Phân tích báo cáo tài chính công ty cổ phần bánh kẹo hải hà

SWOT Analysis -Prestigious and experienced brand - Diversified products range - Wide consumption network - Relatively stable financial performance - Products mainly serves domestic deman

Financial

Statements

Analysis

Hai Ha Confessionary Joint Stock

Company

Group member:

1 Tran Thi Hong Phuong (leader)

2 Doan Phuong Thao

3 Luong Thu Thuy

4 Pham Thi Ngoc Thao

5 Nguyen Manh Thi

6 Bui Linh Chi

Table of Contents

A Overview 2

I General information 2

II SWOT Analysis 4

III Macroeconomics and Industry Analysis 4

1 Macroeconomics analysis 4

2 Industry Analyses 6

B Analysis 8

I Horizontal analysis 8

1 Balance sheet analysis 8

2 Income statement analysis 13

II Vertical analysis 15

1 Balance sheet analysis 15

2 Income statement analysis 18

III Ratios analysis 20

1 Liquidity ratios 20

2 Activity ratios 22

3 Debt management ratios 24

4 Profitability ratios 26

IV DuPont analysis 31

C Conclusion 34

I Financial position & performance 34

II Risk 34

III Prospect 34

IV Recommendations: 35

REFERENCE 36

HAIHA CONFESTIONARY JOINT STOCK COMPANY

Listed Date: November 20th, 2007

Chartered Capital: In January 2011, Hai Ha issued 2,737,500 shares in addition to its54,750,000 shares The company’s current chartered Capital is 82,125,000,000 VND

1 History

Hai Ha JSC was founded in 1960 At the beginning, Hai Ha JSC was a smallenterprise with the productivity of 2,000 tons per year, now the company has become one ofthe largest confectionery manufacturers in Vietnam with a average productivity of about20,000 tons per year

In 2003, the company performed privatization according to Decision BCN on November 14th, 2003 of Ministry of Industry The company officially operated as ajoint-stock company on January 20th, 2004

In terms of revenue, candies in general are the main product line of Hai Ha over years,with sales up to more than 70% of the revenue of the whole company In addition, wafers,biscuits & crackers are also traditional products of Hai Ha, which generate 22% of the totalrevenue for the company Some successful product brands of Hai Ha JSC are CHEWHAIHA, jelly candy CHIP HAIHA, HAIHAPOP, pine soft cake MINIWAF, etc.

b Market position

Haiha’s strategic products are candies and wafer cake Meanwhile, its competitors KinhDo is specialized in manufacturing biscuits, cracker cake and as for Bibica, its strengthare sponge cake and candies So far, Hai Ha accounts for 7% of total market share in domesticconfectionery industry, after KinhDo and Bibica In terms of candies manufacturing, Hai Ha

-is the second biggest enterpr-ise accounting for 14% market share nationwide, just after

Bibica

II SWOT Analysis

-Prestigious and experienced brand

- Diversified products range

- Wide consumption network

- Relatively stable financial performance

- Products mainly serves domestic demandand average income consumers

- Incomplete organizational structure &management skills

- Lack of foreign investments

- Highly sensitive to input materials pricemovements

- High growth potential of confectionery’s

Industry

- Owner of a “golden land” at Truong

Dinh Hanoi which is expected to generate

promising future income

- Consumers market expansion especially in

the countryside

- Expanding exporting market after

- High inflation and slow-down GDP growth

- Exchange rate risk

- Unpredictable input materials’ pricemovements

- Increasingly competitive market

Vietnam joined WTO

III Macroeconomics and Industry Analysis

1 Macroeconomics analysis

a Exchange rate and foreign currency interest rate

In 2010, the State Bank of Vietnam (SBV) adjusted the exchange rate twice The first timewas in February and the second time was in August The official ceiling trading exchange rateover the last months of 2010 was 19,500 Yet, the exchange rate in free market could reach farmore than this number In February, 2011 SBV once again adjusted the interbank exchangerate with an increase of 9.3% and tighten the exchange rate range to +/- 1% Overall, we cansee that there is an upwards trend in the exchange rate fluctuation Although, now theinterbank exchange rate is monitored on daily basis to prevent sudden change in exchangerate’s impacts on firms and individual’s activities and the government is exercising variouspolicies to stabilize the exchange rate; the trading exchange rate still remains at high level

