Company analysis on real estate corporation and comment on the vietnam real estate market

ASSIGNMENT COVER SHEET University of the West of England MSc in Finance and Investment Student ID: 20381354 Student Name: VUONG THANH PHONG Module Code: Module Name / Title: Dissertat

BACKGROUND OF STUDY

The young real estate market in Vietnam, an emerging Asian economy, has shown significant growth and presents an attractive investment opportunity However, this sector is marked by instability and a heightened risk of earnings management, especially among real estate companies listed on the Vietnamese stock market To promote the development of Vietnam's real estate market and improve the transparency and insight of the stock market, there is an urgent need for more detailed and analytical valuation reports on these companies.

Financial analysis is essential for business development, and I have utilized my extensive knowledge of financial statement analysis and business valuation methodologies in my research This study focuses on analyzing the macroeconomic environment and determining the intrinsic value of four leading companies in Vietnam's real estate sector It provides a comprehensive valuation report, assessing the current market state, evaluating recent company performance, and offering solutions and recommendations to enhance corporate value and reduce costs.

In the wake of the Covid-19 pandemic and uncertainties in the Vietnamese market, particularly concerning companies like FLC, Van Thinh Phat, and Tan Hoang Minh, the real estate sector has undergone significant fluctuations Emerging economies, including Vietnam, have positioned their real estate markets as key investment channels for both local and international investors aiming to diversify portfolios Despite the sector's growing importance, there is a notable lack of comprehensive studies and analyses on real estate companies Publicly listed companies in this sector offer investors more accurate and actionable information through their valuations, unlike their non-listed counterparts.

This study seeks to make a meaningful contribution to the existing literature on property However, it acknowledges limitations concerning time constraints and the breadth of knowledge Therefore, I welcome insights from academic advisors to improve and elevate the quality of this research.

AREA OF STUDY

This study provides an in-depth financial and valuation analysis of the real estate performance of four prominent corporations listed on the Vietnam Stock Exchange: Vinhomes Corporation, Khang Dien Homes Company, Nam Long Group, and Phat Dat Corporation The selection criteria for these companies include their unique characteristics, future growth potential, ongoing real estate projects, activity fluctuations, business strategies, and notable developments—both positive and negative—related to their projects.

RESEARCH OBJECTIVES

This study offers an in-depth analysis of the Vietnamese real estate market, focusing on key elements such as supply, demand, future opportunities, and challenges It also explores the effects of the COVID-19 pandemic, financial crises, market volatility, and banking collapses on the global real estate landscape and their implications for Vietnam's real estate sector.

This thesis highlights the crucial role of regulatory legislation in Vietnam and its impact on both the real estate development cycle and the investment choices of publicly listed companies By providing a comprehensive financial ratio analysis, the research enhances informed decision-making by offering valuable insights into the financial performance of real estate corporations in Vietnam.

This research examines corporate strategies, long-term business plans, and company values in relation to market benchmarks It aims to provide a comprehensive understanding of how both internal and external economic factors, along with industry-specific variables, impact the stock prices of real estate companies, including Vinhomes, Phat Dat Corporation, Khang Dien Homes Company, and Nam Long Group.

MOTIVATION

My extensive study and professional experience in real estate have revealed various uncertainties and fluctuations that significantly impact developers, investors, and policymakers My primary focus lies in company analysis and industrial commentary, driving my academic pursuits I am dedicated to thoroughly exploring these critical areas to enhance understanding and inform decision-making in the real estate market.

This study offers a comprehensive "past-present-future" perspective to assist developers and investors in diversifying their portfolios, specifically within the Vietnamese real estate market Key target groups identified in this research will benefit from the insights provided.

• For Investors/Developers: This report will assist in evaluating the performance efficiency of real estate companies by offering a thorough understanding and fundamental valuation methodologies applicable to typical listed firms

• For Undervalued Companies: The report serves as a fundamental resource for comparing intrinsic values with the external aspects of market.

METHODOLOGY AND THE METHODS

The success of company recommendations hinges on accurately identifying target companies based on criteria such as public listing status, availability of project information, and primary operations in the real estate sector Following this identification, financial analysis techniques are employed to evaluate and recommend these companies effectively.

Research methodology plays a vital role in the research process by outlining the approach and procedures for executing a project (Saunders et al., 2009, p 43) This section of a thesis is generally organized into two key components: Research Design and Data Collection.

Research design is crucial for choosing the right approach for a project, with the three main methods being inductive, deductive, or a mix of both This thesis utilizes an inductive approach, focusing on deriving research findings from data collected and analyzed through empirical observations.

Market research can be conducted using both quantitative and qualitative methods

Quantitative market research focuses on measuring data and poses questions like "how long," "how many," and "to what extent." Its primary goal is to quantify information and derive generalizable insights from a diverse sample in the study.

Qualitative market research is a vital aspect of the market research industry, employing qualitative methods to achieve a comprehensive understanding of participants, processes, and industries being examined.

Financial statement analysis entails a thorough review of key financial documents, including income statements, balance sheets, and cash flow statements This process evaluates essential financial metrics such as revenue growth, profitability ratios, liquidity ratios, and leverage ratios to determine the overall financial health and performance of companies.

Valuation Models: Two primary models will be employed for valuation:

• Discounted Cash Flow (DCF) Model: This method estimates the intrinsic value of each company by projecting future cash flows and discounting them to present value using a suitable discount rate

• Multiples Valuation Model: This approach involves comparing the companies to industry peers using valuation multiples, such as Price-to-Earnings (P/E) and Price-to- Book (P/B) ratios, to determine relative valuations

Industry Analysis: This analysis will evaluate industry trends, competitive dynamics, regulatory environments, and market conditions to provide context for the financial performance of the companies

Market Research: Qualitative insights will be drawn from market research reports, industry publications, and news sources to understand consumer preferences, market positioning, and brand reputation

The main research approach employed is the collection and analysis of secondary data, which entails synthesizing information from diverse accessible sources This process includes conducting tests, comparisons, and evaluations to pinpoint critical issues relevant to the study.

• Secondary Data Collection: Relevant financial data, industry reports, news articles, and other secondary sources will be gathered from databases such as Bloomberg,

Reuters, Factiva, and company websites

• Document Analysis: Annual reports, investor presentations, and regulatory filings will be scrutinized to extract information on financial performance, business strategies, and corporate governance practices.

STRUCTURE OF THE STUDY

Given the research framework of the above objectives, the overall research process is divided into five major studies:

✓ Analysis of Vietnam and the Vietnamese Commercial Real Estate Industry: This part involves an examination of Vietnam as a target country and an analysis of its commercial real estate sector

The Sharpe Ratio is a crucial metric for financial analysis over the past five years, requiring the collection and examination of relevant financial data, including balance sheets and financial statements This process integrates internal firm characteristics with geographically comparable data to provide a comprehensive understanding of financial performance.

This study utilizes secondary data collection methods, including accounting records, financial reports, and analytical reports from four real estate companies, to assess company health The objective is to analyze and evaluate the psychological factors influencing real estate investment in Vietnam and to forecast their impact on the market.

The business valuation of selected case companies entails assessing their worth through the application of two key methods: the Multiple Pricing Model and Discounted Cash Flow Analysis This study focuses on evaluating four publicly listed companies to derive their valuations effectively.

