UNIVERSITY OF ECONOMICS AND FINANCE

Topic: Hoa Phat Group Joint Stock Company (HPG)

Members:

No Full Name Student’s ID Contribution

1 Nguyễn Lâm Minh Hạnh 195030903 100%
2 Phạm Quyết Tiến 100%
3 Trần Anh Thư 100%
4 Nguyễn Thị Ý Nhi 100%
5 Đỗ Thùy Ngân 100%

Lecturer: Tran Minh Tu

HCM City, …/…/2020.

1
I. Introduction
1. General Information:
Hoa Phat is the leading industrial manufacturing group in Vietnam. Originating as a
construction machine and equipment trading company in August 1992, Hoa Phat has
gradually expanded its business to trading and production of Furniture, Steel Pipe , Steel,
Refrigeration, Real Estate and Agriculture. Since November 15, 2007, Hoa Phat has been
officially listed on the Stock Exchange under the stock ticker symbol ‘HPG’.
Currently, Hoa Phat Steel production is the core, accounting for over 80% revenue and profit
of the Group. The main products in Hoa Phat's steel production chain include construction
steel, hot rolled coil (HRC), prestressed concrete steel, drawn steel wire, steel pipe and color-
coated corrugated iron.
For many successive years, Hoa Phat was recognized as a National Brand, one of the Top 50
largest and most effective enterprises in Vietnam; Top 10 largest private companies in
Vietnam, Top 50 most valuable brands in Vietnam ... With the business philosophy of
"Harmony for joint development", Hoa Phat spends 10 billions VND every year to fulfil its
corporate social responsibilities to the community.
2. Mission and vision:
 Mission: To provide leading products, contribute to improved life quality and gain
customers’ trust
 Vision: To become an industrial manufacturer with a leading product quality as its
steel production being its core business sector.
 Core value: The core value of Hoa Phat Group is the philosophy of Harmony for
Joint Development. This is reflected in the relationship among the employees,
between the Group and its partners, agents, shareholders and the social community,
ensuring the harmony of interests of stakeholders on the same boat, towards
sustainable development. Especially, Hoa Phat Group has built a long-term,
sustainable and trusting partnership with the sales agents who have been with the
Group since the beginning of its establishment.
3. Operating models:
Iron and steel
 Hoa Phat Hung Yen Steel Co., Ltd
 Hoa Phat Hai Duong Steel JSC
 Hoa Phat Dung Quat Steel JSC
2
  An Thong Mineral Investment JSC
Steel Products
 Hoa Phat Steel Pipe Co., Ltd
 Hoa Phat Steel Sheet Co., Ltd
 Hoa Phat Metal Producing Co., Ltd
 Hoa Phat Container Production JSC
 Hoa Phat Refrigeration Engineering Co., Ltd
Agriculture
 Hoa Phat Hung Yen Feeds Co., Ltd
 Hoa Phat Development of Livestock JSC
 Hoa Phat Trading Co., Ltd
 Hoa Phat Poultry Co., Ltd
Real estate
 Hoa Phat Urban Development and Construction JSC
 Hoa Phat Ha Noi Real Estate Development JSC
 Hoa Phat Sai Gon Real Estate Development JSC
4. Organization structure:

(Cre: Hoa Phat’s Annual Report 2020)

3
II. Sustainable development
1. Definition:
Sustainable development is a development that meets the needs of the present without
compromising the ability of future generations to meet their own needs on a basis of a
harmonious association between economic growth, solving social and environmental
problems.
 Economic - Substainable development is a process of achieving steady economic
growth, ensuring macroeconomic stability such as inflation, interest rates, government
debts, the balance of trade and increasing productivity by applying more technology
techniques and scientific researchs without harming society and the environment.
 Society – Substainable development is a development that ensures social equality,
eliminates hunger and reduces poverty, creates jobs, increases incomes for workers,
and guarantees that people have the opportunity to fully access essential services such
as health care and education without harming the economy and the environment.
 Environment – Substainable development is the rational use of natural resources,
maintaining a stable resource base, and avoiding over-exploitation of renewable
resource systems. Environmentally sustainable development needs to maintain
biodiversity, atmospheric stability and other ecological activities. In addition, it also
needs to deduct environmental pollution including urban and industrial pollution and
minimize the impacts of climate change and natural disasters.
2. Corporate substainable development:
2.1. Economic – Substainable development

Net income after Tax from 2016 to 2020

16,000
14,000
Unit: Billion VND

12,000
10,000
8,000
6,000
4,000
2,000
0
2016 2017 2018 2019 2020

Chart 1: The fluctuation of Hoa Phat’s Net Income after Tax from 2016 to 2020
In the recent 5 years, Hoa Phat's net income after tax has tended to increase with an average
growth rate of 24% per year, except in 2017 there was a sudden decrease due to the impact of
4
costs on the net profit of the company.This statistics shows that Hoa Phat has contributed to
the development of the national economy by This also shows that Hoa Phat has considerably
contributed to the development of the national economy by developing the domestic
consumption economy and promoting the export of goods.

