BÀI tập tài CHÍNH DOANH NGHIỆP PHÂN TÍCH TÌNH HÌNH tài CHÍNH và ĐÁNH GIÁ KHẢ NĂNG đầu tư vào CÔNG TY cổ PHẦN dược PHẨM IMEXPHARM e

" TASK 2 With the selected firm X in Task 1; your project titled: "Buy, sell or hold shares of Company X through the use of Enterprise-valuation models." TASK 1: TASK 1 PART I: INTRODU

BÀI TẬP TÀI CHÍNH DOANH NGHIỆP - PHÂN TÍCH TÌNH HÌNH TÀI CHÍNH VÀ ĐÁNH GIÁ KHẢ NĂNG ĐẦU TƯ VÀO CÔNG TY CỔ PHẦN DƯỢC PHẨM IMEXPHARM

TASK 1

Each group selects a company listed on the Stock Exchange in Ho Chi Minh City (STC) to implement the project entitled "Assessing the financial health of the company X through the analysis of the Financial Statement in order to make investment decisions "

TASK 2

With the selected firm X in Task 1; your project titled: "Buy, sell or hold shares of Company X through the use of Enterprise-valuation models."

TASK 1:

TASK 1

PART I: INTRODUCTION TO THE PHARMACEUTICAL INDUSTRY AND THE JOINT STOCK PHARMACEUTICAL CORPORATION-IMEXPHARM

World Pharmaceutical Industry had high growth in 2000 – 2007 but has gradually slowed, particularly in the U.S and European regions Revenue from the pharmaceutical industry in

2009 was estimated at 760 billion U.S dollars, down 1.68% compared to 2008 RNCOS predicts the growth of the pharmaceutical industry in developing countries in the period 2009 – 2012 will

be 12% - 15%, while the world only 6% - 8%

Vietnam’s pharmaceutical industry went through many stages of development from an early production to integration of the world’s pharmaceutical industry

- Period 1975 – 1990: Vietnam’s pharmaceutical industry during the subsidy period

- Period 1991-2005: pharmaceutical industry entered a period of renewal, transitioning from subsidized to market mechanisms

- Period 2006-2007: The pharmacy continued to grow at high speed, about 18 -20% / year

Vietnam’s accession to WTO brought advantages as well as difficulties for the pharmaceutical industry Period 2008-2011: Vietnam’s pharmacy preparation and active integration with other countries in the region and the world to ensure adequate supply of quality drugs and safety

FACTORS AFFECTING THE PHARMACEUTICAL INDUSTRY IN THE COUNTRY

- Pharmacy is one of the few industries not much affected by the economic crisis

- The standards of living of the people of Vietnam have been increasingly improved, creating favorable conditions for pharmaceutical development

- Pharmaceutical industry is subject to the strict control of the Government

CURRENT SITUATION PHARMACEUTICAL INDUSTRY IN VIETNAM

Vietnam's pharmaceutical industry developed at low medium stage Health spending accounted for 1.6% of GDP (2009)

Raw materials for the pharmaceutical industry were imported mainly from Asian countries Vietnam's pharmaceutical industry met only 50% of domestic market demand Distribution system of Vietnam's pharmaceutical companies overlapped, companies competed with each other for market, did trading around

However pharmaceutical spending on medical services, pharmaceuticals increasingly went up Pharmaceuticals are classified into categories of goods under stabilizing prices policy by the Government

IMEXPHARM PHARMACEUTICAL JOINT STOCK COMPANY

- Abbreviation: Imexpharm.