✓ Investment Opportunities and Recommendations: This section provides an analysis of potential investment opportunities and offers recommendations based on the research findings

Overall, the integration of these methods is designed to comprehensively address and fulfill the objectives of the research Details of find major studies are presented in Figure 1 below:

Figure 1: Structure of the study

GENERAL ECONOMIC OUTLOOK

The World Economic Situation and Prospects (WESP) 2021 report highlights the significant economic disruption caused by the COVID-19 pandemic, which has resulted in enduring socioeconomic challenges By April 2020, lockdown measures affected around 2.7 billion workers, or 81% of the global workforce Consequently, job losses and income reductions pushed an additional 131 million individuals into poverty in 2020.

As of late 2023, the Federal Reserve has maintained the federal funds rate at 5.25% to 5.50% for the second consecutive time According to CBRE’s latest forecast, five rate cuts are anticipated in 2024, bringing the Fed Rate down to between 4% and 4.25% by December 2024 The central bank also confirmed its intention to continue reducing its balance sheet The Fed indicated that tighter financial and credit conditions for households and businesses are likely to impact economic activity, hiring, and inflation Meanwhile, core inflation has been gradually decreasing over the past year and is expected to continue this trend as the economy slows down towards the end of 2023.

For U.S investors and firms, investing in foreign real estate is often a more personal decision, largely due to the abundance of opportunities available in the domestic market.

The size and distribution of real estate significantly influence international investment decisions While the U.S boasts a vast and varied market, it accounts for only a minor portion of the global commercial real estate investment landscape.

Macroecnomics in developed Asia Countries:

In 2020, the developed Asian region, which includes Japan, Australia, and New Zealand, faced an unprecedented decline in economic activity, with the most significant contraction occurring in the second quarter Japan experienced a gradual rise in the unemployment rate, reaching 3.0%.

Developed Asian countries have the ability to implement significant fiscal stimulus packages; however, a strong and sustainable economic recovery will largely depend on the resurgence of external demand, especially from developing regions in East Asia, with China playing a crucial role.

International investment offers three key advantages: prudence, diversification, and a range of opportunities (Corner & Liang, 2006) As global economic integration continues to grow, the potential for international real estate investment becomes increasingly attractive.

Vietnam's GDP growth decreased to 5.05% in 2023, falling short of the government's target of 6.5% and down from 8.02% the previous year Despite this slowdown, major international financial institutions like the ADB, IMF, and HSBC maintain a positive outlook for Vietnam's economy, projecting a rebound with GDP growth anticipated to reach at least 6% in 2024.

Figure 2: Vietnam’s GDP in consecutive 5 years

Note: The actual numbers should be verified with reliable sources such as the World Bank, IMF, or

As of December 2023, Vietnam's total registered foreign direct investment (FDI) reached approximately US$36.61 billion, marking a year-on-year increase of 32.1% The primary sources of this investment were Singapore, China, and Hong Kong, while Quang Ninh, Thai Binh, and Bac Giang emerged as the most appealing destinations for FDI this year.

In 2023, Vietnam's total import and export turnover reached US$683 billion, reflecting a 6.6% decline year-on-year Exports fell by 4.4%, and imports decreased by 8.9% Despite this, Vietnam maintained a trade surplus for the eighth consecutive year, estimated at US$26 billion, which is three times higher than the surplus of 2022 The United States emerged as the largest export market, while China remained the top source of imports.

In 2023, Vietnam's consumer price index (CPI) experienced a year-on-year increase of 3.25%, successfully aligning with the National Assembly's target This rise was primarily fueled by escalating housing and construction material costs, as well as higher expenses for food and electricity.

Between 2020 and 2022, Vietnam experienced a rising trend in lending interest rates, but in 2023, the State Bank of Vietnam (SBV) implemented a policy to reduce rates by 0.5% to 2% This led to an approximate decrease of 2% in both deposit and lending rates compared to the end of 2022 By the end of 2023, the average lending rate for new loans stood at 6.7%, marking one of the lowest levels seen in the past two decades.

Fluctuations in interest rates can significantly affect the cost of debt, influencing real estate financing expenses These changes may lead to either positive or negative shifts in property prices, as observed in various markets and sectors.

GENERAL REAL ESTATE MARKET

Real estate, commonly referred to as property, encompasses land and any assets permanently affixed to it, including buildings, structures, and improvements, as well as natural resources associated with the land.

Since March 2020, the COVID-19 pandemic has caused a 26.5% increase in the cost of newly listed homes in the United States, with a 13.5% rise compared to the same period in 2021 Concurrently, the nationwide inventory of active listings has dropped by 18.9% due to heightened demand, resulting in a seller's market where the number of prospective buyers surpasses available homes This imbalance is driving up prices and contributing to a significant shortage of homes for sale.

In the third quarter of 2022, economic challenges intensified, raising concerns about potential recessions in major economies However, countries reliant on commodity exports are faring better, highlighting the uneven effects of the downturn As central banks adopt aggressive strategies to address these economic issues, additional interest rate hikes are anticipated in 2023.

The residential real estate market is expected to be valued at around USD 11.14 trillion in 2024, with forecasts indicating growth to USD 14.96 trillion by 2029 This growth represents a compound annual growth rate (CAGR) of 6.07% during the period from 2024 to 2029.

Figure 3: Global Real Estate Market

Vietnam's real estate market is a key driver of the national economy, significantly influencing both domestic and foreign investment It establishes vital connections with financial, monetary, construction, building materials, and labor markets The effective management and development of this sector are essential for promoting socio-economic growth, attracting investment, and supporting the sustainable development of urban and rural areas, aligning with the country's industrialization and modernization objectives.

The real estate market is a major driver of capital investment, significantly influencing various aspects of economic and social life Its effects reach multiple sectors, continuously shaping and being shaped by diverse economic activities and societal factors.

The Vietnamese Government prioritizes the stability, safety, and sustainability of real estate market development as a long-term objective Consequently, researching real estate investment psychology is essential for identifying solutions that enhance the safety, effectiveness, professionalism, and sustainability of Vietnam’s real estate market.

As of 2023, Vietnam's real estate industry accounts for approximately 4.51% of the country's GDP, according to the General Statistics Office Projections from the Vietnam Real Estate Research Institute suggest that by 2025, this sector's contribution to the national economy will increase to 21.2%, representing an estimated value of $462.7 billion.

By 2030, real estate assets are expected to reach $2,183.09 billion, accounting for 22.0% of a total $5,601.31 billion market Specifically, the Vietnam residential real estate market is projected to grow from $25.26 billion in 2024 to $45.62 billion by 2029, reflecting a compound annual growth rate (CAGR) of 12.55% during this period.

Figure 4: Chart of Vietnam Residential Real Estate Market in period 2017-2029

Notes: Please note that this chart only covers the residential real estate market Data was converted from local currencies using average exchange rates of the respective year

Vietnam's real estate market is experiencing significant growth, driven by a transition to urban living and modern amenities, a focus on sustainability, and strong support from government policies and foreign investments With ongoing economic expansion and political stability, the sector is set to sustain its upward momentum in the coming years.

An analysis of the Vietnam market, particularly the residential real estate sector, highlights its potential and attractiveness for investment Following the Doi Moi reforms, Vietnam has emerged as a promising environment for foreign investors As a rising "tiger" economy, Vietnam is characterized by political stability and robust economic growth, making it an appealing destination for international investments in real estate.

PESTLE ANALYSIS – REAL ESTATE INDUSTRY

Macro-environmental factors are uncontrollable elements that exist outside an organization's influence and can significantly affect different organizations in varying ways (Cadle et al., 2010, p 3) To analyze these factors, PESTLE analysis is commonly employed, focusing on six essential areas of change: Political, Economic, Socio-Cultural, Technological, Legal, and Environmental factors (Haberberg & Rieple, 2008, p 105).

