HUNG VUONG CORPORATION

Transcription

1 HUNG VUONG CORPORATION OCTOBER

2 MAIN CONTENTS 1. BUSINESS OVERVIEW 2. BUSINESS ACTIVITIES 3. FISHERY INDUSTRY OVERVIEW 4. BUSINESS RESULTS 5. BUSINESS STRATEGY & PLAN 6. PEER COMPARISION 7. FINANCIAL STATEMENTS 2

3 1. BUSINESS OVERVIEW 3

4 1. BUSINESS OVERVIEW BUSINESS HIGHLIGHTS The largest fillet pangasius exporter in Vietnam with 12.56% market share and export value USD mn in the first 9 months of The only company that has a fully integrated value chain in the fishery sector from fish feed to farming, processing and cold storage, which significantly boosts gross profit margin. Exporting to over 27 countries world - wide including EU, Russia, Ukraine and starting to penetrate in US through AGF HVG s subsidiary since

5 1. BUSINESS OVERVIEW (cont d) KEY MILESTONES - Established as a limited liability company in Tien Giang with capacity 50 tons/day. -Set up An Lac the 3 rd plant (capacity: 50 tons/day) Developed 40 ha of fish farm. - Converted into Jsc., capitalized at VND 120 bn. - Built of 12,000 tons cold storage warehouse. -Bought 48% stake in Hung Vuong Mien Tay, a fish farm company. - Increased capital to VND 600 bn. - Bought 2 fish feed companies: Hung Vuong Tay Nam (51%) and Viet Thang (38% stake) through Hung Vuong Mien Tay Built the 2 nd p lant (capacity: 100 tons/day) - Set up 4 th, 5 th and 6 th (Chau A, & Vinh Long); total capacity of 160 tons/day. - Increased capital to VND 495 bn. - Expanded fish farm area to 150 ha. - Built 30,000 ton cold storage warehouse. - Set up 7 th & 8 th plants (Sa Dec, capactity: 100 tons/day and Chau Au, capacity: 500 tons/day) - Successful public offer of AGF share and increased stake up to 51.08%. - Increased capital to bn. 5

6 1. BUSINESS OVERVIEW (cont d) MAIN BUSINESS LINES Fish feed Fish farming Fish processing Cold storage service Fillet pangasius export Fish feed Fish farm Processing Cold storage Export 6

7 1. BUSINESS OVERVIEW (cont d) SHAREHOLDING STRUCTURE As of May 2010, total outstanding shares are 65,998,073. Shareholding structure as of May 2010 Local investors 34% Management, Internal controller & Chief accountant 38% Foreign investors 14% Employees 14% 7

8 1. BUSINESS OVERVIEW (cont d) MANAGEMENT PROFILE Mr Duong Ngoc Minh Chairman cum General Director Co-founder of Hung Vuong Corporation, Mr Minh currently holds 31.86% stake in the company. Before setting up Hung Vuong, he served as the Director in several companies operating in fish faming and fish processing businesses. He has over 20 years of working experience in the industry and his expertise is highly recognized among peers. At the moment, Mr Minh is the Head of the Coordinating Committee for Tra fish (pangasius) export to Russia. 8

9 1. BUSINESS OVERVIEW (cont d) Business partners: Customers: PARTNERS Banks: Suppliers: Financial partners: 9

10 1. BUSINESS OVERVIEW (cont d) CORPORATE STRUCTURE Hung Vuong Corporation 100% Cold storage 51.08% 90% 70% 70% 48% 48% An Giang Vinh Long Chau A Sa Đec Chau Au HV Mien Tay An Lạc RE 51% 38% Fish processing company Fish farm company HV Tay Nam Việt Thang Fish feed company Internal business flows Real estate company Fish feed Farm Processing Cold storage Export 10

11 1. BUSINESS OVERVIEW (cont d) OPERATING SITES The Mekong Delta Region - 2 fish feed companies in Dong Thap province. - Over 250 ha of fish farm (owned by HV Mien Tay) in Ben Tre, Tien Giang and Vinh Long province. - 6 fish processing companies (9 plants) in Tien Giang, Vinh Long, Dong Thap and An Giang province. - 2 cold storage warehouses (42,000 tons) in HCMC. 11

12 2. BUSINESS ACTIVITIES 12

13 2. BUSINESS ACTIVITIES FISH FEED Hung Vuong s 2 fish feed affiliates Hung Vuong Tay Nam ( HV Tay Nam ) and Viet Thang together hold 25% of the Mekong Delta s fish feed market share. Total output is 420,000 tons p.a. Viet Thang is the largest fish feed company in the Mekong Delta. HV Tay Nam Viet Thang HVG s effective stake 24.5% 18.2% Location Dong Thap Dong Thap Number of plants 1 3 Current capacity (tons/day) 300 1,000 Utilization 90% 90% % sales contribution to HVG 80% 25% Planned capacity in 2010 (ton/day) 700 1,200 Fish feed Fish farm Processing Cold storage Export 13

