Phân tích báo cáo tài chính phát hiện các vấn đề liên quan mà tập đoàn HAGL đang phải đối mặt và đề xuất các giải pháp cho HAGL e

Table of content6 Chapter II: Analyze financial statement 9 2.3 Ratio of financial leverage and proportation of assest, equity 7 15 Chapter III: Growth strategy in Laos 3.1.Analyze macro

STUDY THE OPERATION OF HOANG ANH GIA LAI GROUP (HAGL),

- Financial year end report to idendify key issues that HAGL are facing with and propose solutions for HAGL

- Growth strategy of HAGL in Laos (opportunities and threats)

- Analyze legislative, political system for investment in Laos and recommend solutions for HAGL

- Analyze risks and impacts on the financial management of HAGL expansion plan

Table of content

6 Chapter II: Analyze financial statement

9 2.3 Ratio of financial leverage and proportation of assest, equity 7

15 Chapter III: Growth strategy in Laos

3.1.Analyze macro micro environment impacts to business environment

18 3.3/ Analyze HAGL strategies and vision to 2020 13

20 Chapter IV: Legal framwork and political system investment in Laos

22 Chapter V: Analyze risks and impacts to the financial management of

HAGL expansion plan in Laos

25 5.3 Poor infrastructure, and supplementary industries 18

26 Chapter VI: Recommendations and suggestions

Chapter I 1.1 Hoang Anh Gia Lai group

Hoang Anh Enterprise, founded by chairman Doan Nguyen Duc in 1993, was converted to a joint stock company and renamed as HAGL JSC in 2006 On 22 Dec

2008, the company’s share were officially listed on HOSE with the code HAG

Establish as a small wood processing factory and now a conglomerate with the total assest of 25,577 billion VND

1.2 Vision:

To become the leading diversified multi sector group in Vietnam with suitable development in rubber, hydro power, mining and real estate

1.3 Mission:

To maintain the continuous creativity, and strive to produce quality products and provide good services and reasonable costs To provide good employee benefits,both

in terms of monetary renumertion and employee development in order to motivate the employees to create values for shareholders and the general society

1.4 Growth strategy:

Main goals of the company:

- Fast and suitable development In 2012 rubber, hydro power and mining operations will be the core business of the group

- Become the leading real estate company in Vietnam

Medium term business plan

Focus on the high profitable operations of real estate, and production and distribution of wooded furniture

Long term business plan

Focus on rubber plantation (51,000 ha) and hydro power (with the total capacity of 420 MW) These industries are critical for suitable and long term development of the group The Group will also focus on the development of the mining business

Chapter II Analyze financial statement

According to the financial data collected from the year end report of Hoang Anh Gia Lai (HAGL) group in the year of 2009, 2010, 2011, the financial issues of the group is reflected as following indicators:

Unit:Billion dong

I Liquidity

II Operation

III Ratio of financial leverage and

proportation of assest, equity

13 Fixed assets ratio /Equity % 53,61 53,83 83,87

IV Income ratio

15 Accumulated income/ net revenue % 45,98 50,59 45,21

16 Net income from business

/Investment

17 Income after tax /Average equity

(ROE)

18 Income after tax/Average assest

(ROA)

20 Growth ratio of income after tax % - 61,69 -36,33 Analyze the abovementioned data, we know that:

The overal assets of the company is constinuously increased in the last three year because the company invests a lot on real estate to supply for the market but the real estate market

is currently faced with many problems thus less demand, their customers are delayed in payment Therefore, payables increased makes the short term assest increased This is one of the problems that the group must to address it

Besides, the group aslo invests on rubber, especially is to increase the plantation area of rubber in Laos but the return is not et due to plantation is just start Therefore, the long term assest will increase accordingly to make it constinuous growth in 3 year

2.1 Liquidity:

The current and quick liquidity in 3 year have been stable in 3 years In 2010 is 2.16 and

in 2011 is account for 1.96 This will help the group to active in liquidity but it will affect

to the effectiveness of the business because the group has a high short term debt (to 31/12/2011, short term debt is 3,201 billion dong) The cause is that the company has to deposit a big amount because the company is strongly investing on the finance so it is needed to have cash for the market However, it should be considered when deposit a

high amount of cash, it is especially on the economic ression, the financial invest have less effective but to be bear with interest

