 3

50,602,93 6

18,220,29 3

12,874,92

0 26.652 -5.55 -63.99 -29.34Gross profit

6,549,397 7,491,819 5,622,795 -1,411,928 -2,038,804 14.39 -24.95 -125.11 44.4

Net operating

profit 5,298,448 5,808,899 3,847,640 -2,017,567 171,956 9.63 -33.76 -152.44-108.52Other profit 4,191 7,029 721,011 1,773,074 8,423 67.72 10157.66 145.91 -99.52

Profit before

tax 5,302,639 5,815,929 4,568,651 -244,493 180,380 9.68 -21.45 -105.35 -173.78Net profit

after tax 5,073,651 5,335,090 3,807,345 68,665 79,659 5.15 -28.64 -98.197 16.01

Income volatility of Vietjet Aviation Joint Stock Company 2017-2021

In the year 2017, total revenue and netprofit after tax were about 42,302 billionVND and 5,073 billion VNDrespectively There were 17.11 millionpassengers transported over the year - anincrease of 21.77% in comparison with

2016 At the end of 2017, Vietjet’sdomestic market share reached 43% and

it became the leading airline in Vietnam

In 2018, Vietjet reached a peak ofrevenue of around 53,577 billion VND,

up 26.65% over 2017, in which therevenue from passenger transportaccounted for the highest in Vietjet'srevenue in 2018 Profit before taxgained nearly 5,816 billion VND,roughly 9.68% higher than the previousyear Net profit after tax stood at about5,335 billion VND, an increase of5.15% after one year

Vietjet's business results in 2019 recorded revenue of approximately 50,603 billion VND,down 5.55% from 2018 Similarly, profit before tax decreased by 21.45% over 2018,gaining about 4,569 billion VND Net profit after tax reached about 3,807 billion VND,down almost 29% over the same period The decrease in revenue was mainly from thedecrease in aircraft sales compared to previous years (in 2018, the company sold 16aircrafts, but in 2019, the company sold only 7 aircrafts)

The year 2020 saw a sharp decrease to around 18,220 billion VND in revenue of Vietjet Inspecific, profit before tax reached a bottom of about -244 billion VND, down almost -106%over the same period Similarly, net profit after tax hit the lowest point of nearly 69 billionVND in 2020 The reasons for this plummeting are:

• 2020 is considered a particularly difficult year because the Covid-19 pandemic hasgreatly affected not only the domestic aviation but also the world aviation

Figure 4 Vietjet Aviation Joint Stock Company's revenue and profit

2017-2021

• Flight restrictions and social distancing have caused international and domesticflights to be suspended The airline market is also facing difficulties when lowtourism demand leads to a decrease in passenger numbers.

However, Vietjet still persevered in operations and made important contributions to thecountry

• Implement a series of programs "Charity flights to beloved Central region" tosupport citizens during the severe typhoon, such as transporting relief goods orpeople working in the Central region for free as well as donating 10.000 VND forevery ticket sold

• Implement the passenger rescue campaign to bring more than 15.000 Vietnamesecitizens back from all over the world

• Transport thousands of tons of essential goods, epidemic prevention medicalequipment for the country, and donating more than 2.5 million medical masks tothe UK, France, Germany and the US to support Covid-19 prevention

In 2021, revenue continued its downward trend to stand at approximately 12,875 billionVND By contrast, profit before tax and net profit after tax saw a rise again, with around

180 billion VND and 80 billion VND respectively

• Continuing to be affected by the Covid-19 epidemic

• But in October, the epidemic was gradually controlled, and flights were graduallyrestored

• Profit increased thanks to impressive growth in goods transportation (200%)

• Introduce new products and services Skyboss, Powerpass, and Deluxe to increaserevenue and profit

• Cooperating with international air such as UPS, DHL to expand the area toincrease revenue and profit of Vietjet

• Continue flights to bring Vietnamese citizens back from abroad, free transportation

of masks, vaccines to support the prevention of Covid-19 epidemic

• Free transporting of thousands of doctors to epidemic areas on working