14 2. BUSINESS ACTIVITIES (cont d) FISH FARM 1 fish farming company Hung Vuong Mien Tay ( HV Mien Tay ) HV Mien Tay HVG s effective stake 48% Current farm acreage Location 150 ha Ben Tre, Vinh Long, Tien Giang province, near the Group s processign plants Annual output Planned farm acreage in ,000 ton raw fish, meeting 50% the Group s demand 250 ha Fish feed Fish farm Processing Cold storage Export 14

15 2. BUSINESS ACTIVITIES (cont d) PROCESSING 9 processing plants are located near the fish farms after stopping An Lac factory in the end of 2009 and consolidating AGF s 2 plants since Q2/2010. Hung Vuong HV Vinh Long HV Chau A Fish feed Fish farm Processing HV Sa Dec HV Chau Au Cold storage An Giang HVG s effective stake 100% 90% 90% 70% 70% 51.08% Location Tien Giang Vinh Long Tien Giang Dong Thap Tien Giang An Giang Export Total No. of plants Designed capacity (tons/day) ,910 Avg capacity (tons/day) ,300 Annual capacity (tons/year) 60,000 45,000 30,000 30, , , ,000 Utilization 67% 75% 67% 63% 80% 90% 74% 15

16 2. BUSINESS ACTIVITIES (cont d) COLD STORAGE 2 cold storage warehouses with total capacity of 42,000 tons. Warehouse 2 (30,000 tons) is considered as the largest one in Vietnam. Warehouse 1 Warehouse 2 Warehouse 3 Total HVG s effective stake 100% 100% 100% Location Tp.HCM Tp.HCM Tp.HCM Year of commencement / Current capacity (tons) 12,000 30,000-42,000 Utilization 100% 90% n/a 93% % sales contribution to HVG 100% 0% n/a 25% Planned capactity in 2011 (tons) 12,000 30,000 60,000 (*) 102,000 (*) is considered as the largest cold storage warehouse in the Southeast Asia. Fish feed Fish farm Processing Cold storage Export 16

17 2. BUSINESS ACTIVITIES (cont d) EXPORT HVG is the largest pangasius exporter in Vietnam with export value of USD mn, equivalent to export volume of 63,434 tons in the first 9 months of No. Company Volume (tons) Value (USD mn) (%) 1 Hung Vuong Corp (included Hung Vuong Vinh Long Ltd. Co & Agifish) 36, , ,581 = 63, = % 2 Vinh Hoan Corp. 30, % 3 Navi Co (included Indian Ocean Ltd.Co.) 25, ,734 = 28, = % 4 Anvifish Co. 18, % 5 CF fish Corp. 18, % 6 Others 315, % Tổng cộng 474,758 1, % Fish feed Fish farm Processing Cold storage Export 17

18 USD mn. 2. BUSINESS ACTIVITIES (cont d) EXPORT (cont d) Exporting to over 27 countries. Traditional market is the EU. In 2010, HVG penetrated into new market such as US since it s Trade Committee has litmited several barriers and through AGF it s subsidiary HVG s export value (2004 9Ms/2010) Ms/2010 Mexico 10% Russia 5% Australia & others 15% The Middle East 5% HVG s export market 2009 Ukraine 8% US 7% EU 50% Fish feed Fish farm Processing Cold storage Export 18

19 2. BUSINESS ACTIVITIES (cont d) EXPORT (cont d) 2009 sales breakdown: Eastern Europe: 13% The E.U: 50% Middle East, Asia, 30% Mexico, Canada, Australia, US Fish feed Fish farm Processing Cold storage Export 19

20 2. BUSINESS ACTIVITIES (cont d) REAL ESTATE 1 real estate company An Lac Real Estate Jsc. An Lac Real Estate HVG s effective stake 48% Land bank 2 plots totalling 8,700 sqm located in HCMC s China Town. Land status - Free & clear, ready for development Development plan HVG s strategy 1 st plot (5,640 sqm) to be developed into a commercial building; 2 nd plot (3,000 sqm) to be developed into an apartment building. - Contribute the land to JV(s) with experienced developers and let the partners develop the properties. 20