Time to payment for payables during two year is quite long, in 2011 it comes up to 786 day This means the company have use the capacital of their partners which most of them are prepaid investors for real estate projects If this situation lasts long, the reputation of the company will be degraded and real estate products are declining on the brandname of the company which led to difficult for demanding This will lead to increase inventory

2.2 Operation:

The rotation of working capital is very low and in 2011 decreases a compared with 2010 Causes are:

+ The group are dealing with the real estate but the market is down and price reduced strongly, so it is difficult to sell The inventory of real estate is increasing

+ The company is dealing with the financial investment but the stock market degraded thus the inventory is there

The effectiveness of fixed assest is decreased due to the abovementioned probems and the revenues in 2011 also declined as compared with 2010

2.3 The ratio of financial leverage and proportation of assest, equity:

It is based on the financial leverage and proportation of assest of other enterprises is increasing With this situation, if the company can not exploit assest effectively the business will be affected and reduced The pressure of debt will be increased This issue

is assessed by revenues

2.4 Income ratio:

The ratio and the effectiveness of the group is currently good, ROE in 2010 accounts for 32.26%, it is higher than the bank interest, this is good aspest In 2011, ROE decreased and accounts for 15.06%, althought this firgure is acceptable but this predict the upcoming difficult for the group waiting ahead

The EBIT/bank interest shows declining after years So, the use of financial leverage of the company is not good This can be made clearer when to analyze the ROA

ROA in 2009 achieves 13.32% but it down in 2011 accounts for 5.94% To 31/12/2011, total assest of from the equity accounts for 15,493 billion dong, while 3,201 billion from the short term deb (interest is 12%/year) and 8,424 billion long term debt (interest 13%/year) so average equity of the group is 9.55% higher than the ROA

So, the use of financial leverage is not clearly effective because the ROA is lower than average equity This situation lasts long, it will affect to the effectiveness of the group and can be lead to bankcrupcy

2.5 /Payable accounts:

According to the data of the group, 15,000 billion is the total debt of the group up to 31/3/2012, exceeds 63% above total assest This firgure is risky and reate financial burden for the group when it comes to deadlines

However, the cash is 3,000 billion dong and bond converted is 5,565 billion dong, will reduce the burden to the deadline, the balance of 6,435 billion dong, therefore is 25% The chairman reject the information on some newspaper

To liquidate debts of the bank, the Board of Management predict casflow collected from the real estate that customer deposited 70%, estimated cash collected os 8,460 billion dong and sell the finished apartment collected 4,420 billion dong

2.6/Cashflow:

To study cashflow from the business n 2009 t0 2011, we see that it has 1,000 billion in

2009, however, the cashflow is declining from 2010, in 2010 the casflow is 294 billion dong Now, it is 2011 and second quarter of 2012 the shortfall of casflow is 1,200 billion dong, therefore, it is affected to the business, the group is lacking of workig capital, eventhough is for payables such as income tax, salary

Besides, cashflow from the investment in 2012 is 5,600 billion dong, the group continute

to investment for project namely such as rubber, sugar cane, hygro power, real estate and mining Explanation for the shortfall of cashflow, the board of management explains that the difficult is temporary because the revenues collects frm the mining and real estate is 3,600 billion dong in third quarter and use extra 1,200 billion dong from the cash

In general, HAGL cashflow is the critical issue of the group It is the risk that the bank will not guarantee for the operation of the group Moreover, the revenue predict is not happended due to the diffifult economy,investments are ineffective, thus the profit is revised to be reduced annually, predict in 2012 is 1200 billion (5% of total essest and achieves below 12% above equity)

Analyze about the proportation of the equity, we know that the long term fixed assest accounts for 48%/total assest while the long term capital accounts for 73%/assest so the group has used 25% long term capital to support for the short term It is therefore release the pressure for short term payable accounts

2.7 Shorterm debts and payment ability:

Short term assest account for 52%/total assest, while short term debt accounts for 27%/assest so it needs to sell and complete receivables 50% short term debts, the group can pay for short term debts However, HAGL is currently faced with difficulty and challenges because it is difficult to sell real estate and mining The inventory increases

