Foreign Trade University Faculty of Banking and Finance

KINHDO Financal Report

Introdution to Finance Assignment

Lecturer: MSc Nguyen Thu Thuy

1. Nguyen Dieu Linh 2. Nguyen Minh Trang 3. Nguyen Thi Huyen Trang 4. Vu Thi Ngoc Tram 5. Nguyen Hai Yen

ID : 1001020080 ID : 1001060202 ID : 1001030495 ID : 1001030359 ID : 1001030414

Class: TCHE302(2-1112).1_LT

TABLE OF CONTENT Page

A. Letter of Transmittal B. Introduction C. External environment analysis I. About Vietnamese food and drinks market II. SWOT analysis for Vietnam market III. Products IV. Firms market and segmentation V. Identify firms competitors D. Financial Analysis I. Profitability II. Efficiency III. Liquidity and ability to pay off debt E. Future plans I. SWOT analysis II. Future plans F. Conclusion G. Reference H. Appendix

3 4 5 5 5 7 8 10 11 12 15 16 18 18 20 25 26 27

A. Letter of Transmittal
May 15, 2012

North KINHDO Food Joint Stock Company 6/134 Highway 13, Hiep Binh Phuoc, Thu Duc District, HCMC Dear Board of Directors, We are here submitting our financial strategic report with analysis of Vietnamese food market, KINHDO Food position in the market, financial analysis for KINHDO and proposed plans which we find the most profitable for the company. The main purpose of this report is to help you understand more clearly about the present condition of KINHDO and have a right direction in the future. Our proposals are enclosed with capital budget spreadsheets and plan explanations. Please contact us if you have any questions relating to this report. We hope that this report will merit your approval. Respectfully yours,

B. Introduction
Dear Boards of Directors, 4

The year 2011 is still a difficult step in the development as well as the recovery of Vietnam economy, and KINHDO is not an exception. CPI has been continuously rising, which leads to the high prices of raw material. Although demand is contracted, the food and drinks market is still attractive. KINHDO is one of the largest national leading food companies as well as South East Asia with ups and downs since the beginning to the present. Its success is a great proud for all employees in the company as well as the food industry of our country. However, in recent years, all countries are affected negatively by the great global economic recession, which led to a decline in revenue in almost all industries. KINHDO used to be a familiar, favorite and trustworthy Vietnamese brand. Though it can suffer and overcome the difficult situation, it still bears the loss. Therefore, we conduct this project to give suggestion to protect KINHDOs brand and reputation with customers, overcome the consequences of economic recession and improve brand value to compete with foreign competitors in the integrated market.

C. External environment analysis

I. About Vietnamese food and drinks market

Vietnam is a developing nation with a population of over 88 million. The countrys food and beverage industry is growing every day. - Population and demographics: Vietnam has a young growing population. Around one third of the population is under 15. Because young people are more receptive of convenient foods, the demand for those products is increasing. - Trade: After joining the World Trade Organization (WTO) in 2007, Vietnam has been importing more products overseas. As a result, Vietnamese consumers have a trend towards a more varied diet with a wider range of products. - Health consciousness: Healthy packaged products and modern retail channels (which are seen as hygienic) are expected to grow. Vietnamese people also increase demand for diet foods.

II. SWOT analysis for Vietnam market

1. Strengths - The food-processing sector accounts for a large proportion of industrial output and GDP attracting significant domestic investment. - Vietnamese consumers, particularly the young and affluent, are interested in brands and renowned Western products, which are supported by the investment in marketing and promotion successfully. - The wealthy urban central of Hanoi and Ho Chi Minh City now provides highly receptive of consumers. - Large and diverse domestic agricultural output aids the stability of ingredient supplies for local producers a vital strength during this period of global volatility. 2. Weaknesses - There is a wide income difference between urban and rural areas. As we know that, local consumption patterns vary significantly according to income. - The food-processing industry remains largely fragmented except for a few key sectors, such as dairy and confectionery. - The agricultural sector is still too slow to adapt to new technology therefore, it does not have globally competitive ability in the long term, although the government is working hard to resolve this. - Vietnam's infrastructure is still weak. Roads, railways and ports are inadequate to cope with the country's economic growth and corporate with the outside world. 3. Opportunities - Become the official member of WTO, in January 2007, Vietnam has gained much benefit for exporters because of the gradual removal of market barriers and trade restrictions - Rising income levels and changing lifestyles, particularly in urban areas, are increasing consumer demand for snacks, convenience and luxury food items. 7

