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DA NANG UNIVERSITY OF ECONOMICS Faculty of International Business REPORT FINANCIAL STATEMENT ANALYSIS SAIGON BEER ALCOHOL BEVERAGE CORPORATION Academic Advisor Ph D Thái Thị Hồng Ân Class Code FIN3004.
DA NANG UNIVERSITY OF ECONOMICS Faculty of International Business REPORT FINANCIAL STATEMENT ANALYSIS SAIGON BEER ALCOHOL BEVERAGE CORPORATION Academic Advisor : Ph.D Thái Thị Hồng Ân Class Code : FIN3004_46K01.3 Group : Lê Thị Hà An Nguyễn Thị Thùy Dương Hoàng Thị Tường Vy Nguyễn Nhật Lam Nguyễn Như Quân Class : 46K01.3 Da Nang, November, 2021 INDIVIDUAL CONTRIBUTION EVALUATION No Student Name Evaluation Individual Duties (Attitude, Submit on time/late, ect) Lê Thị Hà An Key milestone, strategy promoting the revenue of company; Comment the capital structure & conclusion; Format the report Nguyễn Thị Thùy Dương The sight of the company’s main sources of income; Comment market value ratios & conclusion Nguyễn Nhật Lam Operation industry of company; Comment turnover ratios & conclusion Positive attitude; Submit deadlines on time; Join meeting on and actively give suggestions for the report Positive attitude; Submit deadlines on time; Join meeting on and actively give suggestions for the report Positive attitude; Submit deadlines on time; Join meeting on and actively give suggestions for the report % Contribution 100% 100% 100% Hoàng Thị Tường Vy General information of the company; Core business activities; Comment profitability ratios & conclusion Positive attitude; Submit deadlines on time; Join meeting on and actively give suggestions for the report 100% Nguyễn Như Quân Positive attitude; The company’s assets Submit deadlines on and liabilities; time; Join meeting Comment liquidity on and actively give ratios & conclusion suggestions for the report 100% GROUP – Class 46K01.3 TABLE OF CONTENTS I Overview Saigon Beer Alcohol Beverage Corporation (SAB) General information of company a) Vision: b) Mission: c) Core values: Core business activities Key milestones of Saigon Beer Beverage Operation industry of company Strategies to generate returns in the context of economic and industry conditions a) Focus on 4Cs Commitment Strategy: b) Promote stakeholder engagement: c) Diversify different lines and designs of products on the domestic and international market: d) Strengthen relationships with investors and maintain fairness and benefits for shareholders: II Overview The Company’s Finance Key assets Key liabilities The sight of the company’s main sources of income a) Income classification by sales channel: b) Income classification by distributions channel: c) Income from business activities: III Analyze the financial report: 10 Liquidity ratios 10 a) Analyzation: 10 b) Comparing to the industry averages ratios and competitors’ ratios: 10 c) Reasons for the tendency of changes in liquidity ratios: 12 Capital Structure ratios: 12 a) Analyzation: 12 b) Comparing to the industry averages ratios and competitors’ ratios: 13 c) Reasons for the tendency of changes in capital structure ratios: 16 Turnover ratios 16 GROUP – Class 46K01.3 a) Analyzation: 16 b) Comparing to the industry averages ratios and competitors’ ratios: 18 c) Reasons for the tendency of changes in turnover ratios: 20 Profitability ratios 20 a) Analyzation: 20 b) Comparing to the industry averages ratios and competitors’ ratios: 22 c) Reasons for the tendency of changes in profitability ratios: 24 Market value ratios 24 a) Analyzation: 24 b) Comparing to the industry averages ratios and competitors’ ratios: 25 c) Reasons for the tendency of changes in market value ratios: 28 IV Conclusion 28 V Calcaluted data for SABECO: 29 VI References: 30 GROUP – Class 46K01.3 LIST OF TABLES Table 1.1 SABECO's current ratio in years 2017-2021 10 Table 1.2 SABECO's quick ratio in years 2017-2021 10 Table 1.3 Compared total quick ratio among SABECO, HABECO and industry from 2017 to 2021 11 Table 1.4 Compared total current ratio among SABECO, HABECO and industry from 2017 to 2021 11 Table 2.1 Total debt ratio of SABECO from 2017 to 2021 12 Table 2.2 Debt to equity ratio of SABECO from 2017 to 2021 13 Table 2.3 Equity multiplier of SABECO from 2017 to 2021 13 Table 2.4 Compared total debt ratio among SABECO, HABECO and industry from 2017 to 2021 14 Table Compared debt to equity ratio among SABECO, HABECO and industry from 2017 to 2021 14 Table 2.6 Compared equity multiplier ratio among SABECO, HABECO and industry from 2017 to 2021 15 Table 3.1 Inventory turnover of SABECO from 2017 to 2021 16 Table 3.2 Receivables turnover of SABECO from 2017 to 2021 17 Table 3.3 Fixed asset turnover of SABECO from 2017 to 2021 17 Table 3.4 Total asset turnover of SABECO from 2017 to 2021 17 Table 3.5 Compared inventory turnover among SABECO, HABECO and industry from 2017 to 2021 18 Table 3.6 Compared receivables turnover among SABECO, HABECO and industry from 2017 to 2021 