GROUP REPORT ANALYSIS OF FINANCIAL STATEMENTS TOPIC CUU LONG PHARMACEUTICAL JOINT STOCK COMPANY

VIETNAM GENERAL CONFEDERATION OF LABORTON DUC THANG UNIVERSITY FACULTY OF FINANCE AND BANKING FINANCIAL PLANNING AND POLICY GROUP REPORT ANALYSIS OF FINANCIAL STATEMENTS TOPICCUU LONG PH

VIETNAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY FACULTY OF FINANCE AND BANKING FINANCIAL PLANNING AND POLICY

GROUP REPORT

ANALYSIS OF FINANCIAL STATEMENTS

TOPIC

CUU LONG PHARMACEUTICAL JOINT STOCK COMPANY

Instructors : Ha Tuan Anh Members:

Nguyen Thi Kim Cuc – B19H0010 Tran My Huyen – B19H0208 Nguyen Trung Hieu – B19H0194

TEACHER'S COMMENTS

1 OVERVIEW 10

1.1 General information 10

1.2 Development milestones 10

1.3 Operational Status 11

1.3.1 Distribution system 12

1.3.2 Company Position 13

1.3.3 Company's Outlook 13

1.3.4 Development Strategy 13

1.3.5 Core Values and Mission Vision 14

1.4 Companies in the same industry 14

1.5 Equity and Shareholding Information 15

2 BUSINESS PERFORMANCE ANALYSIS 21

3 COMMENTAIRE 26

3.1 Asset use efficiency analysis: 31

3.2 Inventory ratios 31

3.3 Vòng quay tài sản 31

3.4 Vòng quay tài sản cố định 32

3.5 Vòng quay tài sản ngắn hạn 33

3.6 Phân tích tỷ suất sinh lời 34

3.7 Tỷ suất lợi nhuận sau thuế trên doanh thu (ROS) 35

3.8 Tỷ suất sinh lời trên tài sản bình quân (ROA) 36

3.9 Tỷ suất sinh lời trên vốn chủ sở hữu bình quân (ROE) 37

3.10 Hệ số giá trên thu nhập (P/E) 37

• Parent company: F.I.T Group Joint Stock Company

• Subsidiaries: Benovas Pharmaceutical Joint Stock Company, VPC - SGPHARMA Co., Ltd

1.2 Development milestones

 In early 1976, Vinh Long and Tra Vinh provinces merged to form Cuu Longprovince, the health sector of Cuu Long province was established, Cuu LongPharmaceutical Factory and Cuu Long Pharmaceutical Company were born

on the basis of the book "Pharmaceuticals" of Cuu Long Tra Vinh provincetogether with a number of pharmaceuticals of Vinh Long province werereorganized to do the task of producing and distributing pharmaceuticalproducts;

 1984 Cuu Long Pharmaceutical Enterprise and Cuu Long Pharmaceutical

 1992 Cuu Long province was separated into 2 provinces of Vinh Long andTra Vinh, Cuu Long Pharmaceutical Union Enterprise continued to divideassets to establish Tra Vinh Pharmaceutical Company and re-established CuuLong Pharmaceutical Company, then Renamed Cuu Long Pharmaceuticaland Medical Consulting Company (Pharimexco) according to Decision No.538/QD-YBT dated 20/11/1992 of YBND of Vinh Long province.

 08/ 2004 Cuu Long Pharmaceutical Company transformed from a owned enterprise into a joint-stock company with the new name of CuuLong Pharmaceutical Joint Stock Company under Decision No 2314/QDUBdated August 9, 2004 of Chairman of Vinh Long Provincial People'sCommittee with initial capital of 56 Billion VND

State- 2007 Issuing additional shares for existing shareholders, Key, outsideauction with 2,500,000 shares, raising charter capital to VND81,000,000,000

 17/ 9/ 2008 DCL shares were officially listed and traded on Ho Chi MinhCity Stock Exchange

 2008 Issuing more 1,619,308 shares to pay dividends and bonus shares,raising charter capital to VND 97,193,080,000

 2009 The company implemented the first ESOP program for employees withthe amount of 194,384 to upgrade the charter capital to 99,136,920,000VND