- Vietnams large domestic market, growing export opportunities and low labor costs offer many investment opportunities. - A growing tourism industry offer Vietnam a huge number of consumers from outside. They are people, who are familiar with packaged and convenient foods. 4. Threats - Becoming the member of WTO, Vietnams businesses face up with harsh competition, which may endanger the small companies. - With a devaluation of VND, which is likely to add to inflationary pressures, the inflation tends to back to high number. - Rising agricultural commodity costs will remain a risk for the profitability of processed-food manufacturers; farmers themselves also claim this as a threat.

III. Products
KINHDO Corporation is a great business food group of Viet Nam. Along with the slogan: Flavor your life, KINHDO Food has created Vietnamese flavors through healthy, nutritious and convenient foods for all ages from kids to the elders. There are 10 major branches of products creating the success of our corporation: - Buns: Scotti and Aloha. They are made from milk, egg, wheat flour with different tastes, which is suitable for the early morning breakfast. - Cake: Solite and Sophie. They are always excellent choices for you to take care of your beloved people by supplying energy for a day with effective work and study. - Cracker: AFC and Cozy. They are different from other kinds of products because of the nutrients including calcium, DHA, vitamins. Cracker is a wonderful way for you to enjoy the taste of the cakes but still keep healthy and charming. The slogan of AFC is Daily 8

delicious cake; long term health! and slogan of Cozy is The sweet flavor for more pleasant day! - Cookies: Good choice, Korento and IDO. With the multiform of tastes and models, Cookies are suitable for the whole family to enjoy and share the joy. - Snacks: Slide, Sachi and Jevi attract young customers by the bright style and fresh flavour. - Sweets: Kokochoco, crundy and milkcandy. Enjoying candies, you will feel the sweet and pleasant features in every moment. Kokochoco is famous for slogan : Caring for your beloved people! - Wafers: Wafers, minty and finery. Tube wafer cakes are produced automatically by advanced technology to make delicious, crispy, sponge cakes with funny shape. It is good to enjoy and share. Wafers slogan is : Be crispy, sponge, sweet with delicious ice cream! - Moon cakes: It is a gift shining love and friendship in the occasion of Mid-Autumn Festival season of shining and colouring festivals. The slogan is Mid Autumn Festival, Festival of lovers - Ice-Cream: Merino and Celano are 2 kinds of KINHDO Products in market. Remaining with the young, active and delicate color, King Do ice- cream always brings the satisfaction for every customers. - Yogurt: Wel-yo is available with three variants such as Vanilla, Strawberry and Chocolate flavours which are not only delicious, attractive and suitable but also guarantee to provide your children with a real good source of nutrients, facilitating the future outstanding development.

