Everpia Vietnam JSC 1st half 2011_ver06.0911

The leverage is very low, 0.3 times Growth plan  Everpia Vietnam has revised the target for sales and NPAT in 2011, supported by significant growth in sales in the 1st half 2011: Sales

In the 1st half 2011, Everpia Vietnam jsc has achieved the best

performance ever since establishment This is the first time company’s BOM decide to revise the sales and profit target to a higher level.

Interim

Report

1st half, 2011

EVERPIA VIETNAM JSC (EVE)

TABLE OF CONTENTS

Establishment & Development 4

Listing new shares (Bonus shares + ESOP) 10

Financial Highlights

Preview

 Everpia Vietnam JSC completed the 1st half 2011 in

high note with VND336 billion in sales and VND72.9

billion in NPAT, representing 91.4% and 162.1% yoy

growth respectively The adjusted operating profit

margin showed a strong improvement from 19.3% in

the 1st half 2010 to 27.3% in 2011 The Company

benefited most from operational gearing on the

higher sales

 Significant sales growth is recorded across all key

segments

 Although the gross profit margin was slightly declined

from 40.4% in the 1st half 2010 to 39.6% in the 1st half

2011, EBIT still increased by 170.8% yoy In addition,

thanks to highly positive financial results, NPAT grew

by 162.1% yoy to reach VND72.9 billion

 Current ratio and quick ratio still remained at high

rank with 3.87 and 1.56 respectively The leverage is

very low, 0.3 times

Growth plan

 Everpia Vietnam has revised the target for sales and

NPAT in 2011, supported by significant growth in

sales in the 1st half 2011: Sales target will move from

VND719 billion to VND800 billion and NPAT is

revised upward from VND130 billion to VND160

billion

337

NET SALES

in 1st half (in VND billion)

17.83%

26.42%

19.43%

27.59%

OPERATING PROFIT MARGIN

in 1st half (percent of net sales)

VND billion 2010E 2011E* % change

EPS 7,474 8,481 13.5%

Company's plan revised

IN VND billion, except per share data

6 months ended June 2011

6 months ended

Sales & Earnings:

Financial position at June ended:

Profit margin 27.3%

92%

increased

Cash 36.5 30.3 20.5%

Per share:

Introduction

Name of Company: Everpia Vietnam Joint Stock Company

Number of Employees: 1,183

Business scope: Production & Sales of Padding goods and Quilting CMT

Production & Sales of Bedding goods

Tel: (84-43) 827 6490 Email: info@everpia.vn

Website: www.everpia.vn

Establishment & Development

ESTABLISHMENT

Everpia Vietnam was established in

1993 as a branch of a 100% Korean invested company It became an independent company in 2003 and was converted into a Joint Stock Company

in 2007 In 2010, Everpia Vietnam was officially listed on HOSE with stock code: EVE

Current, over 51% company’s shares belong to Vietnamese investors Shareholders of EVE include renown local and foreigner funds, such as SBI, RRH, FPTC, Agriseco, and BVSC

DEVELOPMENT

Despite starting business with Padding production & sales, EVE’s Bedding business contributed of 72% total revenue in 2010 with the famous brand name EVERON Over the last five years, Everpia Vietnam’s sales

Apr-2007 Jun-2007 Oct-2007 Aug-2008 Jun-2009 Jun-2010 Jul-2010 Jun-2011

48 52.8 54.8 82.2

107.2 123.28

153.28

229.92

Charter capital (VND billion)

increased over 30% per year and NPAT increased over 60% per year

Nowadays, Everpia Vietnam is the biggest bedding and padding company and leads the related markets in both the North and the South of Vietnam

Brands & Licenses

EVERON: premium bedding brand positioning high price & quality in Vietnam;

has become the most popular bedding brand in Vietnam with more than 400

exclusive agents nationwide, and chosen as one of 500 famous brand names

in Vietnam

ARTEMIS: premium bedding brand which targets consumers with high

incomes

DEXFIL: premium padding brand for high performed low denier padding

goods

DACRON: the best global brand for bedding fillers from INVISTA; offers

down-like luxury products such as pillows, comforters, mattress pads, and toppers

THERMOLITE: The best global padding brand from INVISTA Lightweight

warmth in the widest Range of Apparel, sleeping bags, winter accessories,

shoes hunting wear, and high protective outerwear and adventure gear

ADVANSA: Europe’s polyester leader High performance & well-being

polyester for bedding products

Product designs, Product collections and Styles

EVE provides products in a variety of designs

to appeal to a broad range of consumer tastes in the different segments EVE’s product design process begins with marketing personnel identifying customer preferences and marketplace trends and conceptualizing product idea A variety of sketches are produced by company designers, from which prototype are made prior to full-scale production EVE believes our distinctive product design, development and market-launch process provides the company with a competitive advantage New styles in each of EVE’s products categories are continually designed and developed annually to replace discontinued products and collections and, if desired, to expand product categories The product life cycle for bedding continues

to shorten as consumers demand innovative new design, color, style, and fabric that will enhance their lifestyle while providing quality and value