21 3. FISHERY INDUSTRY OVERVIEW 21

22 3. INDUSTRY OVERVIEW Fishery is Vietnam s key industry with annual growth rate above 17.13% ( ), but at negative one (-5.70%) in In 9 months of 2010, the industry reaches export value of USD bn and volume of thousands tons. Shrimps and pangasius are still the main fishery products contributing to export value. - Difficulties:: There is more techical barriers from the importer and a lack of input materials, hence the enterpises which have processed shrimps and pangasius, have mostly maintained the operating capacity of 30 60%. Increased expenses such as: loans interest, electricity, water, labor salary, transportation cost, packing cost push up cost of goods sold by about 10 15% more than that of 2009 Vietnam s fishery export market in 9 months of 2010 Vietnam s major fishery products in 9 months of 2010 Others 19.9% Japan 18.30% Tuna 6.3% Other fish 12.2% Mollusk 9.7% Other crustacean 2.1% Asean 4.4% China 4.7% Autralia 3% Korea 7.1% EU 23.6% US 19% Pangasius 29% Frozen shrimp 40.7% 22

23 1,000 tons 3. INDUSTRY OVERVIEW (cont d) USD mn Vietnam's fishery export (E) Volume Value 23

24 1,000 tons USD mn. 3. INDUSTRY OVERVIEW (cont d) Vietnam is the largest pangasius producer in the world thanks to its fish farm advantage (near the Mekong river, good weather condition) and low labor cost which altogether cause a competitive selling price suitable for majority import destinations. Vietnam s pangasius export market in 9 months of Vietnam s pangasius export (E) Others 33.5% EU 36.9% Saudi Arabia 2.9% US 11.1% Russia 4.3% Asean 5.6% Mexico 5.7% Volume Value 24

25 4. BUSINESS RESULTS 25

26 4. BUSINESS RESULTS Unit 2009 (*) 9Ms/2010 (**) Export volume tons - 63,434 Export value USD mn Total assets VND bn Equity VND bn Net sales VND bn Net profits VND bn EPS VND (*): Before the public offer to purchase AGF s additional stake. (**): After the public offer to purchase AGF s additional stake. Source: HVG s 2009 Audited Consolidated FS, 9Ms/2010 Unaudited Consolidated FS 26

27 4. BUSINESS RESULTS (cont d) FINANCIAL RATIOS Assets structure MS/ Ms/2010 Efficiency ratios Short term assets/total assets Long term assets/total assets 75.83% 70.67% Inventory turnover (rounds) % 29.33% Receivable turnover (rounds) Equity structure Debt/Total equity 53.17% 54.59% Net sales/ Total assets (rounds) Profitability ratios Equity/Total equity 45.17% 37.69% Profit before tax/net sales 10.82% 8.26% Liquidity ratios Net profit margin 11.76% 7.51% Current ratio (times) Profit before tax/total assets 8.81% 5.02% Quick ratio (times) PAT/Total assets 9.55% 4.57% PAT/Equity Source: HVG 2009 Audited Consolidated FS, 9Ms/2010 Unaudited Consolidated FS 20.65% 12.12% 27

28 4. BUSINESS RESULTS (cont d) - Revenue CAGR: 63.77% - Net profit CAGR: 76.84% 28

29 5. BUSINESS STRATEGY & BUSINESS PLAN 29

30 5. BUSINESS STRATEGY & BUSINESS PLAN BUSINESS STRATEGY ( ) Continue to penetrate the traditional markets i.e. Russia, Ukr aine. Increase stake in its some affilitates to subsidiaries. Keep consolidatio n of AGF s trading market share and market distribution. And make benefits for their business and customers. Restructure the Group. Continue to invest in a 60,000 - ton cold storage warehouse at Hiep Phuoc, Nha Be, HCMC. Form JV (s) with experience d developers in real estate. 30

31 5. BUSINESS STRATEGY & BUSINESS PLAN (cont d) BUSINESS PLAN Unit: VND bn Chartered capital Net sales 5,000 6,500 7,500 - Processing & Cold storage 4,000 5,000 5,500 - Other activities 1,000 1,500 2,000 Net profits Net margin 7.8% 7.69% 8.00% - EPS (VND) 5,909 7,575 8,264 Dividend per share (VND) 3,000 3,000 3,000 Source: General Director 31

32 6. PEER COMPARISION 32

33 6. PEER COMPARISION SWOT ANALYSIS Strengths Vertically integrated value chain; Economies of scale; Ability to control cost; Ability to compete and penetrate new markets; Experienced and dynamic management. Weeknesses Lack of management capacity for such a fast growing business and complex holding structure; Relative unfamilarity with the import of fish feed marterial, the Company needs to find prestigious partners. Opportunities Keep increasing in pangasius fillet demand due to the need to substitute depleting ocean fish; Continue to reap benefits of vertical integration. Threats Fluctuation of input costs; Lack of electricity; Quality issue and technical barriers set by various export markets; Environmental issues from fish farm and fish processing plants. 33