IV. Firms market and segmentation

1. Domestic market:

The year 2010 was an important year of KINHDO. We made a restructuring to build a professional distribution system, which is capable of approaching broadly and efficiently. This improvement enables KINHDO to promote the growth, moving to a higher position in this industry. Up to present, KINHDOs distribution system has proved to be convincing in its transformation, incorporating with 200 best distributors, serving 120,000 retail outlets, 30,000 ice-cream and dairy products retailers, 30 KINHDO Bakery stores, etc. KINHDO is ranked among top companies with the best distribution system in Vietnam. 2. Foreign market: Development strategy of KINHDO in 2010 is to consolidate, expand main markets, and develop potential markets. For example, KINHDO is working on a plan to penetrate Myanmar, a potential market of more than 50 million people (and where KINHDO showcased products at a trade fair in November, 2009) as well as China, a market where local consumers share their buying habits with Vietnamese. Both have tariff incentives in addition to their proximity to Vietnam. Currently, KINHDO is setting foot in the Middle East and is seeking to enter the United Arab Emirates. Japan is a traditional market that KINHDO will also focus on. In 2009, KINHDO was invited to join a trade fair in Japan and immediately accredited for product quality and factory safety. 3. Subsidiary companies: KINHDO is diversified into several fields, listed along with significant subsidiary companies.Foods, primarily confections and soft drinks, are manufactured and distributed by the following: - KINHDO Corporation - Binh Duong KINHDO Corporation - North KINHDO Food Joint Stock Company - Ki Do Corporation 10

- KINHDO Saigon - Vinabico Corporation

V. Identify firms competitors

According to the statistics of IBA (GHM), confectionery production in Vietnam in 2010 reached about 476,000 tons, by 2012 reaches about 706,000 tons, and the total value of retail confectionery market in Vietnam in 2010 is about 674 millions USD, and 2012 is 1.446 millions. Growth rate of retail sales of confectionery in the Vietnam market in the period 2010-2012 is estimated by 114.71% / year, while the number in other countries in regions are China - 49.09%, Philippines - 52.35%, Indonesia - 64.02%, Thailand - 37.3% and Malaysia - 17.13%. With this rapid development, there are many competitors of KINHDO Corporation in the food market - Regarding to the Cookies and Cake market, there are Lotte, Orion, Danisa, and Tiger which are international branches. Meanwhile KINHDO also have many domestic rivals such as: Bibica, Haihaco, Trng An .. - In term of Ice-Cream, we face some firms like Trng Tin, Thy T which are traditional and responsible domestic branch names in Viet Nam - In term of yogurt: we compete against: Vinamilk, IDP

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D. Financial Analysis
To measure of overall performance of KINHDO, we use ratios including Net Profit Margin, Return On Assets (ROA), Return On Equity (ROE), and Earnings Per Share (EPS), Inventory, Quick Ratio, Debt ratio Here are some financial ratios calculated from the Income Statements and Balance Sheet of the firm in the last three years 2009 Profitability ROA ROE Operating profit margin Gross profit margin Net profit margin EPS (VND) Efficiency Assets Turnover Inventory turnover Average collection period Liquidity Current ratio Quick ratio Leverage Times interest earned ratio 12.31% 21.63% 19.73% 33.05% 34.19% 6,041 0.36005 1 5.95099 0.53956 3 1.53739 2 1.43787 7 13.0789 6 2010 11.54% 15.54% 31.94% 35.45% 30.04% 5,105 0.38427 4 4.18309 5 0.52665 3 2.22792 4 1.81231 9 15.9285 2 2011 4.95% 7.54% 8.11% 39.40% 6.77% 2,289

0.731034 6.184214 0.170692

1.434509 1.211342

2.97903 12

Debt ratio

0.41610 3

0.23379 9

0.337293

I. Profitability
1. Net profit margin * Theoretical Foundation: This ratio measures the percentages of each sale dollar remaining after all expenses including interest and taxes, have been conducted. Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit. * Formula: After calculating Net profit margin ratio of KINHDO, we have the following table

Net profit margin

2009 34.19%

2010 30.04%

2011 6.77%

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As we can see from the table, the net profit margin followed a downward trend in last 3 years. Starting at 34.19 % in 2009, it decreased to 30.04% in 2010 then bottomed out the year 2011 at 6.77%. There is a large gap between 2010 and 2011. Even though the revenue increased from 1,942,808 to 4,278,052 million VND, the profit margin fell significantly according to the lack of efficient expense control. 2. Return on Asset and Equity * Theoretical Foundation: - Return on Asset ratio measures the overall effectiveness of management in generating profit with its available assets. The assets of the company are comprised of both debt and equity. Both of these types of financing are used to fund the operations of the company. Therefore, the higher the ROA number, the better, because the company is earning more money on less investment. - Return on Equity measures the return earned on the ordinary shareholders equity. In other words, it evaluates corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. * Formula:

ROA ROE

2009 12.31% 21.63%

2010 11.54% 15.54%

2011 4.95% 7.54%

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The table above showed that both ROA and ROE fell dramatically during the last 3 years. Beginning in 2009 at 10%, ROA ended the year 2011 at 5%. Similarly, ROE declined from more than 21% - a very high number to 7.54%. Those figures show us that the management in generating profits from asset and investors equity became less effective. However, since ROE of the company in three years was higher than ROA, we come to a conclusion that company had used the stockholders equity effectively. 3. Gross profit margin Operating profit margin Earnings per share: * Theoretical Foundation: - Gross profit margin is an indication of a firm's ability to turn a dollar of sales into profit after the cost of goods sold has been accounted for.

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- Operating margin gives analysts an idea of how much a company makes (before interest and taxes) on each dollar of sales.

Gross profit margin Net profit margin

33.05% 35.45% 39.40% 34.19% 30.04% 6.77%

The gross profit margin is quite better with a slight increase from 33.05% to 39.40%. However, the operating profit margin went up from 2009 to 2010 then bottomed out in 2011 at 6.77%. This means that the sale is pretty good, not much growth but the cost control became so bad that lead to the large decrease in operating profit margin * Earnings per share (EPS) EPS (VND) 6,041 5,105 2,289 The EPS is quite good. However, because of worse operating, the EPS also followed a downward trend.

II. Efficiency

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* Asset turnover measures a firm's efficiency at using its assets in generating sales or revenue - the higher the number the better. It also indicates pricing strategy: companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover. * Inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. * Formula: Total asset turnover = Inventory Turnover = Assets Turnover Inventory turnover Cost of Goods Sold Average Inventory 0.360051 5.95099 0.384274 4.183095 0.731034 6.184214

The graph tells us that the Asset turnover ratio grew slightly. However this ratio is still very low. This means that KINHDO was not really effectively in using it asset in generating revenue.

Through three years, the inventory turnover ratio indicates that the effectiveness in inventory management of KINHDO is pretty well, it kept a pretty stable level apart from a slight decrease from 2009 to 2010, after that it got back to the higher level of 4.59 also meaning that the efficient use of property performance. The 17

number of goods sold would make the total revenue of the company increase considerably if they are sold out with the imaginary speed.

III. Liquidity and ability to pay off debt

Current ratio Quick ratio Times interest earned ratio Debt ratio 2009 1.537392 1.437877 13.07896 0.416103 2010 2.227924 1.812319 15.92852 0.233799 2011 1.434509 1.211342 2.97903 0.337293

First of all, the Debt Ratio decreased fluctuated slightly over the period of 2009 2011. The thing here is the debt ratio is very low less than 0.5. This means that KINHDO has few debts. From the view points of the Board of Directors, this circumstance is not good at all. Invested a lot of money without using financial leverage, you gave too much, while the Net Sales or Net Income after taxes were not as high as expected, even worse.

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Secondly, the Current Ratio, which is the blue line has no obvious trend, it was up and down all the three years. The Current Ratio provides information about how liquidity the firm is. The higher the Current Ratio is, the more liquidity the firm has. However it is not good if the company has a really high Current Ratio. It means that enterprise is now holding too much capital by cash and is not flexible in reinvesting these capitals. Here, the current ratio of KINHDO is very high, which proves that company has strong liquidity but is not really good at controlling current capital. The Times interest earned ratio show that in 2009 and 2010, the company has powerful ability to pay off debt at the level of 13.08 and 15.93. However, it fell down strongly in 2011 at more than 2. This means that company lowered its ability to pay off debt. This is also support our analysis from the start that from 2010 to 2011, the company have problem of cost control leading to worse operating performance.