By thoroughly analyzing the external environment of their target market, businesses can identify opportunities and respond swiftly to changes, minimizing the risk of loss or failure (Gupta 2013) This highlights the importance of understanding external factors in strategic decision-making.

PESTLE analysis is a widely utilized tool for assessing external factors that impact businesses, providing a fundamental framework for understanding the macro-environment According to Berg and Piestersma (2014), this analysis offers a comprehensive overview essential for strategic planning and decision-making.

Figure 5: Chart of PESTLE factors

Political factors play a crucial role in shaping the business environment and trade, as they encompass government policies that influence various aspects of operations Important elements to consider include tax regulations, corruption levels, trade barriers, government stability, and employment and operational regulations (O’Brien, 2015, p 199).

Foreign investors in Vietnam's residential real estate market encounter significant risks due to regulatory requirements that force the transfer of ownership rights for unsold properties to the State upon the expiration of investment certificates This regulation diminishes the market's attractiveness by potentially devaluing unsold assets, creating a substantial barrier to foreign investment As a result, this policy deters foreign participation and reduces the overall appeal of investment in the residential sector.

Economic factors play a crucial role in influencing a company's operations, encompassing aspects such as economic growth, inflation rates, interest rate fluctuations, GDP trends, government expenditure, economic stability, and raw material demand While it is important to consider these elements, the focus should vary based on the specific business sector, highlighting the need for tailored analysis rather than a one-size-fits-all approach.

Interest rates are a crucial macroeconomic factor that greatly affects the real estate sector They play a significant role in shaping economic consumption patterns When interest rates rise, individuals are more likely to save their extra funds in banks to take advantage of higher returns, which can lead to a decrease in immediate consumer spending on real estate.

Inflation significantly affects the real estate industry, as elevated inflation rates lead to a decrease in disposable income, ultimately diminishing demand in the housing market.

Social factors play a crucial role in understanding cultural trends, customer demographics, and lifestyle elements in the marketplace Important aspects to consider include demographics, population distribution, education levels, life expectancy, purchasing behaviors, lifestyle choices, and prevailing social conventions (Johnson et al., 2011, p 68).

Demographic factors, particularly population growth rates, play a crucial role in shaping the real estate industry, as high population growth typically leads to increased demand and elevated prices for real estate Currently, we are witnessing favorable demographic trends that are fueling domestic consumption, expanding the middle class, and driving up demand for housing and retail spending, ultimately contributing to overall economic growth.

In light of recent challenges in China, Foxconn, Apple's primary component manufacturer, is increasing its investment in Vietnam Likewise, South Korean giant Samsung has reiterated its commitment to boosting investments in the Vietnamese market.

Urbanization significantly influences real estate values, with countries experiencing high urbanization rates often seeing increased property prices due to the demand for land surpassing its supply.

Technology plays a crucial role in shaping how businesses deliver products and services to their target markets Important considerations include internet infrastructure, government investment in research and development, overall infrastructure quality, patent and licensing regulations, outsourcing practices, and the pace of technological advancements Furthermore, key technological factors involve the adoption of new technologies, increased computerization, and mechanization within operations.

Modern software and data analytics have revolutionized the real estate industry by enabling accurate property price forecasts and informed decision-making Furthermore, mobile applications have simplified the processes of renting, buying, selling, and leasing properties These technological advancements have resolved past challenges, encouraging greater participation in the real estate market and fostering its growth.

Legislative changes periodically impact the business environment, influencing various legal factors such as product safety regulations, health and safety standards, employment laws, and competition law (Rao et al 2008, 116).

PORTER’S FIVE FORCES

An effective model for competitor analysis is Porter's Five Forces Model This model assists in identifying and analyzing five distinct competitive forces and is applicable across various industries

This chapter utilizes Porter's Five Forces model to analyze the structure of the Vietnamese commercial real estate market, highlighting three major events that have coincided with peaks in property prices within the sector.

3.2.1 Threat of New Entrants – Relatively High

The threat of new entrants in the real estate market is influenced by various barriers to entry, including the necessary capital investment and government regulations The potential for new firms to enter the market imposes limitations on the market power of existing industry players Unlike many other sectors, the real estate market allows for diverse business entities to invest, creating a unique competitive landscape.

The threat of new entrants in the Vietnamese real estate market is relatively high, largely due to the significant capacity and capabilities of foreign real estate developers Due to:

Between 1993 and 1995, the enactment of the Land Law in Vietnam marked a pivotal moment for the residential real estate market by legalizing public land trade This period witnessed a significant influx of foreign capital, driving demand for residential properties such as apartments and single-family homes Another key event occurred in 2001-2002 with the signing of the VN-U.S Bilateral Trade Agreement, which further enhanced foreign investment in the residential sector, complemented by the activation of the Land Law on July 1.

2004 The third pivotal event was Vietnam's accession to the World Trade Organization (WTO) in

2007, which significantly heightened foreign investors' interest in the Vietnamese residential real estate market (Nguyen, 2012)

The residential real estate market in Vietnam began to decline in 2008 due to the government's restrictive credit policy, which made it challenging for local developers and buyers reliant on domestic bank financing to secure loans for residential projects and purchases However, this restrictive environment also opened up opportunities for foreign investors, enabling them to establish joint ventures with local partners under more advantageous conditions.

Vietnamese developers are encountering significant challenges with funding, yet Asian investors are recognizing promising opportunities in the Vietnamese commercial real estate market Notable investment has surged from countries like Singapore, Japan, Malaysia, and South Korea, with Singapore, South Korea, and Malaysia emerging as the most prominent property investors in major cities such as Hanoi and Ho Chi Minh City.

The advantages of investing in foreign markets can be summarized by the following key highlights:

Foreign real estate developers have significant financial resources that allow them to execute large-scale projects and invest in luxury developments They also benefit from a wide array of international funding sources, such as institutional investors, private equity, and global financial institutions.

Renowned foreign real estate developers possess strong global brand recognition and a reputation for delivering high-quality projects, allowing them to effectively leverage sophisticated marketing and sales strategies to promote their developments.

The Vietnamese government is actively promoting foreign investment in the real estate sector through a range of incentives, such as relaxed ownership regulations, attractive tax benefits, and simplified approval processes These measures significantly reduce barriers for foreign developers, thereby enhancing their ability to invest in the market.

Local developers looking to enter Vietnam's real estate market face medium barriers, primarily due to the need for substantial funding to acquire projects The absence of Real Estate Investment Trusts (REITs) complicates local financing, pushing firms to seek alternative funding sources While Vietnam's legal and regulatory systems are evolving, they still lag behind international standards, creating uncertainties that further diminish the attractiveness of entering the market.

The Vietnamese real estate market offers attractive investment opportunities for foreign investors, but it also poses significant challenges Complex legal frameworks and cumbersome administrative processes can discourage potential investors Furthermore, high market volatility has prompted some seasoned investors to exit the market As a result, the potential for new entrants in the Vietnamese commercial real estate sector is considered moderate.

3.2.2 Rivalry Among Existing Firms – Relatively Low or at the Best Medium

The intensity of competition in the Vietnamese commercial real estate market is shaped by various factors such as the number of competitors, industry growth rate, exit barriers, and rival diversity, as noted by Porter (1998) Foreign investors encounter significant competition from both local and international firms Interestingly, despite the high rivalry, a distinctive feature of this market is the considerable cooperation among companies.