18 Table 3.7 Compared fixed asset turnover among SABECO, HABECO and industry from 2017 to 2021 19 Table 3.8 Compared total asset turnover among SABECO, HABECO and industry from 2017 to 2021 20 Table 4.1 SABECO’s profit margin from 2017 to 2021 21 Table 4.2 Analyzing SABECO’s ROA rates from 2017 to 2021 21 Table 4.3 Analyzing SABECO’s ROE rates from 2017 to 2021 22 Table 4.4 Compared profit margin among SABECO, HABECO and industry from 2017 to 2021 22 Table 4.5 Compared return on assets rate (ROA) among SABECO, HABECO and industry from 2017 to 2021 23 Table 4.6 Compared return on equity rate (ROE) among SABECO, HABECO and industry from 2017 to 2021 23 Table 5.1 EPS and P/E of SABECO from 2017 to 2021 25 Table 5.2 Sabeco’s P/B ratio from 2017 to 2021 25 Table 5.3 Compared earning per share (EPS) among SABECO, HABECO and industry from 2017 to 2021 26 Table 5.4 Compared price/earning ratio (P/E) among SABECO, HABECO and industry from 2017 to 2021 26 Table 5.5 Compared price/earning ratio (P/B) among SABECO, HABECO and industry from 2017 to 2021 27 GROUP – Class 46K01.3 I Overview Saigon Beer Alcohol Beverage Corporation (SAB) General information of company - Corporate Name: TONG CONG TY CO PHAN BIA – RUOU – NUOC GIAI KHAT SAI GON - English Name SAIGON BEER – ALCOHOL – BEVERAGE CORPORATION - Abbreviated Name: SABECO - Established day: 01/06/1977 - Charter Capital: VND 6,412,811,860,000 - Legal Representatives: Mr Koh Poh Tiong - Chairman of the Board of Directors - Mr Neo Gim Siong Bennett - General Director - Registered Office 187 Nguyen Chi Thanh, Ward 12, District 5, Ho Chi Minh City, Vietnam - Headquarters 5th Floor, Vincom Center, 72 Le Thanh Ton, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam - Email sabeco@sabeco.com.vn - Website: https://www.sabeco.com.vn a) Vision: “Develop SABECO to become the leading beverage group in Vietnam, having a firm foothold in regional and international markets.” (2025) b) Mission: - Develop Vietnam’s beverage industry to keep pace with the world - Promote the culinary culture of Vietnamese people - Improve the quality of life by providing high-quality, safe and healthy beverages - Bring practical benefits to shareholders, customers, partners, employees and society - Satisfy and meet the needs of beverages under the international food safety standards “Food hygiene and safety and environmental protection” - Fulfill obligations to the State on the basis of transparency in business - Actively participate in community activities - Ensure the development towards international integration c) Core values: Traditional brand: The superiority of a traditional brand is built and confirmed over time Customers have many choices and are well taken care of the services SABECO has become a “top of mind” in the hearts of customers Social Responsibility: The development of social responsibility is the tradition of SABECO We provide the society safe and useful products, and we always wish to share and take responsibility for social work and environmental protection with practical action Cooperation for Mutual Benefits: We build "mutually beneficial" partnerships as the basis for sustainable development We develop appropriate policies for long cooperation with partners Sticking: Sticking to a friendly, sharing environment Where people are empowered to learn, create and contribute to the joy of success GROUP – Class 46K01.3 Continuous improvement: We are not satisfied with present and are always dreaming of rising, learning, creating, and innovating to meet constantly changing needs Continuous learning, creativity and innovation is our style Core business activities - Produce and sell beer, alcohol and beverages and related products including materials and packaging; - Provide transportation, logistics and warehousing services; - Manufacture mechanical products, build steel components and provide mechanical installation services; and - Provide construction and real estate services Key milestones of Saigon Beer Beverage - 1875: A little brewery established by Victor Larue in Saigon - 1977: The foundation of Saigon Beer Factory - 1985: Introduction of 333 beer can on the market - 1992 - 1999: Introduction of many lines of Saigon beer under the design of bottle & appearance of Saigon Beer Company (1993) - 2003: The foundation of Saigon Beer - Alcohol - Beverage Corporation (SABECO) - 2016 - 2018: SABECO has been listed on HOSE (2016) and accepted the transfer in the structure of the managerial organization (Thaibev) - 2019 - 2021: The relaunch of 333 and Bia Saigon; achieve in the Australian international beer Awards Operation industry of company In recent years, Vietnam's food and beverage market has become attractive to foreign businesses through a series of transfer, merger, and acquisition deals between foreign and domestic enterprises The domestic market, when there are foreign enterprises, has become vibrant and since