Bank for Investment and Development of Vietnam Securities Joint Stock Company

Consumer Goods ICB 3722 October 15, 2013

COMPANY VISIT NOTE

Everpia Vietnam JSC EVE
EVERPIA THE NUMBER ONE IN BEDDING BUSINESS Everpia - the number one Company in the middle-end Bedding business segment with high profit margin 33% and 39% (Bedding and Padding). Besides holding 25% market share in the middle-end bedding business segment, in 2013, the Company has increased its

TRADING GRAPH

market share to 31% in padding business. Thanks to strong brand advantages, large distribution system, the Company's profit margin maintained at a high level and stable. Padding sales performance increased 36% over the same period 2012, while Bedding revenue decreased slightly. According to the Company, accumulated 3Q, Padding revenue reached VND257 billion, much higher than that of last year and nearly reach the number of the main products Bedding of VND264 billion. Update Business performance in the first 9 months. Total revenue of the first 9 months 2013 reached VND522 billion, increased 11% compared to the same period in 2012. Profit before tax was estimated at VND81 billion, and VND59 billion of profit after tax.
27.5 577 732 47.37% 21,100 9,387 26,110 17,250

TRADING INFORMATION
Outstanding (mil shares) Market Capitalization (bil ) Book Value (bil ) Foreign Ownership (%) Current Price (/share) Avg 10 days (shares) Lowest price 52 Wk () Highest price 52 Wk ()

Improve capacity and develop products. The Company said that it will bring to market a number of new product lines such as Towel & Home textile, Furniture with brandname Everon. The new products will take advantage of the 600 retail outlets system nationwide. Besides, the new factory was opened in Hung Yen (5 km from the old factory) rising the Company's capacity to meet the increasing demand of padding production. In addition, the Company is also negotiating with a partner, one of the four leading manufacturers of spring mattresses to implement the spring mattresses projects in Dong Nai (Mattpia factory) Outlook 2013 and 2014. According to our assessment, Everpia will not benefit directly from the prospect of TPP. However, if the agreement is signed, Everpia will gain benefits indirectly from more competitive inputs and more satisfactory padding demand growth.
Fundamental Information
Net Revenue (billion VND) % growth y-o-y Total Asset (billion VND) Total Equity (billion VND) Charter Capital (billion VND) After Tax Income (billion VND) % growth y-o-y Period - end EPS (VND/share) Book Value (VND/share) Gross Profit Margin ROS ROE ROA 2009 424 27% 417 335 107 86 68% 7,944 31,231 41.8% 20.2% 25.5% 20.5% 2010 564 33% 669 574 153 102 19% 6,686 37,420 42.0% 18.1% 17.8% 15.3% 2011 799 42% 850 690 234 151 47% 6,447 29,506 39.7% 18.9% 21.8% 17.7% 2012 680 -15% 899 721 280 75 -50% 2,664 25,762 34.3% 11.0% 10.3% 8.3% 1,428 26,157 36.8% 12.0% 5.5% 4.3% 921 732 280 40 1H2013 333

The Exchange rate USD/VND~ 21,000

ANALYST Luong Thu Huong Equity Analyst Email: huonglt@bsc.com.vn Tel:+ 84439352722 Tran Thang Long Head of Research Email: longtt@bsc.com.vn Tel:+ 84439352722

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Company Visit Note Everpia Vietnam JSC - EVE

UPDATED PERFORMANCE Q3/2013 In October 2013, we had a chance to visit Hung Yen Factory of Everpia Vietnam JSC (EVE), and recored some important information regarding to the business and prospects of Everpia. Graph1: Shareholder Ownership From a FDI Company to a listed Company (1993 to 2013). Everpia starting point was the Hanoi branch of Viko Moolsan Ltd. established in 1993, in the year 2003, Hanoi branch was split with the new name Viko Glowin Hanoi Ltd. In 2006, the Company changed its name to Everpia Vietnam Company Limited. In 2007, the Company transformed into a joint stock company and was listed in Dec 2010, Ho Chi Minh Stock exchange EVE. Concentrated Ownership Structure. Board of directors and the relevant persons hold 37.4% shares of the Company, standing behide is Red River Holding (13.8%), Tien Phong Bank (10.6%),... Shares number of Vietnamese private shareholders accounted only 11.3% of the outstanding shares. Therefore, EVE has very low levels of liquidity, not suitable for the short-term trading investors. Prospects from TPP (Trans-Pacific Partnership Strategic Agreement). According to our assessment, Everpia will not benefit directly from the prospect of TPP. However, if the agreement is signed, Everpia will gain benefits indirectly from more competitive inputs and more satisfactory padding demand growth. Core business activities. The Company's main product lines include bedding, padding, quilting, among which bedding accounted for 40.8% and padding accounted for 31% of revenue in first 9 months of 2013. These products primarily serve middle and high-end segment. The market for bedding in 2012, 2013 experienced a slight decrease in size; however leading enterprises including Everpia still remained quite good revenue and profit. Graph2: Bedding sales performance
600 500 400 300 200 100 0 2009 2010 2011 Bedding Revenue (VNDbn) 326.080 407.909 558.549 473.956 163.283 20.00% 10.00% 0.00% 2012 1H-2013 Bedding gross profit margin 41.62% 39.76% 42.13% 30.68% 33.69% 40.00% 30.00% 50.00% 300 250 200 150 100 50 0 2009 2010 2011 Padding Revenue (NVDbn) 98 38.70% 39.14% 41% 41% 160 243 40.98% 212 172 41% 40% 39% 38% 37% 2012 1H-2013 Padding gross profit margin