The Vietnamese real estate market is characterized by intense competitive rivalry, particularly in major cities like Ho Chi Minh City and Hanoi, where a diverse array of local and international developers are competing for a share of the lucrative high-end and luxury segments Established firms such as Vingroup and Novaland, along with foreign investors like CapitaLand and Keppel Land, are fueling this competition through significant investments in upscale residential projects The influx of new entrants and the rising demand for premium properties further intensify the competition, compelling developers to innovate and differentiate their offerings This dynamic landscape not only drives market growth but also presents development challenges within Vietnam's real estate sector.

The Vietnamese commercial real estate market has historically been led by domestic investors, with major players like Vincom JSC, Bitexco, Phat Dat, Hung Thinh, Novaland, Hadico, and Van Phu Invest JSC significantly contributing to the sector These prominent real estate firms not only energize the market but also draw the interest of foreign investors.

Despite challenges faced by Vietnamese real estate companies due to a stagnant commercial property market, foreign investors remain optimistic about investing in Vietnam They are drawn to the country's growing population, affordable labor, steady economic growth, and increasing per capita income, which present significant growth opportunities Currently, Vina Capital and Indochina Capital stand out as the leading foreign investors in Vietnam's commercial real estate sector.

3.2.3 Threat of substitute products or services – Relatively Low

In Vietnam's rapidly growing economy, the unique and irreplaceable nature of real estate makes it impossible to find direct substitutes for property investments The country's specific geographical, economic, and cultural attributes create a distinct market environment that sets it apart from other industries, where alternative products may offer similar benefits.

INTRODUCTION – LITERATURE REVIEW

Indicators and financial ratios are essential tools for quantitative analysis, helping to evaluate a company's performance by examining significant relationships between variables The data needed for ratio analysis is sourced from financial statements like the balance sheet and income statement, which together assess how effectively a business converts its assets into cash These financial ratios are invaluable for tracking a company's performance over time, allowing for comparisons with past performance to identify areas needing improvement and potential issues that can be proactively addressed.

Financial statements provide a detailed overview of a company's financial health, while accounting ratios are essential for their analysis These ratios, which assess the relationship between various financial variables through mathematical measures, are derived from financial statements and are crucial for interpreting a firm's financial condition Ratio analysis not only offers valuable insights but also identifies areas that may need further investigation Effective interpretation of these ratios requires a solid understanding of financial statement preparation and the relevant rules Over time, the concept of ratio analysis has advanced, supported by extensive research and theoretical frameworks in academic literature.

Here are five essential financial ratios popularity using in company analysis:

✓ Liquidity Ratios: Liquidity ratios measure a company's ability to meet its short-term obligations using its most liquid assets

✓ Leverage Ratios: Leverage ratios assess a company's use of debt to finance its assets and its ability to repay long-term obligations

✓ Operational Efficiency Ratios: Efficiency ratios gauge how effectively a company utilizes its assets and manages its operations

✓ Profitability Ratios: Profitability ratios indicate a company's ability to generate profit relative to its revenue, assets, or equity

✓ Market Value Ratios: Market value ratios evaluate a company's financial performance from the perspective of its market value

Liquidity ratio measures the short-term debt repayment ability based on asset and debt structure factors Several commonly used ratios for assessing a company's financial health include:

The current ratio is an essential financial metric that assesses a company's ability to cover its short-term liabilities with short-term assets A high current ratio may indicate that the company possesses surplus liquid assets, which could be better utilized for revenue-generating activities or strategic investments.

Formular: Current Ratio = Current Assets / Current Liabilities

The liquidity ratio measures a company's capacity to meet immediate creditor demands using its most liquid assets, providing a clear view of its ability to repay current obligations By excluding inventory and prepaid items that cannot be quickly converted to cash, this ratio serves as a stringent indicator of liquidity, concentrating solely on assets that can be rapidly transformed into cash.

Formula: Quick ratio = Liquid assets / Current liabilities

A business's cash flow is crucial for meeting short-term obligations, capitalizing on opportunities, and securing favorable credit terms Generally, a cash flow ratio of 1 or higher is deemed acceptable for most businesses, indicating financial stability and the ability to manage immediate financial commitments effectively.

General Fomular: Working capital ratio = Current assets - Current liabilities

The equity-to-debt ratio evaluates the capital contributed by owners and funders, including grants, against the funds supplied by lenders, who have priority claims over equity investors regarding the company's assets Lenders favor a robust equity cushion to protect against financial challenges, as a higher equity ratio enhances repayment prospects Conversely, while excessive debt can threaten business stability, inadequate debt levels may hinder growth potential.

General Fomular: Debt to Equity = (Short Term Debt + Long Term Debt) / Total Equity

This ratio compares expenses to revenue A decreasing ratio is considered favorable, as it typically indicates improved efficiency

General Formula: Operating Expenses / Total Revenue

The trade receivables turnover ratio reflects how often a company's receivables are collected within a year A higher turnover rate signifies that customers are paying their debts more promptly, leading to less capital being tied up in accounts receivable.

General Formula: Net sales / Average accounts receivables

The receivables turnover ratio reflects how quickly a company collects its debts, indicating the frequency with which average receivables are converted into cash over a year This metric assesses the efficiency of a company's revenue collection processes and highlights how effectively it utilizes its assets.

General Formula: Revenues / Average Receivables

This ratio measures the efficiency with which a business generates sales per dollar of assets

An increasing ratio signifies that the business is utilizing its assets more effectively

General formula: Total Asset Turnover = Revenue / Average Total Assets

The ratio assesses how effectively a company converts its assets into profit, offering a useful benchmark for comparison within its industry A lower ratio compared to competitors may suggest that those rivals are operating more efficiently Furthermore, incorporating after-tax interest expense in the numerator is appropriate, as Return on Assets (ROA) evaluates profitability across all assets, irrespective of their financing through equity or debt.

General formula: Net Profit / Average Total Assets

This measure is essential for evaluating how the returns compare to less risky investments, such as bonds, thereby providing insight into the relative attractiveness of the investment

General formula: Net Profit / Average Shareholder Equity

The gross profit margin assesses product profitability by calculating profits before indirect costs are considered Understanding this margin is essential to ensure that gross profits can adequately cover indirect expenses and that every product achieves a positive gross margin.

General formula: Gross Profit / Total Sales

Earnings Per Share (EPS) is a vital financial metric for companies in the stock market, representing the average net profit attributed to each common share over a designated timeframe This key indicator is essential for both investors and the company, offering valuable insights into profitability and the potential for generating returns for shareholders.

General Formula: (Net Income−Dividends on Preferred Stock) / Weighted Average Shares Outstanding

VINHOMES ANALYSIS

Vinhomes Joint Stock Company, based in Hanoi, Vietnam, is a leading entity in real estate investment, trading, and management Established in 2002 as Vincom Joint Stock Company, it rebranded to Vinhomes in February 2018 and is a subsidiary of Vingroup Joint Stock Company Committed to promoting a sustainable real estate market in Vietnam, Vinhomes focuses on delivering high-quality services and modern infrastructure.

Vinhomes is celebrated for creating residential communities that prioritize comprehensive amenities, green spaces, and an upscale living experience Their projects focus on fostering community connections while providing vibrant, eco-friendly urban living options By investing in digital technologies and smart solutions, Vinhomes enhances the construction, management, and operation of urban areas, solidifying its role as a transformative leader in Vietnam’s urban development.

Vinhomes Joint Stock Company is a premier integrated real estate developer in Southeast Asia, boasting a strong presence in all segments of the Vietnamese market With an extensive land bank capable of supporting over 30 years of development, the company ensures sustainable growth and maintains a solid market position.