 19/ 05/ 2015 charter capital increased to VND 100,594,800,000

 15/ 7/ 2015 the company's charter capital increased to 201,189,600,000VND

 04/ 8/ 2016 charter capital increased to 563,328,240,000 VND

 2017 charter capital increased to VND 568,328,240,000

 2021 The company issues shares for employees, upgrading its charter capital

to VND 588,328,240,000

1.3 Operational Status

 Cuu Long Pharmaceutical Joint Stock Company (DCL) was established in

1997, based on the merger and separation of two units: Cuu LongPharmaceutical Enterprise and Cuu Long Pharmaceutical Company In 2004,the company switched to operating under model shares DCL currently owns

5 factories in operation, including 4 factories meeting GMP-WHO standardsand a 40-hectare pharmaceutical farm in Binh Phuoc, a medical instrumentfactory, and a capsule factory Vicancap DCL's main business activities aremanufacturing, trading, importing and exporting pharmaceuticals, capsules,medical equipment for the pharmaceutical industry, medical, manufacturingcosmetics, nutritional foods, medicinal herbs, chemicals, raw materials andother pharmaceutical products, Manufacture of packaging used in thepharmaceutical industry, Cultivation of pharmaceutical products

1.3.1 Distribution system

 DCL's product distribution network spans all provinces and cities ofVietnam This is also a reputable and long-standing pharmaceutical supplierfor many large hospitals in Vietnam Currently, Cuu Long Pharmaceuticalhas expanded its network with a distribution system of 13 branches andmore than 55 distributors across the country

 Since the first quarter of 2015, DCL has officially become a subsidiary ofF.I.T Group JSC As a strategic sector in F.I.T's investment structure, DCL isheavily invested in both capital and human resources by the parent company.Accordingly, along with the comprehensive restructuring plan, DCL hasbeen supplemented with key human resources in administration, operation,production, sales in order to develop production and business activities.business, along with good control of debt management of the company Atthe same time, DCL continues to receive capital investment to expand andupgrade the factory and increase capacity

 With the strong investment from the parent company, DCL has set the goal

to become the leading pharmaceutical enterprise in Vietnam in theproduction of pharmaceuticals and medical equipment through continuousresearch and development of product lines new, owning advanced

machinery system, and building a professional personnel system Besidesproduction and business activities, DCL has and continues to carry out socialresponsibilities: sharing values with the community, protecting theenvironment, caring for employees, building a suitable corporate culture.with the company and the core management values of F.I.T.

1.3.2 Company Position

 DCL is a in 10 largest pharmaceutical manufacturing companies in Vietnam

 The company has 678 agents and retail pharmacies nationwide and over4,000 domestic and international customers In addition to the domesticmarket, the company's products are also exported to Cambodia, Laos,Myanmar and Nigeria

 The company is currently manufacturing and supplying to the market morethan 250 kinds of Pharmaceuticals

 The company currently has 5 operating factories, of which 4 meet WHO standards

GMP-1.3.3 Company's Outlook

 According to the forecast of the General Statistics Office of Vietnam, withthe average fertility method, the population of Vietnam will reach 102.7million people in 2029 The population growth along with the populationaging trend in Vietnam will promote the demand for medical care, the use ofpharmaceuticals

 Investment to expand Capsule Factory Phase 4, the project has beencompleted and put into operation from the second quarter of 2021 byinstalling 4 new capsule production lines, increasing capacity afterexpansion to 8 56 billion follicles/year

 Benovas medical equipment factory project started construction in the firstquarter of 2021, is expected to be completed and put into operation in thesecond quarter of 2022 The factory with a designed capacity of 300 million

products/year focuses on manufacturing medical equipment to servedomestic and export medical needs.