then the competition among domestic enterprises has also become stronger than ever Competing businesses can be mentioned such as: ➢ Heineken: It is a large enterprise in the world with the strength of beer production Heineken has the strength of brand and class, so it has dominated most of the segments premium line beer Although the beer output is only ½ of that of SABECO (domestic beer production company), the profit is nearly 2,000 billion VND per year Heineken will not stop there; Heineken will continue to hit the Vietnamese market because this market is one of the strongest beer consumption markets ➢ Carlsberg: It is also a major beer producer in the world This company has been present in Vietnam since the early 90s From the beginning, Carlsberg has had "great tricks" and has gradually stood firm in the Vietnamese market ➢ Habeco: Although it is a domestic enterprise, it can still compete with the above enterprises and SABECO With foreign enterprises, Habeco competes on brands, with domestic enterprises, Habeco competes on domestic prices and positioning products in customers' minds, preferring to use Vietnamese products The active presence of foreign enterprises in the Vietnamese market opens up many opportunities for cooperation and investment in production in industrial parks, creating jobs for workers, transferring technology, and bringing products into the world GROUP – Class 46K01.3 diversification and utility However, this is also a big challenge for domestic enterprises when their competitiveness is still weak, requiring efforts in innovating and adapting to integrate into the common commercial "playground" Therefore, along with diversifying products to meet the trend of consumer tastes, it is more important for food and beverage businesses to increase product quality from every stage in the production chain We can see that the food and beverage industry is very potential and promising in the future Strategies to generate returns in the context of economic and industry conditions a) Focus on 4Cs Commitment Strategy: The 4Cs Commitment Strategy belongs to the corporation’s sustainable development activities, including four pillars: promoting consumption, adapting environment conversation, bringing the country's pride, and supporting traditional culture This strategy forwards building the brand in the long run b) Promote stakeholder engagement: SABECO should take advantage of its collaborative and close engagement with all stakeholders based on trust, transparency, and mutual benefits They can be the strongest motivators in orienting substantial development as well as expanding the scale of products c) Diversify different lines and designs of products on the domestic and international market: SABECO focuses on diversifying SABECO products from tastes to design to meet the constantly changing demand of customers and increase their competitive ability In addition, the company also survey and analyze the market before creating a new version to catch the beer-consuming tendency in the domestic and global markets d) Strengthen relationships with investors and maintain fairness and benefits for shareholders: The company continue to ensure the public annual disclosures are accurate and timely and must to update the relevant document within 21 days before the shareholders’ meeting for the research process Moreover, proactively communicating with investors and interested parties through emails, phones, and press releases to attract investment sources better is considered as one good measure II Overview The Company’s Finance Key assets Total assets were VND 30,487 billion in 2021 (Short-term financial investments 56%, Long-term assets 25%), increased by 11,4% YTD The current assets increased by 17,2% YTD, mainly coming from higher cash and cash equivalent, term deposit, and inventories The long-term assets decreased by 3,2% YTD, basically coming from OCB and DIG divestment and lower profit sharing from investments in joint ventures and associates Key liabilities Liabilities were VND 7,892 billion in 2021, increased by 28,1% YTD, mainly coming from 2021 dividend payables, trade account payables for packaging, and Saigon Beer - Quang Ngai Brewery expansion and higher accrual of marketing and promotion expenses The sight of the company’s main sources of income a) Income classification by sales channel: - Retail: SABECO’s retail system is distributed throughout 63 provinces and cities across the country with more than 600.000 outlets GROUP – Class 46K01.3 - Wholesale: SABECO has a wide wholesale network with master trading company, 10 regional trading companies, 26 Subsidiaries, and 18 Associates and Joint Ventures - Export: SAB promotes export products to overseas markets, currently accounting for only 2% of total income SAB planned to promote the export Saigon beer and 333 beer Up to now, SABECO has exported Saigon Beer products to many overseas