5.1.1.2 Historical Development and Strategic Milestones

Early Foundation and Initial Growth: Vincom Joint Stock Company was established in

2002, marking the beginning of the Vinhomes brand It later evolved into Vingroup Joint Stock Company, the parent company of Vinhomes

Rebranding and Expansion: Vincom Joint Stock Company was renamed Vinhomes Joint

Stock Company and subsequently listed on the Ho Chi Minh Stock Exchange (HOSE), enhancing its visibility and market presence

Innovation and Modernizatio: Vinhomes introduced the O2O (Online to Offline) business model, focusing on promoting sales and enhancing omnichannel real estate transactions

Vinhomes has evolved from a leader in integrated real estate models to a pioneer in megaprojects, leveraging its extensive land bank for strategic long-term development The company's recent emphasis on digital innovation and industrial real estate demonstrates its adaptability in a rapidly changing market.

Vinhomes' consistent growth, strategic expansions, and technological innovations establish it as a key competitor in the real estate market, ensuring its ongoing success in the future.

Vinhomes, a subsidiary of Vingroup, leverages the credibility and financial strength of one of Vietnam's premier private conglomerates With a diverse portfolio that includes real estate, education, healthcare, and tourism, Vingroup has a substantial presence in various sectors of Vietnamese society This extensive engagement not only emphasizes Vingroup's significant influence on everyday life but also highlights its crucial role in shaping Vietnam's economic and social landscape.

Vinhomes benefits from the robust Vingroup ecosystem, encompassing various sectors like retail with VinMart and Vincom, education through Vinschool, and healthcare via Vinmec This comprehensive integration significantly boosts the value and appeal of its projects.

✓ Product and Service Quality: Vinhomes places a strong emphasis on construction quality, modern design, and comprehensive amenities, offering a premium living experience to its residents

✓ Extensive Land Bank: The company possesses a substantial portfolio of prime land across various provinces, providing a competitive edge in project development

Vingroup's reputation is closely linked to its founder, billionaire Pham Nhat Vuong, who has spearheaded numerous significant business ventures Under his leadership, the company has crafted a strategic vision focused on ambitious development and investment initiatives This vision is supported by a highly experienced management team with strong strategic insights and advanced academic credentials, many of whom are graduates of prestigious global universities and have made notable contributions in research and development.

✓ High Product Pricing: Vinhomes’ products are generally priced higher than the market average, which may limit accessibility for certain customer segments

✓ Dependence on Vingroup’s ecosystem: While affiliation with Vingroup is

Vingroup's extensive investments in real estate and various industries require substantial capital, resulting in significant debt and bond issuance This reliance on financial leverage exposes the company to unavoidable risks.

Implementing a strong management strategy incurs significant costs due to the need for internal control processes, auditing, and ethical governance While these expenses are essential for effective oversight and compliance, they also lead to increased operational costs.

✓ Growing Real Estate Market: Vietnam's rapid urbanization and high demand for residential properties, especially in the mid-to-high-end segments, present significant growth opportunities

✓ Supportive Policies: Government policies promoting housing development create favorable conditions for real estate companies like Vinhomes

✓ Technological Trends: The integration of technology in project management and customer experience presents an opportunity for Vinhomes to lead and innovate in the sector

✓ International Operational Experience: The establishment and robust expansion of

Vingroup's ecosystem demonstrates significant potential for global growth, both in Vietnam and internationally This success highlights the group's ability to utilize its expertise and resources beyond domestic markets, showcasing its strategic vision and adaptability in diverse global environments.

✓ Intense Competition: The Vietnamese real estate market is increasingly attracting both domestic (Nam Long, Hung Thinh, Novaland) and international investors (Capitaland, Keppel Land, Gamuda), intensifying competitive pressures

✓ Economic Volatility: Fluctuations in the global and domestic economy could impact market demand and purchasing power

✓ Regulatory Changes: Changes in legal and regulatory frameworks, particularly related to land use, may affect Vinhomes' business operations

Vingroup faces significant challenges due to complex administrative procedures, as the intricate regulatory environment can hinder operational efficiency and impact the effective execution of its strategic initiatives.

The analysis of Vinhomes' current assets demonstrates a substantial increase over the period from 2019 to 2023 Current assets grew from VND 139,555,054 in 2019 to VND 242,340,589 in

2023, reflecting an impressive rise of VND 102,785,535 This notable growth is particularly pronounced from 2021 to 2022, with current assets surging from VND 94,437,005 to VND 196,535,229, an increase of VND 102,098,224

Vinhomes' substantial growth in current assets reflects enhanced liquidity and financial flexibility, enabling the company to effectively manage short-term liabilities and seize new investment opportunities This ongoing upward trajectory underscores Vinhomes' robust operational performance and efficient asset management strategies.

Vinhomes has demonstrated significant improvements in asset management, as evidenced by the decline in inventory as a percentage of current assets, from 43% in 2019 to 27% in 2021, and further down to 23% in 2023 despite a rise in current assets to VND 242,340,589 million The peak inventory of VND 64,362,407 million in 2022, followed by a reduction to VND 55,317,712 million in 2023, highlights the company's enhanced inventory efficiency and strategic approach to asset management.

This reduction in the inventory-to-current-assets ratio reflects Vinhomes’ effective approach to optimizing inventory levels in line with its expanding asset base, improving liquidity and operational performance

From 2019 to 2023, Vinhomes has significantly expanded its long-term assets, increasing from VND 57,685,974 million to VND 202,290,086 million, which represents a compound annual growth rate of around 36% This growth underscores the company's dedication to enhancing its asset base, crucial for supporting its extensive real estate development projects and investments.

NAM LONG GROUP ANALYSIS

5.2.1.1 Nam Long Group’s company profiles

Nam Long Group (NLG), listed on the Ho Chi Minh Stock Exchange since April 8, 2013, is the first non-state-owned enterprise in Vietnam's construction sector The company has established a strong reputation by forming strategic partnerships with renowned international firms such as Keppel Land, Hankyu Hanshin Properties, and Nishitetsu Group.

The Group has formed successful partnerships with Hankyu Hanshin Properties and Nishitetsu Group to develop significant residential projects, including the 34.7-hectare Fuji Residence in Nam Long Phuoc Long and the 17.5-hectare Kikyo Residence in Nam Long Phu Huu.

5.2.1.2 Historical Development and Strategic Milestones:

In 2019, Nam Long unveiled its Township Development Strategy to expand its market presence and acquire 236 hectares of land, while also transforming its corporate culture through a partnership with Vanto Group from the USA.

In 2023, Nam Long enhanced its business model under the Dragon Growth Transformation strategy by creating two new legal entities: Nam Long Land and Nam Long Commercial Property This strategic move underscores the Group's dedication to refining its operational focus and broadening its market presence.

5.2.1.3 Nam Long Group’s key strategy analysis

Nam Long Group is a prominent real estate development company in Vietnam, with over

20 years of experience in the construction and development sector Established as a private entity in 1992, the company transitioned into an investment corporation in 2005, reflecting its expansion and evolving business model

Nam Long Group is dedicated to creating living environments that foster a sense of community in new developments, highlighting its commitment to developing both commercial and residential properties to meet the growing demand in these sectors.

Nam Long Group has a strong presence in major towns and cities across Vietnam, particularly in Can Tho, a rapidly developing city in the south This strategic geographic expansion highlights Nam Long's commitment to leveraging regional growth opportunities and enhancing urban infrastructure development throughout the country.