E. Future plan
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I. SWOT
1. Strengths - KINHDO holds 35% of market share of confectionary market in the whole country. - KINHDOs contribution system is well developed with the retail system spreads throughout Viet Nam. In term of confectionary, it has 40 bakeries, more than 200 distributors and 70000 retailers. In soft drink market, KINHDO owns 335 distributors and 104000 retailers. It also has 70 distributors and 15000 retailers of ice-cream and frozen foods. - The brand value of KINHDO had been built for over 10 years and has been widely known to consumers (13 years on the list of Vietnamese high quality products held by Sai Gon Tiep Thi magazine, ranked fourth in top ten of most famous brands in Viet Nam,)

- KINHDO has a wide range of products with international standard quality and competitive prices. - Effective management system with research ability and potential development are good. - KINHDO is very interested marketing activities.

2. Weaknesses 20

- Personnel management operations are not really professional, employee quit rate is high, dissatisfactory recognitions and working environment. Personnel machinery is complicated and lack of flexibility. KINHDO is a big company but still remains family management manner. - KINHDO is a famous brand mainly for the success of some products like moon cake or fresh cake. The processes of building successful brands for all products are uneven. - Only a very few products can meet the need of high quality market, most of the products are only suitable for low and average market segments. - Export activity is only in form of producing for foreign partners; KINHDOs brand is not well known in the foreign markets. - KINHDO is not really active in machinery and materials sources. It also still cannot exploit all the productivities of the machines. - The competitiveness awareness of KINHDOs staffs is not high. 3. Opportunities - Viet Nam joined WTO will make KINHDO widens the market and develops more new market segments. - The developments of science and technology facilitate the application of scientific advances into production in order to increase productivity and enhance products qualities. - The upcoming mergers with others company will help consolidate Kinh Dos position in the market and improve its corporation management quality. - Peoples higher incomes and the increase of consumers demands indicate that the domestic market has great potential. - Export market is expanding and becoming more potential because trade barriers and tariffs are removed. - Domestic competitors are small and weak at the moment. - Agricultural products of Viet Nam is increasing and becoming more abundant. 4. Threats 21

- Many competitors appear after Viet Nam joined WTO. - Many alternative products and fast foods appear. - Many countries bring out trade barriers as well as a lot of physical and chemical standards for the imported products which makes export faces difficulties. - Inflation, adverse fluctuations of foreign exchange rates and the complexity of gold and gas prices affect imported input materials. - Brain drain appears when foreign enterprises investments in this industry increase.

II. Future plan

1. Foundation 1.1. External factors * Evaluating the market accurately is a very essential thing because it is the fundamental to form a business strategy. But so far, there is still no official statistic of Viet Nam about the total confectionary production. To identify the Vietnamese confectionary markets volume, we depend on 2 information sources: - According to the data of Mar (one of the largest chocolate corporations in the world): the capacity of Vietnamese confectionary market in 2015 is about 156 million USD. - According to the Ministry of Planning and Investment in 2015 Spending of 1 Year person in 1 year for confectionary (VND) 25623 28134 33258 37589 42185 46215 Population (thousands of people) 77635 78685 79727 80902 82031 83119 Market capacity (billion VND) 1989 2214 2652 3041 3460 3841 22

2000 2001 2002 2003 2004 2005

2006 2007 2015 (estimated)