Shareholders Structures

Foreign / Local Ratio

Local 5,277,933 34.4% 2,890,905 18.9% 8,168,838 53.3%

Foreign 3,667,578 23.9% 3,491,580 22.8% 7,159,158 46.7%

Shareholder structure

Navigatio

n

>5% 1,380,000 9.0% 5,397,000 35.2% 6,777,000 44.2%

>1%; <5% 5,765,899 37.6% 1,307,825 8.5% 7,073,724 46.1%

<1% 1,022,939 6.7% 454,333 3.0% 1,477,272 9.6%

List of main shareholders and Ownership

Lee Jae Eun 2,484,000 16.2%

Red River Holding 1,913,000 12.5%

Vietnam Japan Fund 1,000,000 6.5%

20.5%

33.1%

4.7%

18.9%

22.8%

Shareholder Structure

Internal shareholders Individual local Individual foreign Institutional local

46.71%

Local shareholders Foreign shareholders

* Shareholder structure is updated on 4 th July 2011 before additional Bonus Share which is in the process of waiting for listing

Business review

OVERVIEW

Everpia Vietnam is pleased to report excellent results for

the 1st half 2011 with high profits and operating margins

in all segments While inflation was 13.93%, the interest

rate on bank loans was too high, around 22% to 25%,

and the exchange rate beween USD and VND was

adjusted continuously, Everpia Vietnam still performed

successfully Net sales went up thanks to factors such

as volume sales, price, and efficient portfolio products

During the 1st half 2011, EVE’s consolidated net sales

increased 91.4% to VND 366 billion, in which Bedding

occupied 58.3% This is due to seasonality operation of

Padding (from Mar to Aug) and Bedding (from Sep to

Feb)

BEDDING BUSINESS

In the 1st half 2011, revenue from the Bedding business

was VND196.6.1 billion, increasing 103.4% yoy Most of

it came from sales of Everon in the Northern area, which

was VND118.6 billion, an increase of 70.3% yoy Everon

sales in the South (including exportation) was VND66.4

billion, and increase of 82.9% The increase was due

primarily to more orders from customers and the

increase in selling prices in March of bedding line EVE

believes the efficient reorganisation of our sales

department has contributed to that growth, which help

us gaining some market share With these

performances, Everon still maintains its first position in

the middle section of the Bedding market in Vietnam

Bedding; 58.33%

Padding; 41.67%

Sales in 1st half 2011

2008 2009 2010 2011

0

10

20

30

40

50

60

70

80

90

100

Padding Sales in 1st half

0 20 40 60 80 100 120 140

Bedding sales in 1st half

HN HCM Export

2008 2009 2010 2011 0

50 100 150 200 250 300 350 400

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

9.86%

20.36%

12.20%

91.44%

Sales in 1st half

Net sales Growth rate

PADDING BUSINESS

Revenue from Padding business of Everpia Vietnam in

the first half 2011 was VND140.4 billion, an increase of

77.2% yoy A major part (66.8%) of padding revenue

was from the Padding business in the Northern market

Notable padding sales resulted from increase of padding

price and strong orders from new and existing

customers

Financial Status

BALANCE SHEET

Working capital

Working capital rose 9.1%

compared to 31/12/2010 in the first

half due primarily to an increase in

trade account receivables and

inventories, reflecting higher sales

and accelerated production to

prepare for the bedding high

season in the 4th quarter of the

year Compared with a year earlier,

total working capital was up 92%

on the same basis

Due to this seasonal high working

capital in the 2nd quarter, cash and

cash equivalent was reduced from

VND191 billion as of 31/12/2010 to

VND82 billion as of 30/6/2011

Leverage

Consolidated balance sheets

30/06/2011 31/12/2010 30/06/2010

VND bil. VNDbil VNDbil

ASSETS Current Assets

Cash and cash equivalents 36.509 194.842 30.309

-Short-term account

Other short- term assets 20.398 14.447 36.379

Non-current assets

Other non-current assets 6.414 6.772 4.968

RESOURCE

Shareholders’ equity

Chartered capital 229.920 153.280 123.280

Retained earnings 186.804 225.796 151.423

During 1st half 2011 Everpia

Vietnam borrowed VND71.2 billion

from banks to finance raw material

purchase Long-term financial debt

is nil, the financial structure of the

company is very sound with

leverage at only 0.3 times

4.57%

5.69% 22.42%

45.87%

2.55%

17.97%

0.13% 0.80%

Capital Structure

Cash and cash equivalents Short-term investment Short-term account receivables Inventories