Graph3: Padding sales performance

42%

Graph4: Bedding Market share

EVERPIA 25% Others 34%

Bedding. Everpia now holds 25% of market share of middle-end bedding market. The two biggest competitors hold 18% and 15% of market share, respectively. The Company also orient their brand into high-end and mid-end segments (Everon, Artemis, Edenlin ...) In 2012, 2013 the Company coped with various difficulties as the market was strongly influenced by the domestic economic downturn. However, because there was an increase in the demand of hotels, so revenue from bedding has
Company A 18%

declined slightly compared to 2012. According to estimated accumulated 3Q data, revenue from bedding is about VND264 billion and fall 5.6 % yoy. Consumption season of bedding products is the period from September to February of the next year; hence, the Company is promoting sales through its agents. The Company also plans to invest more in marketing mainly to

Company C 8%

Company B 15%

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Company Visit Note Everpia Vietnam JSC - EVE

Graph5: Bedding sales mix by
geography
Southern H Ch Province Minh s 10% 11% H Ni 43%

improve the capacity of existing agents (not to open more agents). Everpia currently has more than 600 agents across the country which mainly concentrated in large cities and Northern markets. Profit margin of bedding products has maintained at high level (about 33.69%). Thanks to the advantage of strong branding, wide distribution network and being facilitated in the import of raw materials from Korea, the Company's profit margin has still remained higher than the market average. Padding. According to estimated data from the Company, accumulated 3Q revenue from padding reached VND257 billion and increased 36% compared to that of the same period. In 2013 the Company has gained market share of competitors. Consequently, EVE has recently taken the lead in the whole market with 31% of market share. Producing season of padding is the period from March to August, which is very suitable for the production of core product (bedding) September to February. Padding market mainly serves export orders and is expected to grow 5-10% per year. The Company's profit margin of padding has stabilized at a high level over the past few years and reached 39% in the first 6 months of 2013. The Company also holds the exclusive right to produce some kind of lightweight cotton such as Invista brand and Thermolite brand apart from Dexfil brand of Everpia Future business development plan. Besides the two traditional products (bedding and padding), the Company is developing three new products on the basis of exploitation of production advantages as well as agent system. These new items are expected to contribute to total revenue about VND15 billion in 2013 and VND21 billion in 2014. o EVERON spring mattress. The Company has invested in a spring mattress factory in Dong Nai named Mattpia. However, this investment was not effective because the technology did not meet the requirements. The Company has acquired Mattpia and increased the ownership proportion from 58% to 100% before cooperating with a foreign partner. The Company said that this counterparty is one of o the four biggest spring mattress manufacturers in the world. EVERON bedroom furniture. The Company plan to hire production partners to produce luxury wooden bedroom furniture under the brand of Everon. The product will be exhibited and sold at the Company's agents to capitalize on the sale ability of agents in major cities. EVERON towel and home textile. The Company recognized that this market was not identified in terms of branding (like bedding market 10 years ago). EVEs products will be woman - oriented or serve families with middle or higher income. Product is expected to be available at agents in 10/2013. Verdict: Thanks to the enhancement in developing a strong agent network; branding for each product segment; targeting hotels resort; promoting exports; application of modern management system (ERP) as well as being affected positively from the fact that Vietnam may join the TPP in the near future, we highly appreciate Everpias potential in the coming period.

Northern Province s 36%

Graph6: Padding Market share

Others 18% EVERPIA 31%

Company C 8%

Company B 13% Company A 30%

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Company Visit Note Everpia Vietnam JSC - EVE

DISCLAIMER The information, statements, forecasts and projections contained herein, including any expression of opinion, are based upon sources believed to be reliable but their accuracy completeness or correctness are not guaranteed. Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the best information then known to us, and in our opinion are fair and reasonable in the circumstances prevailing at the time. Expressions of opinion contained herein are subject to change without notice. This document is not, and should not be construed as, an offer or the solicitation of an offer to buy or sell any securities. BSC and other companies in the BSC and/or their officers, directors and employees may have positions and may affect transactions in securities of companies mentioned herein and may also perform or seek to perform investment banking services for these companies. This document is for private circulation only and is not for publication in the press or elsewhere. BSC accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its content. The use of any information, statements forecasts and projections contained herein shall be at the sole discretion and risk of the user.

RESEARCH DEPARTMENT BIDV SECURITIES COMPANY (BSC)

Long Tran Research Manager l on gt t @b s c .c om .v n Khoa Bui k hoa bn @ bs c .c om .v n Vit Nguyen v i et nh @ bs c .c om .v n

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Sales & Advisory Minh Phan Tel: 0439352722 (155) Email: minhp@bsc.com.vn

Institutional Sales & Advisory Anh Nguyen Tel: 0439352722 (175) Email: anhnn@bsc.com.vn

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