- stock symbol: IMP (registered at HCM - HOSE)

- Head office: 4 , 30/04 street, ward 1, Cao Lãnh, Đồng Tháp

Tel: +84-(0) 67- 3851 620, +84-(0)67 3851 941

Fax: +84-(0) 67- 3853 106

Website: http://www.imexpharm.com

Email: imp@imexpharm.com

1 HISTORY:

1975 – 1986 : pharmaceutical Company Level II

1986 – 1992 : Union of pharmaceutical Companies of Đồng Tháp

1992 – 1999 : Đồng Tháp pharmaceutical Company

1999 – 2001 : pharmaceutical CompanyNo 7

From 25/7/2002–present: Joint stock pharmaceutical Corporation IMEXPHARM Volume of current stocks up to 31/12/2011: 15.214.500

Total listed value: 152.145.000.000 đ

Management Board:

Chairperson: Trần Thị Đào

Member of the Board: Nguyễn Quốc Định

Member of the Board: Nguyễn Kiêm Phương

Member of the Board:Nguyễn Thị Thu Hồng

Member of the Board:Phan Hoàng Minh Trí

Member of the Board:Trần Anh Tuấn

Member of the Board:Võ Hữu Tuấn

Inspection Chief: Nguyễn Đức Tuấn

Inspection member: Đỗ Thị Thanh Thúy

Inspection member: Lê Thị Kim Chung

2 Scopes of business:

Production, Trading, Import and Export of pharmaceuticals, devices and medical equipment, raw materials, packaging production of medicines, traditional medicines, veterinary medicines and cosmetics

Food, functional foods, beverages, alcoholic beverages, carbonated soft drink, antiseptics, disinfectants and to providing service storage for drugs, drug raw materials

Growing and processing medicinal herbs and tourism resort, financial investments and real estate business

3 IMEXPHARM POSITION:

- Imexpharm was voted a strong brand in

Vietnam

- - - Imexpharm was the 1st pharmaceutical

Company of Vietnam to get standards of good

manufacturing practice (GMP ASEAN) in

1997

- - - Imexpharm was the 1st Pharmaceutical

Company of Vietnam to have franchise

production with European Pharmaceutical Groups.

- Obtained Good Manufacturing Practice GMP-WHO GMP, GLP, GSP, HACCP

ISO 9001: 2008 and 22000

- Products:

Manufacturing more than 200 products, variety of species, European quality standards by:

Franchise manufacturing for corporations: Sandoz (Biochemie), Robinson Pharma, Pharma DP, OPV, Galien,

Imexpharm products: The main products are antibiotics, Analgesic, Antipyretic,

Antiinflammatory, Musculoskeletal, vitamins, minerals, special therapy, and other products

Joint Venture Products: diverse product line of the brand PMS-Imexpharm (Joint venture

between Pharmascience Imexpharm and Canada)

Export goods: Besides the franchise product line, Imexpharm has boosted to produce standard products to export to foreign markets such as; Cambodia, France, South Africa, the Middle East, Moldova,

- Sales and marketing: good, broad product coverage in the local market

- Human resources: employees with high qualifications and have dedication to the Company Develop policies to attract labors to the company

4 DEVELOPMENT STRATEGY AND INVESTMENT:

- To be a Pharmaceutical manufacturer of high quality, reasonble price, customer-oriented service, improving added value for customers and partners

- To become the leading pharmaceutical company in Vietnam that multinational pharmaceutical partners choose as their strategic partner in franchising production of their products in Vietnam and internationally

- Culture and business philosophy: having distinguished characteristics of Imexpharam.

- Imexpharm always involved, shared responsibility with the society and community on its way

to development and success

PART II: BASIC ANALYSIS

I ANALYSIS OF NON-FINANCIAL FACTORS

1 PRODUCTION CAPACITY:

With sufficient investment in the plant, equipment, people, so the current production capacity of IMP can provide many times more than the amount consumed

2 TECHNOLOGY:

IMP is the first unit of the pharmaceutical industry to invest effective lines of modern

technologies such as:

- Line versatile herbal extracts

- Production line of capsule

- Effervescent production line

- Pharmaceutical Ethanol system

- Equipped with advanced testing machines used for quality control of products such as:

The system high-pressure liquid chromatography, Gas chromatography system, Absorption spectrometer, the machine voltage titration