The company implements a comprehensive growth strategy that addresses diverse market needs In housing development, it effectively responds to real market demand through its key product lines, including EHome, EHomeS, Flora, and Valora.

The company diversifies its portfolio by investing in non-residential properties such as educational and healthcare facilities, ensuring stable revenue and profits Strategic collaborations with reputable partners enhance project execution, while effective leadership fosters organizational growth and drives innovative initiatives.

An effective working environment enhances employee performance, leading to increased profitability through strategic management and investments The company’s strong capital-raising capabilities bolster its expansion and development initiatives, while an open and innovative culture promotes adaptability and ongoing improvement.

NLG boasts a significantly lower debt-to-equity (D/E) ratio than its major real estate competitors, a strength enhanced by strategic partnerships with Hankyu Hanshin Properties and Nishi-Nippon Railroad These collaborations provide substantial financial backing, allowing NLG to pursue large-scale projects with increased capacity Furthermore, the expertise of these international partners greatly enhances NLG's project management, design, and execution capabilities.

Nam Long must boost its marketing investment to improve brand visibility and reach a wider audience Additionally, the company's underdeveloped technology in management processes hinders operational efficiency and data-driven decision-making Furthermore, the firm's tendency towards high-risk investments introduces financial uncertainties that could jeopardize its long-term stability.

Transaction volumes are expected to decline further in 2019, primarily due to tighter liquidity and restricted credit access, leading to higher borrowing costs This trend is likely to deter speculators from high-end and luxury housing markets, shifting some interest towards affordable and mid-end segments However, the main source of demand in these areas is anticipated to come from genuine residential homebuyers rather than speculative investors.

Nam Long Group (NLG) is poised to capitalize on the growing middle class, as its strategically located and competitively priced projects are expected to attract residential homebuyers in the mid-end and affordable housing segments These segments are projected to sustain steady demand due to ongoing urbanization and the expansion of the middle class, with only minimal fluctuations in demand compared to high-end and luxury properties, which are more susceptible to business cycle changes.

Vietnam's housing demand is robust, driven by its population of over 96 million, which ranks 15th worldwide A significant number of residents aged 20-44 are concentrated in urban centers, amplifying the need for housing in these areas The Ho Chi Minh City Real Estate Association reports that the demand for affordable and mid-end housing in Ho Chi Minh City greatly exceeds current supply, positioning Nam Long Group (NLG) to capitalize on this growing trend.

In 2019, the State Bank of Vietnam (SBV) is implementing tighter credit policies to regulate financial flows into the market, including a reduction in the ratio of short-term funds allocated for long-term loans to 40% and an increase in bank risk weightings for real estate loans to 250%.

KHANG DIEN CORPORATION

5.3.1.1 Khang Dien House’s company profiles

Khang Dien, founded in 2001 as a Limited Liability Company, transitioned into a Joint Stock Company and executed an IPO with a charter capital of VND 332 billion Notably, VinaCapital and Prudential became shareholders through their equity contributions The company's shares are traded on the Ho Chi Minh City Stock Exchange under the ticker symbol KDH.

In 2023, the real estate sector faced significant challenges, including limited product supply and reduced liquidity Despite these obstacles, Khang Dien Group successfully navigated the market landscape, remaining committed to its business goals through a strong legal framework and solid financial foundation.

5.3.1.2 Khang Dien House’s key strategy and events analysis

In 2023, the company achieved a net revenue of VND 2,088 billion and a profit after tax of VND 716 billion, successfully completing 72% of its financial plan Despite market fluctuations, these results reflect the strong commitment, collaboration, and determination of the entire organization.

In 2023, the company upheld a robust financial structure with a total liabilities-to-equity ratio of less than 1 Owner’s equity reached VND 15,523 billion, representing 59% of the total capital and serving as the primary source for the formation of the company's assets.

In addition, Khang Dien has cooperated with Keppel Corporation Limited (Singapore) to deploy projects in Binh Trung Dong Ward, Thu Duc City in the coming time

✓ Brand Reputation: Khang Dien has established a formidable brand reputation over its

With a 20-year history in the real estate sector, the company has established itself as a trusted and popular name, fostering customer trust and market credibility that significantly contribute to its overall success.

Since its establishment in 2001, Khang Dien has developed significant expertise in land acquisition and project development, supported by a solid financial foundation The company's financial strength is validated by audited statements from Ernst & Young and substantial investments from notable foreign investors like Dragon Capital and VinaCapital.

Khang Dien excels in land management and project execution, effectively overseeing a significant land bank in prime development zones of Ho Chi Minh City while consistently replenishing its reserves With over 20 years of industry experience, the company has developed expertise in land acquisition, project legality, and development Khang Dien is renowned for its punctual project delivery, showcasing unique architectural designs and high-quality, eco-friendly products.

To boost operational efficiency and competitiveness, the company must significantly increase its marketing investment and integrate advanced technology into its management processes Currently, the underutilization of technology hinders both market presence and internal management capabilities, making it essential to address these deficiencies for improved performance.

The company faces significant financial risks due to its ongoing high-risk investments, which may jeopardize its financial stability Furthermore, its reliance on external distribution channels for sales—stemming from the lack of an in-house sales team—could weaken its control over sales processes and customer relationships.

The company faces significant workforce and geographic limitations due to strict recruitment criteria, leading to an insufficient workforce to meet increasing demand Additionally, constraints in employee training and development hinder growth With operations primarily concentrated in Ho Chi Minh City and minimal expansion into other regions, the company’s growth potential and market reach are further restricted.

Khang Dien boasts a robust land bank exceeding 600 hectares, strategically concentrated in Ho Chi Minh City, especially in Thu Duc City and its western regions From 2023 to 2024, the company aims to launch sales for several small-scale projects, such as Clarita, The Privia, and The Solina, which are expected to drive substantial sales revenue and profits in the medium term, alongside ongoing development of larger land parcels.

Rising income levels among citizens are anticipated to boost purchasing power and drive demand for residential properties The completion of significant infrastructure projects in eastern Ho Chi Minh City, including the Thu Thiem Bridge, Thu Thiem Tunnel, and Ring Road, is expected to further stimulate real estate demand in these regions.

Khang Dien is strategically focusing on long-term growth by investing in three significant projects: the expansive Tan Tao Residential Area (330 hectares), the Le Minh Xuan Industrial Park (110 hectares), and the Phong Phu 2 Residential Area (130 hectares) These investments are expected to be vital for enhancing the company's profitability in the future.

Stricter credit policies have emerged in response to recent uncertainties, making it increasingly challenging for both developers and buyers to obtain financing This tightening of credit has resulted in a slowdown of investments and development within the real estate sector.

The real estate industry is experiencing intensified competition, with new companies entering the market and established firms solidifying their presence To thrive in this challenging landscape, businesses must enhance their strategies and operational efficiency.

PHAT DAT CORPORATION ANALYSIS

5.4.1.1 Phat Dat Corporation’s company profiles

Phat Dat Real Estate Development Corporation, established in 2004 as Phat Dat Construction and Housing Business Joint Stock Company, aspires to be a top real estate group in Vietnam by owning prestigious brands The company is dedicated to crafting exceptional living environments characterized by unique architecture and high quality, ultimately increasing value for customers, shareholders, and the community.

5.4.1.2 Historical Development and Strategic Milestones

In 2008, Phat Dat Corporation became a public company, raising its charter capital to VND 1,298 billion The company broadened its investment portfolio by developing luxury resorts in Cam Ranh, Hoi An, and Phu Quoc, and formed partnerships with the Starwood Group and Marriott Group to manage the Westin Resort & Spa in Cam Ranh and the Marriott Hotel in Hoi An.