34 6. PEER COMPARISION (cont d) PEER S FINANANCIAL RATIOS VHC ANV HVG Ms/ Ms/ Ms/2010 Export volume (tons) 38,873 30,979 46,073 28,246-17,549 Export value (USD mn) Gross margin 16.32% n/a (2.2%) 13.29% 16.95% 14.57% Total cost/net sales 92.67% n/a 114.9% 101.1% 93.32% 99.56% Net margin 7.5% n/a (6.86%) 5.41% 11.76% 7.51% ROA 13.71% n/a (5.8%) 51.74% 9.55% 4.57% ROE 31.93% n/a (8.69%) 71.10% 20.65% 12.12% Debt/Total Equity 54.75% n/a 33.04% 23.1% 53.17% 54.59% Receivable days n/a Payable days n/a Inventory days n/a EPS (VND) 6,427 n/a (1,947) - 6,769 3,301 BV (VND) 19,992 n/a 22,407 22,440 29,280 28, Source: Audited Consolidated FS, HOSE, SSI Research 34

35 6. PEER COMPARISION (cont d) Several key financial ratios 2009 HVG ANV VHC Effective operation 2009 HVG ANV VHC 53.17% D/E 33.04% 54.75% Inventory days % ROA -5.80% 13.71% Payable days 24.4 Total costs/net sales 93.32% 92.67% % % Receivable days 172 Gross margin -2.20% 16.32%

36 7. FINANCIAL STATEMENTS 36

37 7. FINANCIAL STATEMENTS BALANCE SHEET Unit: VND bn ASSETS Ms/2010 RESOURCES Ms/2010 Current assets 2,874 3,559 Liabilities 2,015 2,748 Cash and cash equivalent Short-term debts 1,545 1,994 Short-term investments - 53 Trade payables Trade receivables 1,953 1,969 Advance from customers Inventories 653 1,203 Tax payable to State Treasury Other current asset Other current liabilities Long term assets 916 1,477 Owner s equity 1,712 1,898 Fixed assets 591 1,116 Contributed capital Real estate investment - - Capital surplus Long term financial investment Foreign exchange differences 29 - Other long term assets Retained profits Other funds Minorities contributed TOTAL ASSETS 3,790 5,036 TOTAL RESOURCES 3,790 5,036 37

38 7. FINANCIAL STATEMENTS (cont d) INCOME STATEMENT Unit: VND bn Ms/2010 Net sales 3,087 3,061 Cost of goods sold 2,567 2,614 Gross profit Financial income Financial expense Selling expense G&A expense Net operating profit Other income 9 5 Other expense 2 5 Other profit Profit before tax Corporate income tax Profit after tax Minorities Interest 1 23 Profit belong to parent s shareholder EPS (VND) 4,926 3,301 38

39 7. FINANCIAL STATEMENTS (cont d) CASH FLOW STATEMENTS Unit: VND bn Ms/ Ms/2010 CASH FLOWS FROM OPERATING ACTIVITIES CASH FLOWS FROM INVESTING ACTIVITIES Profit before tax Purchases of FA and other long term assets Adjustments for: Proceeds from disposals of FA/long - term assets Depreciation and amortisation Recovery of loans, sale of debt instruments of other entities (191) (203) Provisions (250) 3 Investments in other entities (60) (2) Profit from investing activities 146 (6) Proceeds from disinvestment in other entities Interest expense Dividends and interest received Operating profit before changes in working capital Net cashflows from investing activities Change in receivables (540) 8 CASH FLOWS FROM FINANCING ACTIVITIES Change in inventory - (549) Proceeds from issue of shares and capital contribution (140) (157) 6-39

40 7. FINANCIAL STATEMENTS (cont d) CASH FLOW STATEMENTS (cont d) Unit: VND bn Ms/ Ms/2010 Change in payables Payments to settle debts (4,403) 7,257 Change in prepayments (17) (4) Proceeds from short term and long term borrowings Interest paid (79) (143) Dividends paid for parent s shareholder and MI Corporate income tax paid (2) (19) Net cash flow from financing activities Other receipts from operating activities Other payments on operating activities Net cashflows from operating activities 5 8 Net cash flows during the year (38) (250) Cash and cash equivalents at beginning of year (401) (189) Impact of exchange rate fluctuations Cash and cash equivalents at end of year Source: Audited Consolidated FS 2009, Unaudited Consolidated FS 9Ms/2010 5,083 7,699 (115) (1) (2)

41 THANK YOU VERY MUCH! 41