The fluctuation of Corporate Income Tax from 2016 to 2020

2,000

1,600
Unit: Billion VND

1,200

800

400

0
2016 2017 2018 2019 2020

Chart 2: The fluctuation of Hoa Phat’s Corporate Income Tax from 2016 to 2020
During the last 5 years, Hoa Phat's corporate income tax has grown steadily year by year with
an average growth rate of 14% per year. It can be seen that with the development in business,
Hoa Phat not only develops the national economy but also fulfills its tax obligations and
contributes to the state budget.
2.2. Society - Substainable development
Besides production and business activities, Hoa Phat always implements corporate social
responsibility in a practical way with the motto "Harmony and development".

The number of Employees from 2016 to 2020

30,000
25,000
20,000
15,000
10,000
5,000
0
2016 2017 2018 2019 2020

Chart 3: The fluctuation of the number of Hoa Phat’s employess from 2016 to 2020
Over the last 5 years, the amount of employees of Hoa Phat has tended to increase with an
average growth rate of 18.65% per year and the number is expected to increase sharply in the
next few years when the Hoa Phat Dung Quat 2 Iron and Steel Complex project is
implemented in 2022. These figures show that Hoa Phat is very focused on fostering and
5
developing human resources. To be more specific, the company regularly opens training
classes for employees and as of December 2020, there are 100 classes were held to improve
skills for thousands of employees. In addition, Hoa Phat also attaches preferential policies
and benefits for employees. All employees are entitled to participate in Social Insurance,
Health Insurance, Unemployment Insurance, Health Insurance,… Beyond the above policies,
the Group also rewards collectives and individuals with outstanding achievements or
initiatives to improve and apply successfully in production. This helps the Group earn more
than 150 billion VND from dozens of employee improvement initiatives.
In 2020, the total amount Hoa Phat spends on social and charity activities will reach
approximately 32 billion VND. Hoa Phat has donated 11 billion VND in cash to Da Nang,
Quang Nam and Quang Ngai to cope with the spread of the Covid 19 Pandemic. Practical
support activities in cash and medical equipment for the local anti-epidemic in Hai Duong,
Bac Giang, Thai Binh,.... At the same time, Hoa Phat also spent 9 billion VND for localities
to overcome the consequences of storms and floods. In addition, Hoa Phat continues to carry
out charity programs such as "Love beats", "Rural bridge construction" and "Spring of love"
in order to support unfortunate lives.
2.3. Environment – Substainable development
For the environment in steel production, the Hoa Phat Integrated Steel complexes in Hai
Duong and Quang Ngai all use closed circulating blast furnace technology. All waste, waste
gas and water are treated to meet the current standards in heavy industrial production. With
the clean coking & heat recovery technology (Coke Dry Quenching using Nitrogen), the
power of Hai Duong Steel Integrated Complex was 64MW. In 2020 alone, the power output
of this Complex reached 478 million KWh, equivalent to 70% used for production. In
comparison with current productive electricity, the Complex saved more than 800 billion
dong (Hoa Phat’s Annual Report 2020).
To ensure the “green” element in the steel production of Hoa Phat, water and air were treated
using cutting-edge environmental protection equipment worth hundreds of millions of USD
and the production of one ton of steel in Hoa Phat used less coal and electricity which
contributed to the “green” production. With this, Hoa Phat itself provides 80% of electricity
for steel production and only needs to buy 20% from EVN. The electricity generated by Hoa
Phat is “green” because it does not use coal or any other materials, contributing to the saving
of costs and the environmental protection (Hoa Phat’s Annual Report 2020).