1.3.4 Development Strategy

 Building the Company to become one of the leading national pharmaceuticalcompanies in the field of manufacturing and trading pharmaceuticals,cosmetics, functional foods and medical equipment and instruments

 In-house product portfolio enhancement

 Expand your brand portfolio

 Cooperation in product outsourcing (CMO) or brand acquisition

 Research and invest in a pharmaceutical factory that meets EU-GMPstandards

1.3.5 Core Values and Mission Vision

1.4 Companies in the same industry

 - On the stock exchange today, the number of stocks in the pharmaceuticalindustry also has a few notable names outside (DCL - Cuu LongPharmaceutical JSC) such as:

 DMC - Domesco Medical Import Export Joint Stock Company

 DHG - Hau Giang Pharmaceutical Joint Stock Company

 DBT - Ben Tre Pharmaceutical Joint Stock Company

 OPC - OPC Pharmaceutical Joint Stock Company

 JVC - Viet Nhat Medical Equipment Joint Stock Company

 DBD - Binh Dinh Pharmaceutical - Medical Equipment Joint StockCompany

 DVN - Vietnam Pharmaceutical Corporation

1.5 Equity and Shareholding Information

1.5.1 Listed Shared

First trading day 17/09/2008

Price of the first

trading day

62,000

Initial Listing Volume 8,100,000

Current listing volume 73,041,030

Chairman of the Board of Directors Nguyen Van Sang

Member of the Board of Directors Nguyen Ngoc Bich

Member of the Board of Directors Nguyen Ninh Dung

Member of the Board of Directors Tuong Thi Thu Hanh

Member of the Board of Directors Bui Hong Hanh

Member of Supervisory Board Le Thi Thuong

Member of Supervisory Board Pham Thi Hue

Member of Supervisory Board Phan Thi Hoa

Chief Financial Officer Nghiem Xuan Truong

Information disclosure representative Nguyen Ngoc Bich Ly

1.5.2 Organizational Structure

1.5.3 Top 10 Shareholder

n

Number of shares

Ownership rate

Update day F.I.T Group Joint Stock

Company

Duong Thi Minh Nguyet - 3.000.000 4,11% 16/03/2022

1.5.4 Shareholder Structure

 State ownership : 0,00%

 Foreign ownership: 0,00%

 Other ownership : 100,00%

1.5.5 base structure

General analysis and financial situation

2 BUSINESS PERFORMANCE ANALYSIS

The IQVIA Institute has classed Vietnam as a Pharmerging Market Vietnam isthird on the list, trailing only Argentina and Pakistan in terms of growth rate

Vietnam's population is aging at an unprecedented rate Compared to othercountries, Vietnam only needs 18 years for the population over 65 years old toincrease from 7% to 14% of the population, shorter than Thailand, Japan, Australiaand France In the period 2026-2039, Vietnam will enter a period of populationaging (the population aged 65 and over will exceed 15% of the total population by2039)

According to GSO, the population over 60 years old will be 21 million people,equivalent to 20% of the total population in 2038 and 27 million ~ 25% of the totalpopulation in 2050

Vietnam has a very high death rate from non-communicable diseases in 2019compared to other countries (81% vs Singapore: 75% vs Thailand: 77% vsIndonesia: 76% vs Malaysia: 73% vs Philippines: 70%) This rate in Vietnam istrending up in recent years.

On average, a person aged 65 and over in Vietnam has at least 3 diseases, whilepeople over 80 years old have an average of 6.9 diseases each Currently, the cost

of medical examination and treatment of the elderly is 7-10 times higher than that

of young people

Vietnam's healthcare market will be worth $16.2 billion in 2020, accounting for6.0% of GDP Spending on health is expected to reach USD 23.3 billion in 2025and USD 33.8 billion in 2030, at a CAGR (2020-2030) of 7.6% Commitment touniversal health care in the country will drive industry growth in the future Thegovernment has set a target that by 2025, 95% of Vietnam's population willparticipate in national insurance This figure in 2020 is 90.85%, ensuring theability to achieve the goal is very high

Government efforts to make healthcare more accessible and affordable has beenone of the driving forces behind the industry's growth The government aims toreduce the proportion of out-of-pocket medical fees per household to 35% by 2025and 30% by 2030 Currently, this rate is 43%, more than double the proposed level

of WHO (20-30%)

Pharmaceutical sales are expected to reach $7.51 billion by 2025, accounting forabout 1.78% of GDP and 32.2% of the target for health care, with a CAGR (2020-2025) of 8%.