markets, including: + The Americas: USA, Canada, Chile, Panama… + Europe: Denmark, Germany, France, Netherlands, Sweden, Switzerland, Spain, Russia, England, … + Oceania: Australia, New Zealand + Africa: West Africa + Asia: Laos, China, Japan, Taiwan, Korea, Singapore, Philippines, Hong Kong, Malaysia, Cambodia, Thailand, b) Income classification by distributions channel: SABECO has two main distribution channels: on-trade and off-trade Under the impact of Decree No.100 and Covid-19, off-trade became the main driver for the growth of SABECO, while income from on-trade was almost equal to zero during social distancing c) Income from business activities: - - - Beer: Saigon beer, Gold Saigon, Chill Saigon Special, Saigon Export, Bia Saigon Lager, Beer 333, In particular, SABECO's Saigon Beer has been the leading brand in Vietnam for many years This is the product group that accounts for SABECO's largest output Therefore, this source of income accounts for the majority of SABECO's total income, with 86,30% in 2020 Materials Trading: Materials Trading is the second largest source of income for SABECO, accounting for 13,17% of total income in 2020 Beverages: SABECO provides a lot of beverages such as Sa Xi Chuong Duong, Sa Xi Chuong Duong, Nam Phuong Bird’s Nest Aloe Vera, Soda Chuong Duong, Bottled Drinking Water Chuong Duong, However, they account for only a small part of total income at 0,69% Wines & Liquors: Ruou Nep Binh Tay Rice Liquor, Nang Huong Rice Liquor, Feel Cocktails, De Binh Tay Rice Liquor, John Saigon, Caravelle Red GROUP – Class 46K01.3 Rhum, This product group brings the lowest income, accounting for only 0,15% of SABECO's total income III Analyze the financial report: Liquidity ratios a) Analyzation: ➢ Current ratio (Unit: VND, %) 2017 2018 2019 20202 Current assets 13.686.327 476.651 14.690.168 205.219 19.164.602 511.633 19.513.381.452 22.877.033 .440 322.264 Current liabilities 7.401.584.6 03.555 5.925.696 932.383 6.087.830.0 53.039 5.173.043.219 7.258.020.5 872 35.153 Current ratio 1,85 2,48 3,15 3,77 2021 3,15 Table 1.1 SABECO's current ratio in years 2017-2021 The ratio grew steadily from 2017 and reached 3,77 in 2020 but reduced in 2021 However, SABECO still keeps it at a high value, which shows that the company is ready to pay its debts and pretty worthy to be invested On the other hand, SABECO may have invested too much in short-term assets or in other words, the management of short-term assets could be not effective ➢ Quick Ratio (Unit: VND, %) 2017 2018 2019 2020 Current assets 13.686.327 476.651 14.690.168 205.219 19.164.602.5 11.633 19.513.381.4 22.877.033.3 52.440 22.264 Inventory 2.003.535 067.335 1.813.754.1 90.894 1.967.137.71 9.907 1.446.832.99 1.668.001.73 4.933 4.209 Short - term liabilities 7.401.584 603.555 5.925.696.9 32.383 6.087.830.05 3.039 5.173.043.21 7.258.020.53 9.872 5.153 Quick ratio 1,58 2,17 2,82 3,49 2021 2,922 Table 1.2 SABECO's quick ratio in years 2017-2021 As can be seen from the table, the quick ratio is much bigger than 1, which shows that SABECO 's solvency is still good, inventory accounts for a low and insignificant proportion in years, the company does not need to worry about liquidating inventory b) Comparing to the industry averages ratios and competitors’ ratios: ➢ Quick ratio GROUP – Class 46K01.3 10 exceeded SABECO within this total period, ranging from 2% - 10% However, a slight increase of 5% was highlighted in the end timeframe for the three objects surveyed SABECO, HABECO and the average industry experienced a remarkable decrease in the equity multiplier by 0,25 times; 1,25 times, and 0,75 times in the equivalent figure at the end of 2020 Nevertheless, this ratio increased moderately, standing at around 1,25 times after one year (2021) for the three objects surveyed c) Reasons for the tendency of changes in capital structure ratios: The first reason for these changes is that SABECO determined to introduce more similar products to the original 333 beers, improve the logistic system, applying the SABECO 4.0, resulting in the profit after tax of the company gaining from 5,053 to 4,117 billion VND during the period of 2017 - 2020 A slight decline was recorded in all of the capital structure ratios in 2021 can be explained by the proper modifications in the economic strategy after Covid 19 In addition, SABECO has made a lot of efforts to recover and develop the brand better after Covid since 2020 and tried to cut down on the number of inventories and receivables accounts, leading to a reduction in the total amount of debt Turnover ratios a) Analyzation: ➢ Inventory turnover (Unit: Times) 2017 2018 2019 2020 2021 Cost of goods sold (25.327 (27.864 (28.348 (19.460 (18.765 872.489 413.389 430.809 229.052 181.482 662) 551) 281) 562) 365) Average inventory 2.003.53 1.813.75 1.967.13 1.446.83 1.668.00 5.067.33 4.190.89 7.719.90 2.994.93 1.734.20 Inventory turnover 12,64 15,36 14,41 13,45 