3 HUMAN RESOURCES:

IMP team has nearly 500 employees, of which over 100 officials having university graduate and post graduate and experienced, dedicated to ensuring the credibility and customer satisfaction from research and development, quality control, storage, product delivery to customer care and service

II ANALYSIS OF THE FINANCIAL REPORT

BALANCE SHEET

Assets

Current assets

Cash and equivalents 140,281 111,007 135,040 110,881 Short term financial investments 3,035 3,601 12,808 25,707 Short term Receivables 194,275 199,981 175,895 106,864

Long term Receivables

(Accrued armortization) -117,314 -94,355 -91,995 -82,332

Real estate investment

Long term financial investments 33,040 33,810 37,648 39,176 other long term investments 14,861 14,430 14,291 27,074 Trade advantage

Total long term Assets 260.930 253.312 204.278 198.227

Payables

Short term debts 116,644 160,035 182,931 81,905

TOTAL SHORT TERM

Capital

Other funds

Interest of Minority Shareholders

TOTAL LIABILITIES AND

Business Results

Cost of Goods sold 388,430 411,098 366,643 319,809

Operating expenses

Finance expenses 7,178 8,029 9,685 13,913

In which interests accounted 723 2,443 1,797 533 Sales expenses 234,582 220,270 181,877 145,012 Managemnet expenses 48,098 35,441 29,965 24,969

Total operating expenses

289,85

8

263,74

0

221,52

7

183,89

4

Total financial revenue 12,941 10,140 11,246 16,988 Business revenue 111,018 99,297 83,152 75,128 Other profits (530) (1,177) (2,623) (4,355)

Total Income before Tax 110,488 98,121 80,528 70,773

Corporate Income Tax 32,882 17,655 14,822 12,507 Interest of Minority Shareholders

Income after income Tax 77,606 80,466 65,707 58,266

VERTICAL ANALYSIS BUSINESS RESULTS

%

2010 %

2009 %

2008 %

Income & other expenses 1 0.28 0.24 1

ANALYSIS OF RESULTS OF BUSINESS OPERATIONS BY TIME

2011

% 2010 % 2009 % 2008 %

Industry average

2008 –

2011 (%)

Cost of goods sold 21.46 28.54 14.64 1

Management expenses 92.63 41.94 20.01 1

- Evaluation 1 :

+ Through vertical analysis of the results of business operations it showed that the ratio of cost to revenue from

2008 to 2011 tended to decrease from 57% to 50% proving that the company has demonstrated savings in cost, reducting products cost Selling expenses increased each year also showed the company has had programs of promotion, marketing, customer support policies to promote the consumption of goods

- Evaluation2:

Through sequence analysis of the results of business operations &the growth chart of sales / profitability showed stable revenue growth: 35.98% in 2010, 38.18% in 2011 compared to industry average of 23% and these were good results to promote However, management cost at 61.77% in 2011, while in 2010 at 41.94% was due to management cost in 2011 increased 60% compared to 2010 (as per annual financial report 2011), this should be considered carefully because it affects the profitability of the Company

+ In summary, the report of the results of business operations from 2008 -2011 showed constant revenue growth each year and it was higher than the industry average Likewise profit also increased from 13.78% (2009), 38.64% (2010) and 56.12% (2011) higher than the industry average of 30%

FINANCIAL INDICATORS

Allocation of Assets and Capital

Structures

2011

%

2010

%

2009

%

2008

% Assets Structure

- Total current assets/Total Assets

- Total long term assets/Total

Assets(%)

31,53 33,73 27,93 33,24

Capital structures

- Current debts /Total liabilities and

owners' equity (%)

14,09 21,31 25,00 13,74

- Long term debts / Total liabilities

- Equity/ Total liabilities and owners'

equity (%)

85,66 78,46 73,52 85,94

- Evaluation3:

Structure of assets: the company planned to develop intensive and long-term investment in machinery and equipment, transport means, to purchase land to expand production scale As per the Balance Sheet, total assets increased annually: 596,411 (2008), 731,469 (2009) 751,000 (2010), 827,689 (2011), while the ratio of total of long term assets to the total assets did not change much: 33,24% (2008) 27,93% (2009) 33,73% (2010) 31,53% (2011)