The driving force of the pharmaceutical industry in the long term is the investment

of multinational pharmaceutical companies, improving the quality of medicalexamination and treatment, and expanding the social and demographic healthinsurance of the country

Prescription drugs are expected to account for an increasing share of totalpharmaceutical sales in the coming years, driven by rising demand for treatment,the rollout of national health insurance, rising incomes, and infrastructure Betterhealth care and the development of generic drugs Prescription drugs are forecast

to reach USD 5,754 billion by 2025, accounting for a significant proportion of76.6% of total drug sales, at a CAGR (2020-2025) of 8.4%

Table 3.1: Analysis of fluctuations of DCL's asset items in 2018-2020 (Unit: VNDmillion)

Data and proportion of items in the balance sheet of DCL Pharmaceutical JointStock Company in the period of 2019 – 2020

Đầu tư dài hạn 1,000,000 0.06% 1,000,000 0.06% - 0.00%

Giá trị thuần đầu tư ngắn hạn 39,620,798 4.73% (221,952,698) -25.28%

Các khoản phải thu (495,171) -0.17% (55,102,585) -19.08%

Trong đó: Khoản phải thu

Year 2019 compared to 2020

Size of assets and capital resources of the business: an increase scarcely of

87,936 million VND (equivalent to 5.14%) In which, the short-term assets rose by4.77% (about 65,600 million VND) corresponding to the calculated weight 80.39%

to 80.11% and long-term assets increase noticeably by 6.65% (about 22,336million VND) Besides that, owner's equity increased moderately by 9.79%,making total resources rise 5.14%

Concerning the source of capital: Owner's equity increased by 86,573 million

dong, equivalent to the gain of 9.79% due to the increase in wealth and researves(9.79%) and undistributed earnings (27.25%) The increase in liabilities from828,049 million VND to 829,411 million VND, corresponding to the proportion(0.16%), is mainly due to the reduction of short-term trade payables (-34.08%)

❖ Short-term assets

Cash and cash equivalents: Increased 27,379 million VND (about 188.83%).

Most of these items increased due to the reduction of debt receivables and

recovered profits from short-term investments We can see the proportion of cash

in 2019 is 0.85% and will increase to 2.33% in 2020

Short-term investments: The main reason for the slight increase in short-term

investments from 838,255 million VND to 877,876 million VND with a risingpercentage difference of 4.73

Short-term receivables: receivables decreased slightly by 495 million VND, the

difference decreased by 0.17%, showing the feasibility of debt collection, mainlydue to reducing customer receivables is -12.93%

Inventory: concentrating primarily on raw material items, the company reserves in

advance and provides some before the goods Inventory decreased slightly andremained at a difference of -0.04%, about 93,949 million VND, because of thesupplier for COVID patients

❖ Equity

Increased by 109,299 million dongs, equivalent to 7.83% compared to 2017 Thisshows that the plan to mobilize capital is quite good Investors and owners arelooking forward to the company's future development

§Year 2020 compared to 2021

Size of assets and capital resources of the business: an increase scarcely of

-19,378 million VND (equivalent to -1.08%) In which, the short-term assets godown by -12.55% (about -181,062 million VND) corresponding to the calculatedweight 80.11% to 70.81%, and long-term assets increase noticeably by 45.14%(about 161,683 million VND) Besides that, Owner's equity increased moderately

by 5.22%, but making total resources decreased -1.08%

Concerning the source of capital: Owner's equity increased by 50,674 million

dong, equivalent to the gain of 5.22% due to the increase in wealth and researves(5.22%) and undistributed earnings (24.20%) The decrease in liabilities from829,411 million VND to 759,357 million VND, corresponding to the proportion (-8.45%) is mainly due to the increasing of short-term trade payables 16.45%

❖ Short-term assets

Cash and cash equivalents: Decreased 622,670 million VND (about -1.49%).