11,25 Table 3.1 Inventory turnover of SABECO from 2017 to 2021 From the table above, the number of times SABECO sells inventory yearly varies above 11,25 in years It increased from 12,64 to 15,36 between 2017 and 2019 before gradually falling the next year to 11,25 in 2021, which means that inventory sales are decreasing and there is a bit of ineffectiveness in inventory control ➢ Receivables turnover (Unit: Times) 2017 Sales GROUP – Class 46K01.3 2018 2019 2020 2021 34.193.3 35.948.5 37.899.0 27.961.3 26.373.7 90.554.2 52.561.9 59.501.2 23.837.0 46.293.8 39 47 95 11 58 16 Accounts receivable short-term 715.326 765.630 568.608 590.846 467.956 353.415 597.003 377.917 416.109 130.071 Long-term receivables 20.093.7 5.860.73 9.110.08 11.958.3 12.640.8 75.062 1.012 0.970 90.566 50.386 Receivables turnover 46,50 46,60 65,60 46,39 54,88 Table 3.2 Receivables turnover of SABECO from 2017 to 2021 Looking at the index, we can see that receivables turnover has maintained at approximately 46,6 times in the first years before having a sharp increase to 65,6 times in 2019 However, in 2020 the figure fell dramatically to only 46,39 and climbed slightly to 54,88 in 2021 This shows that SABECO has faced with some problems in collecting debts from customers ➢ Fixed asset turnover (Unit: Times) 2017 2018 2019 2020 2021 Sales 34.193.3 35.948.5 37.899.0 27.961.3 26.373.7 90.554.2 52.561.9 59.501.2 23.837.0 46.293.8 39 47 95 11 58 Non-current assets 8.327.36 7.676.57 7.797.87 7.861.59 7.609.99 1.633.25 4.586.99 3.582.41 1.322.91 1.050.16 Fixed asset turnover 4,11 4,68 4,86 3,56 3,47 Table 3.3 Fixed asset turnover of SABECO from 2017 to 2021 It can be seen from 2017-2019, SABECO gives priority to investing in fixed assets Specifically, the increase from 4,11 in 2017 to 4,68 in 2018 shows that the company effectively used its investments in fixed assets to generate revenue However, by 2020 and 2021, it dropped sharply to only 3,56 and 3,47 times, respectively ➢ Total asset turnover (Unit: Times) 2017 2018 2019 2020 2021 Sales 34.193.390 554.239 37.899.0 27.961.3 26.373.7 35.948.55 59.501.2 23.837.0 46.293.8 2.561.947 95 11 58 Total assets 22.013.689 109.910 26.962.4 27.374.9 30.487.0 22.366.74 76.094.0 72.775.3 24.372.4 2.792.213 45 58 25 Total asset turnover 1,55 1,61 1,41 1,02 0,87 Table 3.4 Total asset turnover of SABECO from 2017 to 2021 GROUP – Class 46K01.3 17 Besides, it can be seen that SABECO's total assets fluctuated slightly, reaching the top at 1,61 in 2018 However, over the years, it is on a downward trend and by 2020 it was only 0,87 times, the lowest level in this period It is possible that SABECO is facing some problems of using assets acquired and inefficient generating sales revenue, also probably caused by some other external problems b) Comparing to the industry averages ratios and competitors’ ratios: ➢ Inventory turnover (Unit: Times) 2017 2018 2019 2020 2021 SABECO 12,64 15,36 14,41 13,45 11,25 HABECO 21,94 20,63 21,82 8,86 9,14 Average Industry 9,21 10,18 10,65 8,53 8,62 Table 3.5 Compared inventory turnover among SABECO, HABECO and industry from 2017 to 2021 ➢ Receivables turnover (Unit: Times) 2017 2018 2019 2020 2021 SABECO 46,50 46,60 65,60 46,39 54,88 HABECO 53,94 207,18 81,13 19,38 14,54 Average Industry 46,24 34,69 25,38 29,55 48,95 Table 3.6 Compared receivables turnover among SABECO, HABECO and industry from 2017 to 2021 GROUP – Class 46K01.3 18 ➢ Fixed asset turnover (Unit: Times) 2017 2018 2019 2020 2021 SABECO 4,11 4,68 4,86 3,56 3,47 HABECO 2,29 2,38 2,61 2,34 2,53 Average Industry 5,02 5,62 6,27 4,99 5,00 Table 3.7 Compared fixed asset turnover among SABECO, HABECO and industry from 2017 to 2021 ➢ Total asset turnover (Unit: Times) SABECO 2017 2018 2019 2020 2021 1,55 1,61 1,41 1,02 0,87 GROUP – Class 46K01.3 19 HABECO 1,05 0,95 1,15 0,96 0,94 Average Industry 1,43 1,44 1,46 1,09 0,99 Table 3.8 Compared total asset turnover among SABECO, HABECO and industry from 2017 to 2021 ➢ From tables and bar charts above, we can see that: Generally, there was a similar downward trend for all SABECO, HABECO and average industry in inventory turnover during the period 2017-2021 Moreover, by having good policy in managing inventory liquidity, SABECO has shortened the distance with HABECO, which at first was approximately twice as much as SABECO As for receivables turnover, the value of SABECO and industry had a tendency to go up while the figure for HABECO experienced a downward trend in the given period The figures fluctuates quite large and has a strong fluctuation in years From 2017 to 2019, HABECO had higher speed of debt collection, but in the last two year, SABECO has made a remarkable change compared to HABECO and industry index Regarding the fixed asset turnover, there was an uptrend in SABECO and the industry index while the data for HABECO shows a small decrease from 2017 to 2021 In addition, the fixed asset turnover of SABECO was