6
III. Stakeholders
Internal
 Managers: They need information about the company's financial situation as it is
currently and as it is expected to be in the future. This is to enable them to manage the
business efficiently and to make effective decisions.
List of Board of Executives (from 26/04/2021):
 Mr. Nguyen Viet Thang: CEO
 Mrs. Nguyen Thi Thao Nguyen: Deputy CEO
 Mrs. Nguyen Thi Kim Oanh: CFO & Chief Accountant
 Owner’s: Hoa Phat’s Owners include Shareholders and Board of Director (BOD)
which has 8 members, Mr. Tran Dinh Long is the Vice Chairman of BOD.
 Employees: Currently, Hoa Phat Group has 11 member companies with 25,424
employees, operating nationwide and 01 office in Singapore.
External
 Suppliers: The world’s largest iron ore mine Vale in Brazil has been the regular
supplier for Hoa Phat. Moreover, Hoa Phat also has co-operation with big and oldest
producers such as Rio Tinto with output of 329.5 million tonnes per year, BHP with
227 million tonnes per year, FMG with 170 million tonnes per year and Royhill with
55 million tonnes per year.
 Society: Hoa Phat affect members of the society in a variety ways. They may make a
substantial contribution to a local economy by providing employment, good
implementation of social security and a series of charitable and general programs for
the community. Another important factor is the effect of Hoa Phat on the environment
 Government: The taxation authorities want to know about business profits in order to
assess the tax payable by the company, including sales taxes. In additon, government
and their agencies require information in order to provide a basis for national
statistics.
 Creditors: The providers of the company are banks and credit agencies.

7
 (Cre: Hoa Phat’s Annual Report 2020)
 Shareholers: They are the company's owners, want to assess how well the
management is performing. They want to know how profitable the company's
operations are and how much profit they can afford to withdraw from the business for
their own use.

(Cre: Hoa Phat’s Annual Report 2020)

 Customers: Due to a total capacity of over 8 million tons of steel, Hoa Phat Group is
the largest manufacturer of construction steel and steel pipes in Vietnam with market
share of 32.5% and 31.7% respectively. In addition, Hoa Phat's steel products are used
by big brands such as Sunhouse factory, Vinfast Hai Phong, Foxconn and Luxshare
which are Apple's suppliers.

8
IV. Analysing the company
1. Evolution of the financial reports
1.1. Evolution of the balance sheets

Cash account from 2016 to 2020

2,500
2,000
Unit: Billion VND

1,500
1,000
500
0
2016 2017 2018 2019 2020

Chart 4: The fluctuation of Hoa Phat’s Cash account from 2016 to 2020

Receivables account from 2016 to 2020

7,000
6,000
Unit: Billion VND

5,000
4,000
3,000
2,000
1,000
0
2016 2017 2018 2019 2020

Chart 5: The fluctuation of Hoa Phat’s Receivables account from 2016 to 2020

Inventories account from 2016 to 2020

30,000
25,000
Unit: Billion VND

20,000
15,000
10,000
5,000
0
2016 2017 2018 2019 2020

Chart 6: The fluctuation of Hoa Phat’s Inventories account from 2016 to 2020

9
 Current liabilities account from 2016 to 2020
60,000
50,000
Unit: Billion VND

40,000
30,000
20,000
10,000
0
2016 2017 2018 2019 2020

Chart 7: The fluctuation of Hoa Phat’s Current liabilities account from 2016 to 2020

Owner’s equity account from 2016 to 2020

70,000
60,000
Unit: Billion VND

50,000
40,000
30,000
20,000
10,000
0
2016 2017 2018 2019 2020

Chart 8: The fluctuation of Hoa Phat’s Owner’s equity account from 2016 to 2020
1.2. The Income statement

Net revenues sales and services account from 2016 to 2020

100,000
80,000
Unit: Billion VND

60,000
40,000
20,000
0
2016 2017 2018 2019 2020

Chart 9: The fluctuation of Hoa Phat’s Net revenues of sales and services account from
2016 to 2020

10
 Net income after Tax from 2016 to 2020
20,000
Unit: Billion VND

15,000

10,000

5,000

0
2016 2017 2018 2019 2020

Chart 10: The fluctuation of Hoa Phat’s Net Income after Tax account from 2016 to 2020
2. Analysing the ratios
a. Liabilities ratios
The current ratio
Table 1 – The current ratio from 2016 to 2020
2016 2017 2018 2019 2020
Current asset 18,183 33,068 25,309 30,437 56,747
Current liabilities 11,985 18,520 22,636 26,984 51,975
Ratio 1.52 1.79 1.12 1.13 1.09
Industry average 1.18 1.18 1.18 1.18 1.18

The current ratio from 2016 to 2020

2
1.5
1
0.5
0
2016 2017 2018 2019 2020
Current Ratio Industry average

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
The quick ratio
Table 2 – The quick ratio from 2016 to 2020
2016 2017 2018 2019 2020
Current asset 18,183 33,068 25,309 30,437 56,747
11
 Inventory 10,247 11,749 14,115 19,412 26,287
Current liabilities 11,985 18,520 22,636 26,984 51,975
Ratio 0.66 1.15 0.49 0.41 0.59
Industry average 0.53 0.53 0.53 0.53 0.53