Decision 750/QD-NHNN which is going to take effect in May requires the financialinstitutions to increase the required reserve ratio of deposits made on foreign currency from4% to 6% Circular 09/2011/TT-NHNN states the maximum deposit rate in foreign currencyfor individuals and organizations (3% for individuals and 1% for organization) These moves

of SBV will force the commercial banks to consider reducing the offered rate for depositsmade on foreign currency and raising the lending rate for loans made on foreign currency tocompensate for the fraction of mobilizing funds used as additional required reserve This, inturn, will discourage businesses from borrowing foreign currency

Considering Hai Ha JSC‘s case:

means that Hai Ha has a very low level of exports Meanwhile, most of the company’sinputs such as wheat, milk, sugar, etc have to be imported from foreign countries.(The company’s COGS over years account for approximately 70-80% of its net sale,which means that the company’s income depends largely on the price of its inputmaterials) The high exchange rate will increase the production costs of Hai Ha whilethe company cannot increase its products’ prices at equivalent level in order tomaintain its market share This will obviously have negative effects the companyoperating activities and income Also, the high lending rate for loans made on foreigncurrency will make it difficult for all imported firms like Hai Ha JSC to borrowforeign currency to make payment

 Secondly, Hai Ha is having a contract of land leasing at VSIP Industry Plant in BacNinh The contract is made on USD with a price of 62USD/m 2 for 47 years since14/12/2010 Although Hai Ha has made a considerable prepayment for this contract,the constant high exchange rate and complicated changes in exchange rate movementscan be a challenge for Hai Ha’s capacity of fund management as well

b Interest rate

Interest rate in 2010 had unpredictable movements and in 2011, the ceiling depositrate now is 14% and the lending rate is around 18-22%, which are quite high However, highinterest rate does not really have large effects on Hai Ha JSC activities as the company doesnot hold many debts Hai Ha mainly hold short-term debts which is not very sensitive tointerest rate changes Moreover, the company’s short-term debt is money borrowed from itsemployees with the interest of 0.54%/month; thus, this borrowing can be considered quitesafe Besides, Hai Ha does not invest much in financial instruments; the company mainlyinvests in fixed assets such as equipment to improve its operating performance and thus, is notsubject to interest risk

c Inflation and GDP growth

GDP growth of Vietnam in 2010 is 6.78%, increasing 13 billion VND compared to

2009 However, the inflation rate is 11.75% which is more than twice as much as what theAssembly aimed at the beginning of 2010 (5%) In the first quarter of 2011, the GDP growth

is 5.43% which is the lowest level in recent years, also, the inflation rate is already 6.12%,account for nearly 90% of what the government set target for 2011 (7%) It seems that the 2-digit inflation rate situation will continue to happen in 2011

High inflation together with slow down GDP growth will affect the purchasing power

of consumers especially when Hai Ha’s products (confectionery) are not necessities.Consumers will cut down on them as much as possible since they are not of their essentialneeds This will negatively impact not only Hai Ha but also other companies in the sameindustry

2 Industry Analyses

a Wheat price

In 2010, wheat’s price movements were very complicated In August, the wheat futureprice increased abnormally due to the shortage of suppliers in the market Unstable climateconditions caused the wheat price to keep increasing as demand exceeded supply Such wheatexporters as Russia, China, Ukraine and Kazakhstan had to suffer from severe drought Theoutput of Canada – the largest wheat exporter – in 2010 also decreased by 36% compared to

2009 due to heavy rains in North America Overall, the world’s output of wheat in 2010dropped by 5.3% compared to 2009

During the first months of 2011, wheat price constantly rises as a result of the chaos inthe political climate of Middle East and North Africa regions However, in April, there begins

to have good sign in the wheat’s price movements The price starts to decrease and becomesmore stable thanks to the increase in wheat output of countries in the EU zone namely France.France has exported 10.6 million ton of wheat at the beginning of April, increasing by 17.8million compared to the same period last year

Overall, despite the positive sign in the wheat price movements in April, at themoment, no certain conclusion can be made on wheat’s price movement in 2011 Hence,confectionery firms like Hai Ha JSC still need to catch up new information continuously todecide which time will be appropriate to purchase inventory especially when the COGS ofthese firm often accounts more than 70% of their net sale and there is no hint of a decrease inimport tax on wheat from the government (5-15%)

b Sugar’s price

Sugar’s price in 2010 was high as demand exceeded supply Total domestic outputscould only meet 75% of local demand Although in July, the Ministry of Industry and Tradeallowed importing of 100,000 tons to stabilize the price, it still stood at high level till the end

- In Vietnam, Circular 29/2011/TT-BTC issued by the Ministry of Finance which tookeffect on 15/4/2011 has reduced the preferential import tax rate on sugar to 15%

- Ministry of Agriculture and Rural Development estimated that the total output of

although the sugarcane crop hasn’t finished yet, the total domestic outputs are already860,400 tons (~86% of the ministry’s estimation) According to Vietnam SugarAssociation, Vietnam now is having about 400,000 tons of sugar in stock Togetherwith 250,000 tons which were licensed to import, the sugar supply in 2011 will behigh.