Regarding capital structure: the ratio of short-term debts/total capital: 13.74% (2008), 25% (2009), 21.31% (2010), 14.09% (2011) areall smaller than the ratio of total current assets / total assets: 66.76% (2008) 72.07% (2009) 66.27% (2010) 68.47% (in 2011).These showeda good financial capability of the company, its strong growth of equity, for investing in short-term and long-term projects

FINANCIAL INDICATORS

TT

Indicators

ĐVT

2011 2010 2009 2008 Industry

average

2008 -2011

- Evaluation 4:

Current ratio and quick ratio ofthe company decreased in 2009 but increased in 2010 and higher than the industry average It showed that the liquidity of the company improved

II Operating Ratios

Total Assets turnover times 1,07 1,02 0,9 0,94 1,56 Total Fixed Assets turnover times 3,64 3,73 4,33 4,26 Inventory turnover times 1,75 2,38 1,87 2,16 5,05 Receivables turnover times 3,99 3,82 3,75 5,26 5,39

- Evaluation 5:

+ Efficiency of total assets in 2011: 1.07 which was higher than in 2010: 1.02; 2009: 0.9 and 2008: 0.94 but still lower than the industry average 1.56 This demonstratedthe use of assets of not much effective The company should take measures to improve this situation

+ Efficiency of fixed assets of the company tended to decrease: in 2008: 4.26, 2009: 4.33; 2010: 3.73 and 2011: 3.64 This proved the use of fixed assets less effective, requiring remedial measures immediately

+ Inventory turnover in 2011: 1.75 which was lower than in 2010: 2.38; 2009: 1.87 and 2008: 2.16, and lower than the industry average 5.05 This showed the irrationality and inefficiency

in the management of reserve goods Besides production and consumption of goods should also be reviewed to provide a solution to handle the issue properly and timely

+ Receivable turnover in 2009: 3.75; 2010: 3.82; and 2011: 3.99 which was not be improved and lower than the industry average (5.05) This is a significant problem, because the increase

in receivables in 2009: 60% , 2010: 87%, 2011: 82% greater than revenue growth in 2009: 17%, in 2010 : 36% and 2011: 38%, showing stagnant capital in the payment process

III Profitability Ratio

Income before tax/Total assets

Income after tax /Equity (ROE)

%

Evaluation 6:

Profitability ratio, return on assets - ROA increased steadily, but still lower than the industry average The reason is that sales and management expenses increased more than the revenue growth, which affected the profitability of the Company and the inefficient use of assets

+ Ratio of return on equity - ROE is of the most important for shareholders, this ratio measured profitability on every dollar of shareholders’ capital The financial statements showed the increase of profits over the years: 2009: 13.78%, 2010: 38.64%, 2011: 56.12%, besides equity increasefrom 2009 : 5%, 2010: 15% in 2011; 38% made ROE indicators over the years lower than the industry average of 18.8%

IV Debt Ratio

- Evaluation7:

Debt ratio on total assets: This ratio is used to determine the obligations of business owners for the creditors in the capital contribution For Imexpharm, the debt ratio over the years was lower than the industry average of 35%, demonstrating the Company's operations are relatively

stable

+ Debt to equity was lower than the industry average of 39%, indicating good financial

situation, thus the bank will easily support the Company

V /Stock index

- Evaluation 8:

EPS showedthe profit per share each year investors are entitled to This indicator is rated as high as possible because earnings per share then would be higher

Through EPS growth chart –its current price is taken from http://www.cophieu68.com, EPS increased continuously in 2008: 3880; 2009: 4371; 2010: 5383; 2011: 5419 while the industry average EPS is: 5220 This index was higher than the industry average, showing that high stock returns of IMP which was one

of the factors that help investors study the growth trend in the future to invest in shares of IMP