The quick ratio from 2016 to 2020

1.5

0.5

0
2016 2017 2018 2019 2020
Quick Ratio Industry average 1.
Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
b. Activity ratios
Inventory Turnover
Table 3 – Inventory Turnover from 2016 to 2020
2016 2017 2018 2019 2020
Cost of goods sold 24,533 35,536 44,166 52,473 71,214
Inventory 10,247 11,749 14,115 19,412 26,287
Inventory Turnover 2.39 3.02 3.13 2.70 2.71
Industry average 3.65 3.65 3.65 3.65 3.65

Inventory Turnover from 2016 to 2020

4
3
2
1
0
2016 2017 2018 2019 2020
Inventory Turnover Industry average

1. Explaination:
2. The trend
12
3. Comparison
4. Evaluation
5. Recommendation
Average age of Inventory
Table 4 – Average age of Inventory from 2016 to 2020
2016 2017 2018 2019 2020
Inventory Turnover 2.39 3.02 3.13 2.70 2.71
Average age of Inventory 152.72 120.86 116.61 135.19 134.69
Industry average
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Average collection period
Table 5 – Average collection period
2016 2017 2018 2019 2020
Receivables 2,395 6,555 3,210 3,561 6,125
Net Revenue 33,283 46,162 55,836 63,658 90,119
Average collection period
26.26 51.83 20.98 20.42 24.81
(days)
Industry average
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Average payment period
Table 6 - Average payment period from 2016 to 2020
2016 2017 2018 2019 2020
Payables 3,734 4,226 8,707 7,507 10,916
Cost of goods sold 24,533 35,536 44,166 52,473 71,214
Average payment period
55.55 43.41 71.96 52.22 55.95
(days)
Industry average
1. Explaination:
2. The trend
3. Comparison
4. Evaluation

13
5. Recommendation
Total assets turnover
Table 7 – Total assets turnover from 2016 to 2020
2016 2017 2018 2019 2020
Net Revenue 33,283 46,162 55,836 63,658 90,119
Total Assets 33,227 53,020 78,223 101,776 131,511
Total assets turnover 1.00 0.87 0.71 0.63 0.69
Industry average 1.34 1.34 1.34 1.34 1.34

Total assets turnover from 2016 to 2020

1.5

0.5

0
2016 2017 2018 2019 2020
Total asset turnover Industry average

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Total equity turnover
Table 8 – Total equity turnover from 2016 to 2020
2016 2017 2018 2019 2020
Net Revenue 33,283 46,162 55,836 63,658 90,119
Equity 19,850 32,398 40,623 47,787 59,220
Total equity turnover 1.68 1.42 1.37 1.33 1.52
Industry average
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
c. Debt ratios
Debt raio
Table 9 – Debt ratio from 2016 to 2020
2016 2017 2018 2019 2020
14
 Total Debts 13,376 20,625 37,600 53,989 72,292
Total Assets 33,227 53,020 78.223 101,776 131,511
Debt Ratio (%) 40 39 48 53 55
Industry average (%)
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Debt on equity
Table 10 – Debt on equity ratio from 2016 to 2020
2016 2017 2018 2019 2020
Total Debts 13,376 20,625 37,600 53,989 72,292
Total Owner’s Equity 19,850 32,398 40,623 47,787 59,220
Debt on equity ratio (%) 67 64 93 113 122
Industry average (%)
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Interest coverage ratio
Table 11 – Interest coverage ratio from 2016 to 2020
2016 2017 2018 2019 2020
EBIT 7,982 9,768 10,611 10,034 17,549
Interest Amount 280 480 540 937 2,192
Interest coverage ratio 28.51 20.35 19.65 10.71 8.01
Industry average
1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
d. Profitability ratios
Gross profit margin
Table 12 – Gross profit margin from 2016 to 2020
2016 2017 2018 2019 2020
Gross Profit 8,751 10,626 11,671 11,185 18,904
Net Revenue 33,283 46,162 55,836 63,658 90,119
Gross profit margin (%) 26.29 23.53 20.90 17.50 20.98

15
 Industry average (%) 17.94 17.94 17.94 17.94 17.94

Gross profit margin from 2016 to 2020

30

20

10

0
2016 2017 2018 2019 2020
Gross profit margin (%) Industry average (%)

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Operating profit margin
Table 13 – Operating profit margin from 2016 to 2020
2016 2017 2018 2019 2020
EBIT 7,982 9,768 10,611 10,034 17,549
Net Revenue 33,283 46,162 55,836 63,658 90,119
Operating profit margin
23.98 21.16 19.00 15.76 19.47
(%)
Industry average (%) 11.48 11.48 11.48 11.48 11.48