B Analysis

I Horizontal analysis

1 Balance sheet analysis

6,579,136,478.

00

5.47

5,121,270,121.

00

4 26

84,077,050.

00

0 43

7,531,001,693.

00

11 87

244,324,968.

00

2 1.63

723,920,684.

00

64 09

31,856,827,418.

00

6 8.32

20,375,640,004.

00

43 70

31,848,617,925.

00

7 4.76

19,841,108,876.

00

46 58

8,209,493

.00

0.20

534,531,128.

00

13 27

38,435,963,896.

00

2 3.04

25,496,910,125.

00

15 28

1.68 00 3.54 0) 44) 00 77

Current liability (804,165,78

3)

(1 04)

(5,374,990,778.0

0)

(6 98)

(4,631,573,847.0

0)

(6 01)

Equity 26,332,564,7

93

3 6.16

35,108,587,028.

00

4 8.21

44,719,233,386.

00

61 41

33,859,873,225.

00

4 9.34

42,108,220,876.

00

61 36

59,135,026,317.

00

86.

17 Retained earnings 2,614,395,055 - 1,642,500,000.00 - 238,830,899.00 - 10,056,514,234.00 -

2,611,012,510.

00

62 28

(4,192,621,378.0

0)

(100.0 0)

Liability + equity 27,910,335,1

72

1 6.73

38,435,963,896.

00

2 3.04

25,496,910,125.

00

15 28

57,543,346,586.

00 34.

49

The data suggests that the company has trend to increase its assets,

especially its asset increase strongly by 30.5% in 2010 This expansion was

financed primarily by the contribution of owner’s equity rather than debts

Figure 1: Percentage change of debts and owner’s equity of HHC from

2007-1010

As you can see on the chart, while the owner’s equity was increasing

at high rate (from 36.73% in 2007 to 75.45% in 2010), the debt of the

company was reducing, especially the non-current debt reduced sharply in

2009 The decrease in debts accounts might result from the payment to the

creditors of the company You can see that in 2008 when the debts decreased

dramatically, the cash account also fell down and only recovered in 2010

when the current liability increased by 16,468,520,713.00 equivalent to

21.38% There is a relationship between the debts account and the cash

account

Figure 2: Relationship between debts and cash (%)

The increase in cash was also referred from the reduction in the account receivable,means that the debtors paid the debt to the company from 2007 to 2010 You also can see therelationship between cash and account receivable through the following chart

Figure 3: the relationship between cash and account receivable: inverse relationship, when the account receivable decreases, the cash increases and vice versa

The increase in company’s asset was also contributed by the increase of retainedearnings Although the retained earnings fell down in 2009 but it rocketed to more than 10billion in 2010 from the bottom of 238,830,899 in 2009

Figure 4: Retain earning of HHC from 2007-2010

2 Income statement analysis

2006 (base year)

Increase/

decrease in 2007

Increase/

decrease in 2008

Increase/

decrease in 2009

Increase/ decrease

2010 (nearly 61% compared to base year) Moreover, deduction from revenue was

also decreased resulted in increasing net revenue

 Cost of goods sold also increased dramatically every year In 2011, cost of goods sold

peaked up to 63.2% (of COGS in 2006) due to increasing price of raw materials in

production

 Financial income was fluctuated over 5 years In 2008, because of financial crisis,

financial income of company decrease about 35% However, in 2009, company

quickly recover and gain 25% increase in financial activities This data might be

positive result of stimulus package of government for national corporations

 Except 2008 in crisis situation, financial expense of company reduced every year show

good sign of company’s controlling capital

 General and administrative selling expense increased over years and reached up to

121% compared to base year Increasing in expense led to 43.11% increase of net

profit from operating activities (lower than 2009) even though revenue in 2010 much

higher than in 2009

 In 2009 and 2010, company was suffered from heavier tax burdens (increase about

140% to base year) Taxation leads to lower net profit after tax of 2010 (compared to

2009)

Overall, company perform fairly well over the last 5 years, however, it should improve

management’s systems in order to gain more profit in gross margin, lower COGS as much as

possible to deal with tax burdens

II Vertical analysis

1 Balance sheet analysis

Other current asset 0.68 0.94 0.67 0.96 1.59 Non-current asset 27.94 43.35 38.23 34.83 30.08