48987 52462 96428

84366 85642 96464

4133 4492 9302

* An objective fact is that today businesses have to deal with the trading conditions which are becoming harder and rougher: - The rapid development of science and technology advances raises more new needs. - Customers demands and selections for different products are getting higher and stricter. - The alternative ability of different products. - The competitiveness in the market is increasingly fiercer 1.2. Internal factors KINHDO is holding 35% of domestic market share; this rate is quite high in a market which has many confectionary suppliers participated in. However, KINHDO still leaves out the open market in rural areas. The potential of this market is very large because the residents incomes in these areas have been increasingly improved. On the other hand, KINHDO mainly exploits the domestic market through traditional channels which are distributors and KINHDO bakeries. Nowadays, the trend of channels is changing a lot. Beside the traditional channels, today there are many supermarkets, specialized stores (chain store, franchise), convenient store, direct sale, channel link, website Peoples shopping habits are changing too such as shopping on the weekend in one place that they can buy all the things they need in a short time. 2. Plans 2.1. Plans * PLAN 1: Opening more distributors and retailers in rural areas, bakeries in provinces and cities which are populous but hadnt been exploited.

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Rural market is almost untapped, despite the fact that rural residents account for nearly 70% of the whole countrys population. Therefore, opening more distributors in these areas is totally reasonable. This is also aligned with KINHDOs strategy in the period from 2012 to 2015 which is to expand distribution channels and develop the major labels. Detailed plan: - Opening 20 distributors in North West and North Central Coast because these areas hadnt been approached while the demands are increasing. These provinces are: Hoa Binh, Son La, Dien Bien, Lai Chau, Lao Cai, Yen Bai, Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, Thua Thien Hue. - Bakeries are chains of store system offering fresh breads and many kinds of confectionary. Kinh Do bakeries are only open in 2 big cities which are Ha Noi and Ho Chi Minh City. Nowadays, with the rapid developments of many provinces and cities, we propose to open 10 bakeries in provinces and cities which have high economic development rate and higher residents incomes. They are: Quang Ninh, Hai Phong, Da Nang, Can Tho, Da Lat, Hue, Nha Trang, Nam Dinh, Vinh, Buon Ma Thuot. These bakeries will be built in the same style of KINHDOs existing bakeries with two typical colours: red and yellow. Staffs will be well trained with sale and marketing skills to bring utter conveniences to customers. * PLAN 2: Launching a premium confectionary products line. Vietnamese living standards are becoming higher therefore premium market is getting more attentions. However, KINHDO hadnt exploited this market much. Running business in this market segment will bring variety benefits for KINHDO such as increasing revenues, profitability and raising its brand value Therefore, launching a premium product line will satisfy these demands. With the goal of achieving 4500 billion VND in revenue in 2012, this plan will have great contribution to make KINHDO come closer to its target. 24

Detailed plan: First of all, KINHDO will develop 2 premium products that are Moon Cake and Fresh Cake. These are products that KINHDO have large market share with moon cake is 76% and bread, fresh cake are 64%. We hope that launching premium line with products which are already popular and have large market share will make it easier to approach customers. - In term of Moon cake, there will be more products with new flavours not only for the purpose of tasting but also for giving as presents. New premium flavours are abalone, sharks fins, swifts nest... Packages will also be improved to become more luxury and appealing to match with the product. - In term of fresh cake, we offer more kinds of cake with more flavours such as butter, cheese, bacon, coconut, strawberry, mushroom and onion Gateaux will be made by French technology which is very famous for this product. These products will be promoted in bakeries firstly in 2 big cities which are Ha Noi and Ho Chi Minh City. With this product line, bakeries will offer online order and delivery from website or through their telephone. Delivery will be totally free so it will increase the convenience and loyalty of customers. 2.2. Supporting figures * Plan 1 - By measuring the average cost per bakeries opened up ( over all 10 bakeris in some convinces) , we assume all factors related like house- leasing cost, energy ( electricity, water), employment payment, taxes to get out the average expense of approximately 1.1 billion VND per bakery, with totally 11,000,000,000 VND all 10 bakeries. Expenditure for opening 20 distributors is around 2 billion VND (each distributor needs 100 million VND). Opening distributors is cheaper than bakeries because we dont need to pay for renting places, employees salaries or rebuilt expenses