Operating profit margin from 2016 to 2020

30

20

10

0
2016 2017 2018 2019 2020
Operating profit margin (%) Industry average (%)

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
16
5. Recommendation
Net profit margin
Table 14 – Net profit margin from 2016 to 2020
2016 2017 2018 2019 2020
Net Income 6,606 8,015 8,600 7,578 13,506
Net Revenue 33,283 46,162 55,836 63,658 90,119
Net profit margin (%) 19.85 17.36 15.40 11.90 14.99
Industry average (%) 9.69 9.69 9.69 9.69 9.69

Net profit margin from 2016 to 2020

25
20
15
10
5
0
2016 2017 2018 2019 2020
Net profit margin (%) Industry average (%)

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Earning per share
Table 15 – Earning per share from 2016 to 2020
2016 2017 2018 2019 2020
Net Income after tax 6,606 8,015 8,600 7,578 13,506
Number of common stocks 0.842 1,358 2,124 2,761 3,313
Earning per share 7,845.6 5,901.33 4,048.96 2,744.66 4,076.67
Industry average 3,311.13 3,311.13 3,311.13 3,311.13 3,311.13

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation
Return on total assets (ROA)
Table 16 – Return on total assets from 2016 to 2020
2016 2017 2018 2019 2020
17
 Net Income after tax 6,606 8,015 8,600 7,578 13,506
Total Assets 33,227 53,020 78,223 101,776 131,511
Return on total assets (%) 19.86 15.11 10.99 7.44 10.27
Industry average (%) 12.47 12.47 12.47 12.47 12.47

Return on total assets from 2016 to 2020

25
20
15
10
5
0
2016 2017 2018 2019 2020
Return on total assets Industry average

1. Explaination:
2. The trend
3. Comparison
4. Evaluation
5. Recommendation

Return on common equity (ROE)

Table 17 – Return on common equity from 2016 to 2020
2016 2017 2018 2019 2020
Net Income after tax 6,606 8,015 8,600 7,578 13,506
Total Equity 19,850 32,398 40,623 47,787 59,220
Return on common equity
33.28 24.74 21.17 15.86 22.8
(%)
Industry average (%) 23.72 23.72 23.72 23.72 23.72

Return on common equity from 2016 to 2020

40
30
20
10
0
2016 2017 2018 2019 2020
Return on common equity (%) Industry average (%)

e. Market ratios
18
Price/ Earnings ratio (P/E)
Table 18 – Price/ Earning ratio from 2016 to 2020
2016 2017 2018 2019 2020
Current asset
Current debt
Ratio
Industry average

f. Ratios’ table
2.2. Analysing the total of ratios
Basing on the ratios’ table
2.3. Recommendation

V. Conclusion
Reference

-----------------------------------------------------------------------------------------
Rules:
1. Tối đa 10 trang, Time new Roman, 12, 1.5 spaces. Citation và references theo tiêu
chuẩn APA.
2. Ví dụ: Citation và Referances theo tiêu chuẩn APA
a. Citation:
Đến cuối năm 2019, có đến 43 triệu người dân sử dụng tài khoản ngân hàng, tương
đương 63% người trưởng thành, sở hữu tài khoản ngân hàng tại Việt Nam. Số liệu này đã
tăng gấp đôi kể từ năm 2015, và ước tính sẽ tăng mạnh hơn nữa trong tương lai gần
[ CITATION Giá20 \l 1066 ]. Hơn nữa, mỗi ngày có đến hàng triệu giao dịch thông qua hệ
thống ngân hàng, với giá trị giao dịch quý II/2019 qua Internet Banking là 9.500 nghìn tỷ
đồng, qua Mobile Banking là 1.760 nghìn tỷ đồng (Tạp Chí Tài Chính, 2019).
b. Tài liệu tham khảo
Ngọc, G. (01 01, 2020). 63% người trưởng thành có tài khoản ngân hàng. Retrieved from
Forbes Việt Nam: https://forbesvietnam.com.vn/tai-chinh/63-nguoi-truong-thanh-co-
tai-khoan-ngan-hang-8802.html
Tạp Chí Tài Chính (2019). Đã có 40 triệu người có tài khoản ngân hàng, thanh toán di động
tăng 232,3%. Retrieved from http://tapchitaichinh.vn/ngan-hang/da-co-40-trieu-
nguoi-co-tai-khoan-ngan-hang-thanh-toan-di-dong-tang-2323-314132.html

19