In 2010, Phat Dat Corporation was listed on the Ho Chi Minh Stock Exchange (HOSE) with the stock code PDR During this time, the company commenced construction and unveiled the show flats for The EverRich 2 project in District 7, Ho Chi Minh City, while also starting the construction of the Phu Thuan Bridge in the same area.

In early 2020, the company expedited infrastructure development to enhance the delivery of multiple land lots in Sub-Project 2 of the Nhon Hoi Urban Area, located in Binh Dinh Province This strategic move resulted in the recognition of revenue and profit from the transfer of these land lots.

In 2023, Phat Dat Corporation increased its charter capital to VND 7,388.1 billion and commenced construction on the Bac Ha Thanh Urban Area, showcasing resilience in the challenging real estate market The company achieved notable recognition, ranking 5th among the Top 10 Property Developers by Vietnam Report and securing a position in the Top 10 listed companies for best corporate governance at the 16th Listed Company Awards Additionally, it was ranked 26th in the Top 100 "Employers of Choice" by CareerViet and Amco Vietnam.

Phat Dat Corporation's current assets have shown a notable trend from 2019 to 2023 In

2019, current assets were VND 10,354,694 million, and they increased steadily to VND 18,216,543 million by 2022, before slightly declining to VND 16,916,369 million in 2023

Phat Dat Corporation's inventory-to-current assets ratio has fluctuated from 77% in 2019 to 72% in 2023, peaking at 85% in 2020 and dropping to 67% in 2022 before a slight recovery The absolute inventory value surged from VND 7,994,803 million in 2019 to VND 12,199,560 million in 2023, highlighting the company's proactive inventory management and strategic adaptations to market dynamics Despite the recent uptick, the overall trend indicates that Phat Dat continues to prioritize a high inventory level in relation to its current assets, underscoring its operational strategy focused on inventory management.

As of 2023, the proportion of short-term assets has declined from 79.12% in 2019 to 73.20%, while long-term assets have risen from 20.88% to 26.80% This transition reflects the company's strategy to enhance its long-term asset base, focusing on achieving more stable returns and minimizing vulnerability to short-term market volatility.

Liabilities have consistently surpassed 70% of the company's total assets, increasing from 72.01% in 2019 to 82.25% in 2023, while equity has declined from 27.19% to 17.75% This trend highlights a growing dependence on debt, which elevates financial risks, particularly in the context of rising interest rates The company shows a preference for long-term financing, as evidenced by significantly higher long-term liabilities compared to short-term liabilities Over the years, the composition of equity has varied, with owner's equity and retained earnings serving as the primary components.

Over the past five years, Phat Dat’s current ratio has shown a pattern of decline and stabilization Starting at 3.4 in 2019 and falling to 1.7 in 2022, the ratio then improved to 1.8 in

In 2023, Phat Dat experienced fluctuations in its liquidity position, marked by a significant decrease that indicated tighter conditions, followed by a modest recovery Despite these variations, the current ratio remains above the critical threshold, suggesting that the company effectively manages its short-term liabilities However, continued vigilance in liquidity management is essential to sustain this reasonable level of liquidity.

Phat Dat's quick ratio has shown fluctuations over the past five years, decreasing from 0.8 in 2019 to a low of 0.3 in 2021, before slightly recovering to 0.5 in both 2022 and 2023 These changes indicate the company's shifting liquidity status, with notable declines reflecting periods of financial instability and subsequent improvements demonstrating efforts to enhance liquidity However, despite recent stabilization, Phat Dat's quick ratio remains below the ideal level, indicating ongoing challenges in managing short-term financial obligations with its most liquid assets.

Phat Dat Group has experienced a consistently low cash ratio over the past five years, beginning at 0.2 in 2019 and fluctuating between 0.0 and 0.1 in the following years This trend underscores ongoing challenges in maintaining sufficient cash reserves to meet short-term liabilities The persistently low cash ratio signals a significant concern for Phat Dat, emphasizing the necessity for enhanced cash management strategies and improved liquidity planning to bolster financial stability and effectively manage short-term obligations.

Debt-to-equity ratio of Phat Dat has exhibited variability over the past five years, beginning at 51% in 2019, decreasing to 43% in 2020, rising to 52% in 2022, and then stabilizing at 43% in

In 2023, Phat Dat's debt-to-equity ratio demonstrates significant fluctuations that reflect changes in its financial leverage and capital structure The initial decline signifies a reduction in leverage, followed by a temporary increase in debt relative to equity The stabilization at 43% indicates a return to a balanced financing strategy Overall, this ratio underscores Phat Dat’s evolving capital structure and its commitment to managing financial risk while pursuing growth opportunities.

Phat Dat Group has experienced significant fluctuations in its Return on Equity (ROE) over recent years In 2020, the ROE surged to +27.6%, demonstrating effective utilization of shareholder equity for profit generation However, in 2021, the ROE decreased to +17.6%, indicating challenges and potential performance saturation The situation worsened in 2022, as the ROE plummeted to -49.0%, reflecting severe financial difficulties, including rising costs and reduced revenue This downward trend persisted into 2023, with the ROE further declining to -50.5%, signaling ongoing and potentially escalating financial issues.

Phat Dat Group experienced impressive ROE growth between 2020 and 2021; however, from 2022 to 2023, the company encountered considerable challenges that resulted in a sharp decline in ROE To enhance its financial standing and regain positive performance, the company must tackle these critical financial issues.

Phat Dat Group has experienced a notable decline in return on assets (ROA) over recent years, falling from a robust +31.8% in 2020 to +24.4% in 2021, indicating potential operational challenges or market saturation The situation worsened in 2022, with ROA plummeting to -46.8%, highlighting severe financial difficulties and inefficient asset utilization, possibly exacerbated by the effects of COVID-19 The downward trend persisted into 2023, signaling ongoing struggles for the company.

VALUATION MODEL

To evaluate the share prices of companies in the beer production industry, we will perform a comparative analysis utilizing financial ratios The analysis will focus on firms such as VHM, NLG, KDH, and PDR, which are listed on Vietnam's HOSE, HNX, and UPCOM stock exchanges.

Valuation Models: Two primary models will be employed for valuation:

✓ Discounted Cash Flow (DCF) Model: This method estimates the intrinsic value of each company by projecting future cash flows and discounting them to present value using a suitable discount rate

The Multiples Valuation Model assesses a company's financial performance by comparing it to industry peers through valuation multiples like Price-to-Earnings (P/E) and Price-to-Book (P/B) ratios By calculating the average of these ratios across selected firms, we can create a benchmark for relative valuations.

6.1.2 Free Cash Flow to Equity Model

The Discounted Cash Flow (DCF) method is essential for valuing a company, as it estimates the total value by calculating the present value of the company's free cash flows Additionally, this valuation is enhanced by incorporating the present value of the company’s non-operating assets at the time of assessment.

Using data from financial statements, we project the cash flow for the period from 2024 to

2029 These projections are based on several key factors:

Starting in 2024, companies are expected to experience two distinct phases of growth, with an initial surge at a rate that aligns with the average growth rate observed in the pre-Covid era, reflecting strong performance.

19 pandemic and declines linearly throughout the high growth period until it reaches a stable rate (4%= CPI) at 2025 and years after

We use historical ratios from 2018-2023 to project future costs, assuming stability in expense-to-revenue ratios

Revenue growth rates are driven by historical trends, market conditions, and expansion strategies, while fluctuations in raw material costs, particularly for milk, and supplier contracts play a crucial role Operating expenses are shaped by inflation, efficiency enhancements, and anticipated marketing and R&D costs Additionally, capital expenditures encompass investments in new facilities and the upkeep of current assets Overall economic growth projections significantly influence consumer spending and market dynamics.