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- It will reach the interest rates averagely 15% annually. Total revenues of opening 10 bakeries and 20 distributors is estimated about 10 billion VND in the first year, 12 billion VND in the second year and 15 billion VND in the third year - Therefore, we can calculate the ratios of this 3 - year plan are: NPV (Net present value) is 14.632 billion VND, IRR is 71.1%. These ratios indicate great results. * Plan 2 - The project will be implemented its very first steps in the beginning of the year 2012. The initial investment is estimated at approximately 200,000,000,000 VND which is used to buy machines and others things needed for the production line as a whole. This line will be set up in KINHDO factories located in Hung Yen and Binh Duong to decrease the cost of delivering to Hanoi and Ho Chi Minh City because our luxury products will be first sold in these two big cities. - This line is capable of producing more than 2200 tons of moon cakes, 20,000 tons of fresh cakes and gateaux every year. - This 10 - year project is expected to create 150,000,000,000 VND revenues for KINHDO every year in term moon cakes, fresh cakes and gateau, and it will reach the interest rates averagely 15% annually. - This project is worth pursuing since its NPV (Net present value) will have positive value, with the figure being 552,815,294 VND. In addition, another index IRR (Internal rate of return) is estimated approximately 72%. These are very good results. * Totally, both projects add value for the companys shareholder because NPV >0. In other words, they bring a certain amount of benefits, increase sales contributed to whole company and allow it to easily present itself to potential investors.

F. Conclusion
This report provided an analysis of the external as well as internal factors that affect the position of Kinh Do not only in the present but also in the future. We

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used the approach of analyzing financial ratio in order to evaluate the current financial status of the company including profitability, efficiency, liquidity and ability to pay off debt. Based on this, we suggest two potential projects which, we expect, would improve the performance of the company in the long term. Methods of analysis include SWOT, comparative analyses as well as ratio such as profitability, debt, quick ratio, etc. Through analysis, we found that Kinh Do has many positive signals for development such as: high gross profit margin, high debt, quick, current ratio. Although there were some decrease in operating profit margin, ROA, ROE from 2010 to 2011, Kinh Do still has ability to recover because the problem just lies in cost control. Specifically, we suggest two projects of investment to pursue in the next period. Firstly is to open 20 distributors and retailers in rural areas. The second one is the investment in the new premium production line. These plans are suitable with the market situation and have many advantages to establish. The calculation of Net present value and internal rate of return is attached with this report. Results show that the two projects are potential and would bring many benefits to the company. Despite of the fact that we put so many efforts on this report, it must be remembered that this analysis may contain some small inevitably shortcomings. However, we believe that it would be useful for our company to direct to the goal of becoming the leading Vietnamese trusted in nutrient and healthy products for human life. We are sincerely hope that all the shareholders of the company may enthusiastically support and sponsor capital for not only two plans but also other strategies in the future; so that our firm will develop more rapidly and remaining loyalty from customers in Viet Nam, as well as ensuring and improving living standard for all employees in the factories and branches of Kinh Do.

G. Reference
Books: Finance, ZVI Bodie and Robert C.Merton, 2000, Prentice Hall Websites:

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http://www.kinhdo.vn/ http://kinhdo.vn/Investors/1-cong-ty-co-phan-kinh-do.html http://www.kinhdobakery.vn/default.aspx http://www.kilobooks.com/archive/index.php/t-28667.html

H. Appendix
KDC - Cng ty C phn Kinh Income Statement Sn: HOSE Lnh vc : Hng tiu dng > Thc phm & ung Source: http://finance.tvsi.com.vn/FinancialStatements.aspx# 2007 2008 2009 2010 2011 28