always higher than HABECO and lower than the industry average For total asset turnover, in the first four year, the ratio of HABECO maintained higher than SABECO and lower than industry index as well However, by 2021, the number of total asset turnover decreased to only 0,87 times, which was the lowest point among all c) Reasons for the tendency of changes in turnover ratios: - In 2019, HABECO has reduced the number of inventories - There is a business expansion and preparing for future growth Profitability ratios a) Analyzation: ➢ Profit margin GROUP – Class 46K01.3 20 (Unit: VND, %) 2017 2018 2019 2020 2021 Net profit 4.948.599.251 4.402.749.94 5.370.147.70 4.936.845.97 3.929.305.5 864 6.424 8.542 0.254 47.238 Sales 34.193.390.554 35.948.552.5 37.899.059.5 27.961.323.8 26.373.746 .239 61.947 01.295 37.011 293.858 Profit Margin 14,47% 12,25% 14,17% 17,66% 14,90% Table 4.1 SABECO’s profit margin from 2017 to 2021 According to the data that we calculated from the table, the profit margin of SABECO in 2017 was 14,47% which means that this company had a net income of 14,47$ for each dollar of sales generated This rate fluctuated during the period 20172021, it strongly increased from 12,25% to 17,66% during 2018-2020 However, there was a slight decrease at the end of 2020 from 17,66% to 14,90% The profit ratio over the years from 2017 to 2021 has a positive value and tends to increase gradually over the years, proving that the business is profitable and the company has good production and business efficiency Generally, from 2017 to 2021, the growth of net profit was approximately proportional to sales Both were decreased ➢ Return on assets (ROA) (Unit: VND, %) 2017 2018 2019 2020 2021 Net profit 4.948.599.25 4.402.749.94 5.370.147.7 4.936.845.9 3.929.305.54 1.864 6.424 08.542 70.254 7.238 Total Assets 22.013.689.1 22.366.742.7 26.962.476 27.374.972 30.487.024.3 09.910 92.213 094.045 775.358 72.425 ROA 22,48% 19,68% 19,92% 18,03% 12,89% Table 4.2 Analyzing SABECO’s ROA rates from 2017 to 2021 In 2017, ROA of 22,48%, which means that for every 100 VND of assets invested in production and business activities on average, 22,48 VND of profit after tax was generated The return on assets (ROA) rate gradually decreased from 22,48% to 12,89% during the period 2017 - 2021 This indicates that in 2017 SABECO is more efficient and productive at managing its balance sheet to generate profits, while in 2021 this company needs to improve the balance sheet Total assets and net profit value were inverse From 2017 to 2021, net profit went down, but total assets still went up ➢ Return on equity (ROE) (Unit: VND, %) GROUP – Class 46K01.3 21 2017 2018 2019 2020 2021 Net profit 4.948.599.25 4.402.749.9 5.370.147.70 4.936.845.97 3.929.305 1.864 46.424 8.542 0.254 547.238 Owner’s equity 14.420.526.4 16.111.905 20.076.247.0 21.215.276.3 22.594.785 34.948 568.169 56.364 90.928 703.161 ROE 34,32% 27,33% 26,75% 23,27% 17,39% Table 4.3 Analyzing SABECO’s ROE rates from 2017 to 2021 According to the ROE rates table of SABECO company, we can see that: In 2017, the company's ROE was 34,32%, which means that for every 100 dong of equity invested in production and business activities, the company's revenue was 34,32 dong profit after tax Similar to ROA, during the period 2017-2021, there was a gradual decrease in the return of equity (ROE) rate from 34,32% to 17,39% From 2017 to 2021, the growth of net profit and owner’s equity were approximately proportional Both were increased All datas indicated that the company did not use equity in an effective way b) Comparing to the industry averages ratios and competitors’ ratios: ➢ Profit margin (Unit: %) 2017 2018 2019 2020 2021 SABECO 14,47 12,25 14,17 17,66 14,90 HABECO 8,69 7,33 7,08 8,86 4,66 Average Industry 11,94 10,84 12,30 15,00 11,98 Table 4.4 Compared profit margin among SABECO, HABECO and industry from 2017 to 2021 ➢ Return on assets rate (ROA) GROUP – Class 46K01.3 22 (Unit: %) 2017 2018 2019 2020 2021 SABECO 22,48 19,68 19,92 18,03 12,89 HABECO 9,14 6,99 8,14 12,10 6,13 Average Industry 16,40 15,02 17,25 15,85 11,24 Table 4.5 Compared return on assets rate (ROA) among SABECO, HABECO and industry from 2017 to 2021 ➢ Return on equity rate (ROE) (Unit: %) 2017 2018 2019 2020 2021 SABECO 34,32 27,33 26,75 23,27 17,39 HABECO 18,59 12,84 11,69 8,55 4,39 Average Industry 27,22 24,76 25,19 21,64 15,30 Table 4.6 Compared return on equity rate (ROE) among SABECO, HABECO and industry from 2017 to 2021 GROUP – Class 46K01.3 23 ➢ According to the data from tables and bar charts above We can see the difference in profitability ratios among SABECO, HABECO and beverage industry in a general view: About profit margin, the rate of SABECO, HABECO and industry fluctuated and tended to decrease from 2017 to 2021 SABECO's profit margin was times higher than HABECO's and slightly higher than the industry average’s profit margin In general, they were