GENERAL INFORMATION

Vietnamese Name Công ty Cổ Phần Vĩnh Hoàn

English Name Vinh Hoan Corporate

Business Registration Certificate No. 5103000069 issued by Department of Planning and Investment of

Dong Thap Province

Charter Capital 471,510,000,000 VND

Number of Shares Outstanding (as of 92,403,943

3/12/2019)

Stock Exchange HOSE

Stock Symbol VHC

Headquarter Highway 30, Ward 11, Cao Lanh City, Dong Thap Province
 FORECASTING
2014 2015 2016 2017 2018

Net Sales 6,292,449 6,493,390 7,303,546 8,151,497 9,323,218

Growth 3.19% 12.48% 11.61% 14.37%

COGS 5,469,173 5,690,816 6,236,783 6,979,607 7,281,049

% COGS 87% 88% 85% 86% 78%

 FORECASTING
• Operating ratios are based on the average of the last 5 years, except for the COGS, and
remain unchanged during the forecasting process.
• No additional notes payable, LT bonds, or common stock will be issued.
• The short-term investments are kept at the same amount as in the end of 2018. Other
additional investments will be due within the year and not recorded in the financial
statements
• Interest expense for note payable and LT bonds are based on the average balances
during the year.
• If additional financing is needed, then it will be raised through a line of credit. The line of
credit will be tapped on the last day of the year, so there will be no additional interest
expenses due to the line of credit.
• If surplus funds are available, the surplus will be paid out as a special dividend payment.
If this fund exceeds the Net Income, regular dividend payout ratios will be reduced down
to 0% and the surplus after paying special dividend will go to Cash and Cash Equivalent
account for short-term investments.
 FORECASTING
2019-2021 Pro Forma Income Statement (In million VND)
2019 2020 2021
Net Sales 10,721,701 12,329,956 14,179,449
COGS 7,505,190 8,630,969 9,925,614
Gross Profit 3,216,510 3,698,987 4,253,835
Operating Expense 513,764 590,829 679,453
Interest Expense 76,943 88,484 101,757
Depreciation Expense 1,072,170 1,232,996 1,417,945
Operating Profit 2,702,746 3,108,158 3,574,381

Other Income (Loss) -14,828 -17,052 -19,610

EBT 2,687,918 3,091,106 3,554,772
Income Tax 178,372 205,128 235,897
Net income 2,509,546 2,885,978 3,318,875
Dividend 0 0 0
Special Dividend 2,509,546 2,885,978 3,015,069
 VALUE OF OPERATION
2019 2020 2021

FCF 305,555 2,380,795 2,434,108

WACC 19%

Discounted FCF 265,700 1,680,528 1,443,529

Terminal Growth Rate (GDP Rate) 6.7%

Terminal Value 7,411,227

Value of operations 10,800,985

 INTRINSIC VALUE
Value of operations 10,800,985

Marketable Securities 0

Total of Value 10,800,985

Preferred Stock 0

Debt 0

Intrinsic Value 10,800,985

Outstanding Share 92,403,943

Intrinsic Stock Price Per Share 116,889 VND

 MARKET VALUE ADDED
Value of operations 10,800,985

Book Value of Equity 3,978,508

Book Value of Debt 0

Book Value of Preferred Stock 0

Market Value Added 6,822,477

 CAPITAL TRUCTURE POLICY
OPTIMAL CAPITAL STRUCTURE

Weight of Debt Weight of Equity Cost of Debt Cost of Equity Beta WACC

0% 100% 0% 19.02% 0.74 19.02%

10% 90% 9.00% 20.02% 0.80 18.74%

20% 80% 10.0% 21.26% 0.88 18.61%

30% 70% 11.0% 22.86% 0.99 18.64%

40% 60% 12.0% 25.00% 1.13 18.84%

50% 50% 13.0% 27.98% 1.33 19.19%

60% 40% 14.0% 32.46% 1.62 19.70%

70% 30% 15.0% 39.92% 2.11 20.38%

 DIVIDEND POLICY
CAPITAL BUDGET (MILLION VND)

2018 2019 Net

Cash 43,242 1,269,616 1,226,374

Account Receivable 1,999,772 1,767,943 -231,829

Inventories 1,376,800 1,914,253 537,453

PPE 1,407,417 1,875,323 467,906

Account Payables 272,722 354,432 81,710

Accruals 0 0 0

CAPITAL BUDGET 1,918,196

 DIVIDEND POLICY
Capital Budget 1,918,196

Optimal capital structure

Weight of Equity 80%

Weight of Debt 20%

Net income 2019 2,509,546

Distr. 974,990

Payout ratio 39%

 CASH CONVERSION CYCLE
Net Sales 9,323,218 Million VND

Cost of Goods Sold 7,281,049 Million VND

Account Receivable 1,999,772 Million VND

Inventory 1,376,800 Million VND

Account Payable 272,722 Million VND

Days 365
Inventory Conversion Period 69.019 days
Average Collection Period 78.290 days
Payables Deferral Period 13.672 days
Cash Conversion Cycle 133.638 days