We believe the tax bracket will remain with the current bracket of 20%

Forecasted by subtracting last year’s fixed assets from current fixed assets and adding depreciation

Weighted Average Cost of Capital (WACC) and Cost of equity

We utilized the Capital Asset Pricing Model (CAPM) to determine the appropriate discount rate for CTD, using the 10-year Vietnam Government bond rate of 4.8% as the risk-free rate to align with our long-term investment perspective The real estate industry's beta, ranging from 1.1 to 1.3, was calculated through regression analysis of weekly returns for VNIndex and CTD, followed by necessary adjustments The equity risk premium, based on the Darmodaran method, was derived from the S&P 500 risk premium of 9.5% Consequently, the cost of equity was calculated at 15.25%, while the cost of debt was obtained from the lending interest rates of four State-Owned Commercial Banks After considering all relevant factors affecting the capital market, future cash flow, and the performance of the sector, we applied a weighted average cost of capital (WACC) of 15.11% for four real estate companies as of the end of 2023.

To assess the equity value of four companies, we will calculate the average Price-to-Earnings (P/E) and Price-to-Book ratios from similar firms This benchmark will be applied to the financial data of the four companies by multiplying the relevant figures from their latest financial statements, resulting in an estimated overall equity value To find the value per share, we will divide this estimated equity value by the total number of outstanding shares This method offers a detailed valuation by aligning share prices with industry standards, providing investors with a comprehensive perspective.

The Price-to-Earnings (P/E) ratio is a vital metric in financial analysis and stock market investment, assessing a company's valuation by comparing its stock price to its earnings per share (EPS) In contrast, the Price-to-Book (P/B) ratio indicates how much investors are prepared to pay for each dollar of a company's net assets, offering insight into the market's valuation of the company's tangible assets in relation to their accounting value.

The Median and Avergae P/B, p/e of symbonic real estate comapnies shown as below:

Through detailed calculations, we have determined that the intrinsic value of 4 companies's shares are shown as below:

The differences in P/B targets among companies stem from variations in the selection, analysis, and weighting criteria used for comparison In the case of Phat Dat, challenges in identifying comparable companies led us to utilize the median value from a sample of 48 firms for our analysis.

VALUE CONCLUSION

In the thesis, the findings assess the company's current status and future outlook through various valuation techniques to estimate the intrinsic value of its shares Consequently, three distinct results lead to three recommended actions.

• Sell Recommendation: The shares should be sold, as a materially negative return is anticipated over the next six to twelve months

• Hold Recommendation: The shares are expected to neither generate a materially positive return nor a materially negative return in the next six to twelve months

• Buy Recommendation: The shares should be purchased, as a materially positive return is projected over the next six to twelve months

Investment recommendations will be determined by valuation outcomes A "Buy" recommendation is given when the intrinsic value surpasses the current market price by over 5% Conversely, a "Sell" recommendation is issued if the intrinsic value is more than 5% below the market price If the intrinsic value falls within 5% of the market price, a "Hold" recommendation is advised.

General solution conclusion for Viet Nam Real Estate Industry

Experts advocate for collaborative companion solutions among businesses as a sustainable strategy in challenging times By leveraging each other's resources and strengths, companies can mitigate external pressures, enhance internal capabilities, and maximize the unique advantages each partner offers To maintain unity and avoid fragmentation, businesses are encouraged to support one another and explore innovative, sustainable business models The Ho Chi Minh City Young Entrepreneurs Association has initiated various forums to facilitate connections among businesses, fostering resilience and positive economic impacts Additionally, the current crisis has highlighted the necessity for domestic collaboration, enabling companies to share raw materials and strengthen their partnerships for future growth.

To achieve operational efficiency, companies must prioritize profitability, revenue generation, land acquisition for projects, construction quality, and adherence to project completion timelines Additionally, maintaining transparency in corporate governance is crucial for sustainable growth.

Companies must prioritize customer interests by upholding integrity and delivering high-quality construction Key factors include adhering to project timelines, providing smart homes and buildings, creating environmentally friendly living spaces, and offering strong post-sales customer service.

Thirdly, to become socially responsible and achieve sustainable development, companies should strive to be professional and capable real estate developers within their chosen market segment and product line

To strengthen their internal resources and equity base, companies should prioritize collaboration through joint ventures and mergers, aiming to create robust real estate conglomerates Transitioning to joint-stock companies, especially on an international scale, should be a key objective Engaging with the stock market is essential for capital acquisition, marking an inevitable path for the growth and development of real estate firms.

Some of highlighted lesson learnt could be obtained throughout this study:

Real estate companies frequently employ significant leverage, utilizing debt to enhance their economies of scale This study offers insights and recommendations for Vietnamese real estate firms on achieving a balanced debt structure, taking into account the intricate effects of various factors on their capital structure.

Vietnamese real estate companies must prioritize maintaining a balanced debt structure in light of the complex impacts of interest rate fluctuations and ongoing global and local economic uncertainties.

This research delves into the profitability ratios of real estate companies, specifically focusing on Return on Assets (ROA) and Return on Equity (ROE) It highlights how fluctuations in income statements, driven by seasonal trends and ongoing real estate projects, impact financial analysis Additionally, the study recommends adjustments to enhance the accuracy of profitability estimations for these companies.

The Vietnamese real estate market plays a vital role in the country's economic health, significantly contributing to GDP and impacting sectors such as construction, manufacturing, and services Its stability influences urban development, housing affordability, and the living standards of the Vietnamese population By analyzing real estate companies, we can gain valuable insights into the interconnected effects on the broader economic landscape and related industries.

Vinhomes financial statement and 10-year cashflow:

Nam Long financial statement and 10-year cashflow:

Khang Dien financial statement and 10-year cashflow:

Phat Dat financial statement and 10-year cashflow

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IN VIET NAM’, Russian Law Journal, 11 Available at: https://doi.org/10.52783/rlj.v11i11s.1900

Khang Điền Group (KDH) là một trong những công ty hàng đầu trong lĩnh vực bất động sản tại Việt Nam Với sự phát triển mạnh mẽ, KDH tập trung vào việc cung cấp các sản phẩm nhà ở chất lượng cao, đáp ứng nhu cầu ngày càng tăng của thị trường Công ty không ngừng mở rộng quy mô và cải tiến các phương pháp nghiên cứu kinh tế để tối ưu hóa hoạt động kinh doanh Thông tin chi tiết về KDH có thể được tìm thấy trên nền tảng Studocu, nơi cung cấp cái nhìn tổng quan về chiến lược và phân tích thị trường của công ty.

Nhóm 5 DTTC D02, dưới sự hướng dẫn của TS Nguyễn Duy Linh, đã thực hiện phân tích công ty nhằm cung cấp cái nhìn sâu sắc về hoạt động và chiến lược kinh doanh Tài liệu này có sẵn trên Studocu, nơi người dùng có thể truy cập để tìm hiểu thêm về thiết kế hệ thống và các khía cạnh quan trọng khác trong phân tích công ty Để biết thêm thông tin chi tiết, hãy truy cập vào đường link: https://www.studocu.com/vn/document/truong-dai-hoc-kinh-doanh-va-cong-nghe-ha-noi/thiet-ke-he-thong/nhom5-dttc-d02-phan-tich-cong-ty/52668167.