positive and SABECO will have a stable increase in the long run In terms of return on assets, the rates of SABECO, HABECO and industry had a tendency to go down from 2017 to 2021 SABECO’S return on assets was twice as high as HABECO’s In 2021, SABECO’s rate was approximately equal to the average industry’s rate (12,89% and 11,24%) This rate indicated that above companies used business assets effectively Similar to ROA, there was a downtrend in return on equity of SABECO, HABECO, and the industry during the period 2017 - 2021 These figures show that with dong of equity spent, SABECO earned more profit than HABECO and the whole industry This is a sign that capital was used effectively by SABECO c) Reasons for the tendency of changes in profitability ratios: In 2019, profit after tax decreased due to expenses’ increase: raw material prices, selling expenses, causing a decrease in profit In 2020, net revenue decreased because the epidemic situation affected the company's production and development In 2021, companies focused on developing and recovering from the covid- 19 pandemic Some foreign beers entering the market also have affected the overall market share of this industry Market value ratios a) Analyzation: ➢ Earning per share and price/earning ratio GROUP – Class 46K01.3 24 (Unit: VND, Times) 2017 Profit attributatble to ordinary shareholders Number of ordinary shares in issue 2018 4.433.72 3.969.453 3.480.97 757.797 2019 2020 4.794.631 311.413 2021 4.574.177.879 3.528.25 314 9.476.66 641.164 641.281.1 641.281.18 932 86 641.281.186 641.281 186 Market value per share 227.863 250.807 214.996 189.266 147.740 EPS 6.915,11 6.189,88 7.476,64 7.132,87 5.501,89 P/E 32,95 40,52 28,76 26,53 26,85 Table 5.1 EPS and P/E of SABECO from 2017 to 2021 It can be seen that SABECO's EPS had a significant fluctuation in the period 2017-2021 This figure increased considerably from 6189,88 to 7476,64 in 2018-2019 However, it tended to decrease gradually until 2021 with only 5501,89 VND SABECO's EPS reflects the company's business performance, which means that the earnings per share shareholders can receive is on a downward trend Similar to EPS, Price/Earning ratio also fluctuated in years from 2017 to 2021 The P/E ratio in 2018 reached the highest level at 40,52 times, an increase of 7,57 compared to 2017 Then, it gradually descended to 26,53 in 2020 However, the P/E ratio has tended to rise slightly in 2021, which shows that SABECO's future prospects are well evaluated, so investors are willing to trust and invest ➢ Market-to-book ratio (Unit: VND, Times) 2017 2018 2019 2020 2021 Book value per share 22.487 25.124 31.306 33.083 35.234 Market value per share 227.863 250.807 214.996 189.266 147.740 P/B 10,13 9,98 6,87 5,72 4,19 Table 5.2 Sabeco’s P/B ratio from 2017 to 2021 According to this table, we can see that the market to book ratio of SABECO had a significantly decreasing trend during the period from 2017 to 2021 In 2017, the market-to-book ratio reached 10,13 times Until 2021, this ratio is only 4,19 times, which dropped by 5,94 compared to the beginning of the period The market price of each share tended to decrease while the book value per share rose gradually It caused SABECO's P/B ratio to be on a downward trend over the years b) Comparing to the industry averages ratios and competitors’ ratios: ➢ Earnings per share (EPS) GROUP – Class 46K01.3 25 (Unit: VND) 2017 2018 2019 2020 2021 SABECO 6.915,11 6.189,88 7.476,64 7.132,87 5.501,89 HABECO 2.774 2.281 2.059 2.459 1.299 Average Industry 6.058 5.631 6.613 6.337 4.639 Table 5.3 Compared earning per share (EPS) among SABECO, HABECO and industry from 2017 to 2021 ➢ Price/earning ratio (P/E) (Unit: Times) 2017 2018 2019 2020 2021 SABECO 32,95 40,52 28,76 26,53 26,85 HABECO 45,02 37,63 32,44 27,26 46,06 Average 36 36,4 37 27,9 22,9 Industry Table 5.4 Compared price/earning ratio (P/E) among SABECO, HABECO and industry from 2017 to 2021 GROUP – Class 46K01.3 26 ➢ Market – to – book (P/B) 2017 2018 2019 (Unit: Times) 2020 2021 SABECO 10,13 9,98 6,87 5,72 4,19 HABECO 5,59 3,25 3,14 2,89 2,79 Average 9,31 8,10 5,98 4,99 3,90 Industry Table 5.5 Compared price/earning ratio (P/B) among SABECO, HABECO and industry from 2017 to 2021 ➢ According to the three charts above, we can see that: SABECO's EPS is always to times higher than its competitors The EPS of both SABECO and HABECO fluctuates in line with the general volatility periods in the industry Since 2018, SABECO's EPS has been higher than the industry average It GROUP – Class 46K01.3 27 reached the highest in 2019 with 7476,64 VND/share, higher than the average industry of VND 863,64 and 3,63 times higher than HABECO The P/E of the average industry tends to increase slightly in the first years and gradually decrease in the following years Meanwhile, SABECO's P/E was volatile from 2017 to 2021 It reached the highest level in 2018 at 40,52 times, higher than