( kim ( kim ( kim ( kim ton) ton) ton) ton) 1. Doanh s 2. Cc khon gim tr 3. Doanh s thun 4. Gi vn hng bn 5. Li gp 6. Thu nhp ti chnh 7. Chi ph ti chnh - Trong : Chi ph li vay 8.Chi ph bn hng 9. Chi ph qun l doanh nghip 10 Li/(l) t hot ng kinh doanh 11. Thu nhp khc 12. Chi ph khc 13. Thu nhp khc, rng 13b. Li/(l) t cng ty lin doanh 14. Li/l rng trc thu 15. Thu thu nhp doanh nghip hin thi

( kim ton)

1,238,339 1,466,192 1,539,223 1,942,808 4,278,052 -7,537 -10,424 -9,867 -9,174 -31,166

1,230,802 1,455,768 1,529,355 1,933,634 4,246,886 -908,825 -1,085,980 -1,023,963 -1,248,244 -2,573,746 321,978 97,000 -44,309 -31,710 -95,427 -72,968 206,274 21,150 -11,001 10,149 6,045 222,469 369,789 118,538 -313,379 -52,364 -133,178 -121,882 -80,112 28,373 -8,807 19,566 -1,143 -61,689 505,393 63,854 8,807 -43,758 -164,175 -112,090 301,789 376,776 -118,936 257,840 12,680 572,309 -60,919 685,390 663,953 -242,453 -42,458 -347,589 -141,635 617,667 36,464 -12,800 23,664 34,962 676,293 -110,883 1,673,140 127,493 -180,680 -117,213 -943,674 -331,706 344,573 18,467 -20,753 -2,285 6,894 349,181 -87,310

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16. Thu thu nhp doanh nghip hon li 17. Chi ph thu thu nhp doanh nghip 18. Li/(l) thun sau thu

1,659 1,659 224,127

1,087 1,087 -60,602

11,553 -49,366 522,943

15,502 -95,381 580,912

16,765 -70,546 278,635

KDC - Cng ty C phn Kinh Balance Sheet Sn : HOSE Lnh vc : Hng tiu dng > Thc phm & ung Source: http://finance.tvsi.com.vn/FinancialStatements.aspx# 2007 2008 2009 2010 2011 ( kim ( kim ( kim ( kim ( kim ton) ton) ton) ton) ton) TI SN A. Ti sn ngn hn I. Tin v tng ng tin II. Gi tr thun u t ngn hn III. Cc khon phi thu IV. Hng tn kho, rng V. Ti sn lu ng khc B. Ti sn di hn I. Phi thu di hn II. Ti sn c nh III. Gi tr rng ti sn u t IV. u t di hn V. Ti sn di hn khc 797,350 3,725 673,385 17,012 994,535 32,318 1,754,629 1,474,434 2,510,074 2,328,288 2,558,533 530,438 522,518 560,318 136,272 5,082 206,808 584,291 489,407 181,656 12,271 984,611 518,184 825,183 162,476 19,621 672,316 160,411 967,330 373,770

1,018,355 724,911 434,328 42,877 398,032 94,489

1,312,846 1,508,976 1,737,527 2,703,632 3,250,888 30,911 480,860 31,059 749,092 22,553 656,085 612 345

1,279,053 1,431,033 29,165 26,592

1,163,079 1,255,715 104,720 143,692 30

TNG CNG TI SN NGUN VN A. N phi tr I. N ngn hn II. N di hn B. Vn ch s hu I. Vn v cc qu II. Vn ngn sch nh nc v qu khc C. Li ch c ng thiu s TNG CNG NGUN VN

3,067,474 2,983,410 4,247,601 5,031,920 5,809,421

593,513 467,800 125,713

835,926 663,885 172,041

1,767,440 1,176,457 1,959,475 1,632,683 1,045,048 1,783,560 134,757 131,409 175,915

2,453,494 2,075,923 2,418,021 3,739,265 3,814,673 2,447,396 2,075,923 2,413,130 3,739,265 3,814,673 6,098 20,468 71,561 4,891 62,140 116,198 35,273

3,067,474 2,983,410 4,247,601 5,031,920 5,809,421

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