Other short- term assets Fixed assets

Long-term investments Other non-current assets

Consolidated Income Statement

Item

From 01/01/2011

From 01/01/2010

% change

to 30/06/2011

to 30/06/2010

Profit from operation 91.867 33.929 170.8%

Current income tax

Net profit after tax 72.853 27.797 162.1%

INCOME STATEMENT

Despite the stiff price increase of fibers and fabrics by over 30% in 1st half 2011, the gross profit margin was moved slightly from 39.7% in 1st half 2010 to 40.7% 2011 thanks to the effective pricing policies of Everpia Vietnam and Board of Director’s decision to import raw material in advance Thus, gross profit in 1st half 2011 increased to VND133.5 billion from VND71 billion in

1st half 2010

Selling, general and administrative expenses for 1st half 2011 increased VND13.9 billion compared to 2010, due primarily to higher selling expenses resulting from higher sales, and higher expense for advertisement and customer service However, SG&A expenses represented only 15% of revenue compared to 20% in the 1st half 2010

As a result, operating profit was VND91.9 billion in 1st half 2011, increasing 170.8% compared to 2010

FINANCIAL RATIO

The current and quick ratios show Everpia Vietnam’s

good capability to meet its short-term obligation

Short term debt was a significant goes up by

VND84.3 billion in the 1st half 2011 compared with

the same period of 2010 but in line with the increase

in current assets by VND314.9 billion, resulting in

gentle decline in the current ratio Although that,

current ratio was still high, at 3.87 times as of

30/06/2011 The quick ratio, increased from 1.33 in

1st half 2010 to 1.56 in 1st half 2011

The company’s return on sale increased to 27.3% in

1st half 2011 compared to 19.3% in 2010, boosted by

the strong performance of the bedding business

department due to a reasonable cost breakdown

policy to ensure profitability from each item

The return stockholder’s equity (ROE) was increased

to 11.8% in 1st half 2011

Main financial ratios

Liquidity ratios

Gearing ratios

Profitability ratios

Assets ratios

Non-current assets/ total

Coming events

PROSPECTS

EVE’s business is well spread across diverse geographic regions and

customers Historically, EVE’s sales growth has been well ahead of the

market In addition, urbanization, improved purchasing power of

Vietnamese consumers along with the continuing change in customers’

tastes in new designs provides further growth opportunities

Having largely protected sales from the fluctuation of input prices, EVE is

well placed to maximize and seize the opportunities in the markets EVE

acted decisively (i.e bought a large amount of fibers at the end of year

2010) to reduce costs with benefits flowing into the 1st half 2011 as sales

have increased and operating efficiencies have been captured EVE have

also developed a new brand, namely Edelin in Vietnam Southern market,

the benefits of which will progressively come through in the 2nd half 2011,

2012 and future years

Material costs were high in the 1st half of this year and EVE anticipates

increase in fiber and fabrics price in the second half of 2011 Although it

remains alert to inflation, interest rate and exchange rate movements, EVE

expects to make good progress for the full year and to see higher sales

and profits in the 2nd half of this year

NEW TARGET OF SALES AND NPAT

During 1st half 2011, Everpia Vietnam JSC already fulfilled 47% of

its annual revenue target and 57% of its NPAT target Entering the

bedding season (last six months) which commonly accounts for

65%of total sales of a year, EVE expects total revenue in the last 6

months to achieve VND 463 bil

Thus, the Board of Everpia Vietnam has decided to increase the 2011 plan

EVE now believes that full-year revenue for the Group will increase by

41.1% compared with 2010 (instead of 26.8%) to VND800 billion, net profit

after tax is revised to VND160billion, 56.4% increase from 2010 NPAT

EVERPIA VIETNAM’S SHARES PLAN INFORMATION

In the 2nd half of 2011, Everpia Vietnam will list additional bonus shares

issued to shareholders on 25th May, 2011 and complete the procedure for

listing of 410,000 shares under the Employee Stock Option Program

(ESOP)

“EVE operates with a strong balance sheet and the NPAT has been increased 164%, fostering the Board’s confidence in growth prospects of our powerful niche business”

Expectations 2011

Previous plan Revised plan

Sales VND719 bil VND800 bil.

NPAT VND130 bil VND160 bil.