both HABECO's P/E and the industry average It is not until 2021 that Sabeco's PE shows signs of increasing again Although this figure is still much lower than its competitors, it has surpassed the industry average, which shows potential for growth in the near future Sabeco, HABECO, and the average industry had a remarkable decrease in the market-to-book ratio over the period This index decreased more than times in each surveyed subject We can easily see that SABECO's P/B is always much higher than HABECO's and the average industry's c) Reasons for the tendency of changes in market value ratios: The reasons for the downward trend in EPS and P/E ratio in 2021 are the impact of implementation of Decree No.100/2019/NĐ-CP dated December 30, 2019 which was effective in January, and Decree No 24/2020/NĐ-CP dated February 24, 2020 They launched tighter restrictions on marketing and advertising for beer and imposed heavy penalties for violations of alcohol concentration when participating in traffic Besides, Covid 19 pandemic has also caused many bad consequences for the economy In the period from 2017 to 2021, the indexes of SABECO had fluctuated due to many changes under the activities of the acquisition of Thai Beverage Group The decrease in P/B ratio does not mean that SABECO is not appreciated in terms of future prospects or growth potential In this period, SABECO is in a recovery phase in the business cycle, business results gradually improve, total assets increase, and profits increase, helping to increase book value This is a good opportunity for investors IV Conclusion In conclusion, although standing in front of many macroeconomic challenges in the F&B industry, SABECO is showing a positive result and setting out a promising future for investors The company's capital structure is well-structured, with high liquidity, and sufficient ability to pay the debt This proves that the company's financial independence is increasing, and the company has effectively used fixed assets to generate revenue The company's cash flow in this period experienced a gradual decrease in value, however, it still ensured the distribution of dividends and tackled debt From 2017 to 2019, Vietnam's economy grew fast with increasing GDP, increased per capita income, and increased urbanization Therefore, the Vietnamese beer market was a stable development, attracting interests and investments by international beer companies 2020 was an incredibly tough year for SABECO After struggling with the fake news that SABECO was a Chinese company circulated from late 2019, this event afterward led to a decrease in the company’s budget revenue, reputation and brand In addition, the emergence of Covid 19 and the appearance of Decree 100 in 2020, Decree 16 in 2021 had negative impacts on the EPS and P/E ratios of SABECO These events also limited the company from approaching both domestic and international markets in GROUP – Class 46K01.3 28 this early period As a result, SABECO achieved 2020's revenue of nearly 28.000 billion VND, down 26% compared to 2019 and profit after tax reached more than 4.569 billion VND, down 3,7% compared to 2019 From the data above and reality, SABECO still experienced relatively good economic growth compared to the other F&B companies during the period of 20172021 There are some reasons that SABECO can quickly recover its supply chain through preventing viruses; superiority of the supply chain; exploit the potentials of technology application; dynamic and experienced human resources; efficient working process Growth and profit indicators are expected to increase in the long term V Calcaluted data for SABECO: All data relating financial ratios of SABECO Company; HABECO Company and Average Industry ratios are updated below: Link: https://tinyurl.com/Datacorporatefinance GROUP – Class 46K01.3 29 VI References: Reference link https://www.sabeco.com.vn/en-US/investors/annual-reports https://www.habeco.com.vn/default.aspx?page=shareholder&do=year&category_ id=9b157687-db8c-4579-97b7-5b6a1a3db334 https://mbs.com.vn/media/bisgpi0w/sab hold_initiate-08022021_final.pdf https://finance.vietstock.vn/truy-xuat-du-lieu/bao-cao-tai-chinh-nganh.htm https://simplywall.st/markets/vn/consumerstaples/beverage?fbclid=IwAR3ZXUhveobiXV5EGXKE_GlcVhH9DVMTG5Ki T-01sONjSEoi8BlBItf3Avc GROUP – Class 46K01.3 30 ... Table 2.1 Total debt ratio of SABECO from 2017 to 2021 12 Table 2.2 Debt to equity ratio of SABECO from 2017 to 2021 13 Table 2.3 Equity multiplier of SABECO from 2017 to 2021 13... Chi Minh City, Vietnam - Headquarters 5th Floor, Vincom Center, 72 Le Thanh Ton, Ben Nghe Ward, District 1, Ho Chi Minh City, Vietnam - Email sabeco@ sabeco.com.vn - Website: https://www .sabeco. com.vn... Responsibility: The development of social responsibility is the tradition of SABECO We provide the society safe and useful products, and we always wish to share and take responsibility for social