258 billion dong as compared in 2011, till second quarter in 2012 the inventory has increased 4,676 billion dong, while the inventory for ongoing apartment is 3,697 billion dong This is main cause to reduce the cash of the group in 2012

2.8/Future cashflow and mining revenues

The real estate accounts for 60% of revenues for the group since 2010, while other has contributed less for examples the wood products only accounts for 20%, construction accounts for 10% In addition, the hydro power and rubber is for future revenues only, HAGL focus on mining, this is also the strategic direction and vision to 2020

Chapter III Growth strategy in Laos 3.1.Assess the marcro and micro environment which is affected to the growth strategy

3.1.1 Vietnam environment :

The economy of Vietnam in 2012 has to suffer by the impact of the world economic ression, the GDP growth achives 5,2 %, it is reduced as compared with 2011 This has led

to the spending, consumption, buying ability reduced, low income, the economy is on crisis and the market is narrowed, increased inventory,…

The inflation in 2012 accounts for 8,5% while the interest reduced to 12%, this is positive for the whole picture of the economic ression, Vietnam government has to sastify economic growth in order to maintain the social security for the people, the government has implemented many solution package to make the economy stable, in general, the inflation is well controlled but national debet, bad debt of banking system, in balance of the international payment leverage, the fluctuation of exchang rate These are hot issues that the government concern

3.1.2 Oversea environment

At present, HAGL has invested in under development namely Laos, Cambodia, Myanmar the investment environment is better than Vietnam, good natural resources, these governement is strongly support about the tax, land lease over 50 years, the cost for labour force is cheaper than Vietnam

However, policy, and political system yet to complete, these countries are on the process

to complete legislative, and laws thus it is so risky for investment in these countries, besides, the corruption is one of issues that needs to address it

3.2 SWOT analysis

Strengths (S):

- Reputable and liability of HAGL

brandname

- Good knowledge and skill of

employees

- Professional management system

- Good leadership of Boards of

Management

Weaknesses (W):

- Input price is not well controlled

- The marketing is not well implemented

- The market is not national wide, teh market of real estate is more and more difficult

- The company is affected by the family dorminant and management system is complicated, there is too many branches to invest diversifiedly

Opportunities (O):

- The investment country is strongly

support

- Rubber, hydro poower, mining have

opportunity to open market, to

increase revenue

- It is easy to joint venture and joint

stock

Threats (T):

- Pressure for lacking of input materials for production, the hight cost of oil increased

- Competition is more from the rival locally and internationally The economic ression is currently affected to the stability of society

- Exchange rate, bond value are decreased and capital mobilization is difficult

- Legislative in Viet Nam and oversea changed

Through analysis on HAGL we found very strong in terms of size, diversification, has many advantages, as well as prestigious brand has been confirmed, the industries with competitive advantages such as rubber, hydro power and mining industry are difficult imitation from competitors, as the industry is capital investment, long term investment, this is important for the investment countries as it relates to national resources, ecological environment HAGL has many advantages, then there are many challenges companies face issues such as market decline, economic crisis, real estate prices are declining,share price fell sharply, raising capital difficult

Policy issues of the host countries such as Laos, Cambodia, Myanmar unstable and dominated by China Given disputes in the South China Sea, will certainly have much affect the consumption of iron ore minerals,change policies of the Vietnamese government for the exploitation and export of raw minerals is a lesson for the company, revenue is expected to decline, the competitive pressure of the Vietnam rubber group increasingly causeddifficult for rubber exports to the European Union and Japan, leading

to the risk of price competition reduce power manh.Thuy and issues negatively impact environmental change, pollution, tend tofind low-cost clean energy companies with economic difficulties recession and therefore, the demand for electricity will certainly reduce production in time to affect the revenue from this activity

In addition, cash flow problems, the demand for capital projects is a matter of urgency, the doubts about the effectiveness of investment projects in Laos and Cambodia in the exploitation of iron ore, the concerns about investment in the field of rubber, hydropower, the cost of capital is too large and risky.Day is the conclusion of the Standard & Poor's published in the newspaper recently

Currently the company is very difficult to raise capital due continuous shares fell, from the value of 54,000 VND / share, now only 22,500 shares reducing confidence for investors and shareholders revenue decreased ability and access to loans, pressure to pay its debts as challenges to overcome in the short term