Professional Documents
Culture Documents
Nguyễn Ánh Dương
Nguyễn Ánh Dương
Nguyễn Ánh Dương
Hanoi, 08/06/2021
June 8, 2020
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ADDRESS: No. 194 - Kieu Ha Street - Dong Hai Ward 2 - Hai An District - Hai Phong
City
EMAIL: hhppaper@gmail.com
WEBSITE: http://hhppaper.com/
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TABLE OF CONTENT
INTRODUCTION............................................................................................................4
RISK ANALYSIS............................................................................................................. 6
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INTRODUCTION
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VISION:
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RISK ANALYSIS
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The efficiency of using total assets of HHP changed slightly over 4 years (1.61 in
2016 to 1.06 in 2020). In general, quite low compared to the industry average and
no progress over the years
Receiable Turnover
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Days of Outstanding
The Days of Sales outstanding of HHP is lower than the industry. This is the
positive trend, it shows that the day HHP needs more days to receive money from
customers. This shows that company can not receive money rapidly from their sale
activity effectively and its statistics tend to increase from 2016 to 2020 ( from 42
days to 60 days)
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Inventory Turnover
HHP's inventory turnover rate is slower than other companies in the market. Those
are dangerous numbers and it is decreasing every year. In 2020, this company only
reached 7.07 inventory turnover, which shows that the company has a lot of
inventory that cannot be sold quickly.
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Day of inventory represents the inventory liquidity. If the Days of inventory is high, it
indicates that the company is performing not good at all because the inventory takes short
period to be cleared. In the below chart, it is obvious that HHP deal with dangerous
number while its Days of Inventory on hand is one of the high rate company of the
market.
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Payable Turnover
HHP's payables turnover is average in the industry and slightly below the market
average. This number fluctuates quite strongly (15.82 - .7.78 - 9.75 - 12.66 - 9.93
for the years from 2016-2020, respectively) It shows that HHP does not take long
to pay owed to suppliers when they purchase goods and services. But they should
keep their stats lower and not make it higher next year.
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HHP has the lower Number of Days of Payable than the market. HHP pay
for their supplier faster than average of the market
HHP's fixed asset turnover is lower than the market average. The number has
not changed much in 4 years, tends to decrease through 2019 and increase slightly
in 2020. It shows that a company is not using its assets efficiently or its pulling
potential. to generate revenue or mean that it was unhealthy business at the time.
Equity Turnover
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2.1.3. Current economic scenarios that may affect the sustainability of the
company in the incoming period?
In 2020, the company's cash flow to purchase fixed assets and other long-term
assets is 59.6 billion dong, of which machinery and equipment purchases account
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for 54.96 billion dong. The value of new purchases in the year is equivalent to
70% of the remaining value of machinery and equipment until the end of 2020.
From 2017 to 2019, HHP's cash flow hardly had a surplus when it had to
continuously increase working capital according to the value of receivables and
surplus. In order to relieve capital pressure, this business continuously conducted
capital raising offerings in 2017 (VND 62.7 billion) and 2019 (VND 65 billion).
By the end of 2020, the total debt and finance lease of HHP was 190.3 billion
VND, accounting for 38.1% of capital and up 42.9% compared to the beginning of
the year. The debt-to-equity ratio stands at 82.7%. Meanwhile, cash reserves are
quite thin when the value of deposits with a term of more than 3 months is only 1
billion dong.
Large loan balance causes HHP's interest expense in 2020 to increase by 24.1%
compared to 2019 even though the interest rate has decreased. Interest expense
accounted for about 1/3 of net profit from business activities. Interest payment
cash flow is equivalent to more than 55% of operating cash flow. This shows that
the burden of interest expense is quite large that HHP is bearing, corresponding to
a large risk if the business situation is more difficult.
the production and business of paper and packaging of HHP is not very
positive. However, HHP currently owns 30% of capital (30 billion dong) in
Hoang Ha Investment Group Joint Stock Company. This company is currently
the Investor of a commercial housing construction investment project in Hai
Phong with an area of 2.72 hectares, which is one of the key projects of Hai
Phong in 2020-2021. It is expected that the project will be open for sale and
generate revenue from the fourth quarter of 2021.
It is expected that HHP's profit will come from the fact that in 2021, HHP will
have the profit to be shared from the associate for the real estate segment.
2.2.1. Identify the volatility of the performance and stock price of company
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Looking at the statistics table, we can see that the return on assets of HHP is not
high, but it is very stable, fluctuating around 1% from 2016-2020. Due to the
impact of the Covid 19 epidemic, which had a general effect on the manufacturing
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industries, HHP was reduced a bit but not significantly. However, HHP needs
better business strategies to increase the company's return on assets. Looking at
stock prices from May 10, 2021 to June 4, 2020, we see a major downtrend in the
1-4% range. Dramatically increased to the ceiling in one session, up 6.76%.
According to statistics, HHP ranked 22/25, among the top companies with low risk.
Volatility is 0.64%, which is nearly 0.4% higher than the GTA company, and nearly
1.5% lower than the industry as a whole. It is a positive sign of the company during this
period, showing that the company has not been affected too much by the covid 19
epidemic. According to the analysis, in the short term, HHP tends to grow, but in the long
term, it tends to go down. That can be seen in part in recent stock prices.
I have collected data about 6 companies of Construction and Real Estate industry.
Comparing HHP of the manufacturing industry, we see that the Construction and Real
Estate industry fluctuates quite strongly. Specifically, PV2 company, PVL is up to 10%
while HHP has only 0.6%. That can see the current trend, the Construction and Real
Estate industry is greatly affected by the covid 19 epidemic, even the profit tends to be
negative.
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Draw the return-risk relationship and discuss this relationship of possible investments to
any two stocks
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Plans, policies, and procedures for risk management should be made available as
widely as possible; shareholders, stakeholders, investors, and other relevant
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interested parties should all have clear, direct access as part of documented
information or regular reports.
ERM systems will typically focus more on control of internal processes, using
principles of continuous improvement, internal audits, compliance with standards
– seeking to minimize controlled risk as much as possible, as well as setting up
preventative measures for risks and hazards outside the scope of control of
business processes.
References:
https://finance.vietstock.vn/HHP-ctcp-giay-hoang-ha-hai-phong.htm
http://hhppaper.com/
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