Group 4

Group 1 Group 2 Group 3 Group 4 Group 5 Group 1 Group 2 Group 3

Vinamilk Vietjet Masan VN Airlines SABECO FLC VIS VNG
Industry Diary Airlines Food Airlines Beverage Real estate Steel Games
ROE (average Equity) 10% 32% 19% 14% 34% 4.6% -45% 27.0%
Gearing (=Asset/Equity) 1.4 5 2.19 5.5 1.53 2.7 3.7 1.2
ROA (average Assets) 7% 6% 9% 3% 22% 2% -12% 22%
Profit margin 20% 8% 14.7% 3% 14% 3.4% -6% 22.0%
Assets turnover 0.3 0.776 0.6 0.8 1.6 0.6 1.7 1.0
Current ratio 1.93 0.93 1.85 1.1 1.1 3.6

Portfolio companies: Vinamilk, VietJet Air, Masan, SABECO, VN Airlines, FLC, VIS, VNG.

First of all, we will determine that which ratios the creditors and the investors pay
attention a lot. For creditors, they will care more about how efficient the company works
and the possibility of the interest payment each year, also the principle. Thus, creditors will
want to know the Gearing ratio, Current ratio and ROA (to understand how well the
company using its asset to create profit). And for the investors, they want to know how
much money they can get from their investment in Equity and the condition of the company
in current to be confident that they will not lose their money throughout the ratios: ROE,
Profit margin and also the Asset turnover.
With these conceptions, we can eliminate VIS out of the portfolio, because it does not
earn any profit even it used gearing factor and can take the best asset turnover compared to
the others. Maybe, it has some problems with planning and managing or its’ CEO is not good
enough to predict the market to change the strategy. If VIS can take some actions for the
first quarter of 2019 that have a positive result (just enough to have a Net income larger
than 0, because Gearing * Asset turnover is more than 7 – a potential tool), we as investors
or creditors will be interest to it; but now with that ratios, we will not.
Secondly, we will analyze the Airlines industry – VN Air and VJ Air. The ROE of VJ surprised
me a lot, 32% - second in ROE, even the profit margin and asset turnover are quite low. So,
we can see that it bases on finance leverage too much and a problem is that the Current
ratio is less than 1, which can not cover all the short-term liabilities – a risky company. As
the same result is VN Air – even worse than that. We as a creditor will not lend VN or VJ any
amount because its risk of repayment; and as an investor, maybe VJ is more interesting, but
all the assets can go to the creditors if it faces bankruptcy, so we can not take anything
when that situation occurs.
Now, move to food and beverage industry - an active industry (Vinamilk - Vi, Masan - Ma,
SABECO - Sa), the most different ratios between them are ROE and Asset turnover with the
leader is Sa – the highest in ROE: 34% and Asset turnover: 1.6. We can know that in this
industry, companies have to invest so much on the machine, system and technology, so a
large asset is reasonable. However, with the large assets like that, Sa still gets a very high
Asset turnover compared to not only the companies inside the industry, also others in the
investment portfolio. So, we can understand that it run a good business and create a huge
revenue, which means it take a large market share. In addition, combine with profit margin,
SaCo also make us more surprised because how well of its operation and management. It
can boost its sale, but still take an acceptable profit margin – nearly 15% and these two
ratios are the reason for the highest ROE. That is what an investor will look at, and with a
creditor, he will look at the Gearing – incredible number, just 1.53, and Current ratio – 1.85
– good sight to step in, but we still have a concern about the current ratio. Because the
current assets also include the inventory – a low liquidity component. Thus, rank 1 for Sa as
an investor, but creditor will notice Sa in the book. With Vi and Ma, the same thought as Sa
as a creditor, and as an investor they are in the middle of the portfolio.
The last two companies are VNG and FLC. With FLC, as an investor or a creditor, we do not
have too much attention on it, because of the ratios are just acceptable and stable. Maybe
that what we can see from the Real estate industry right now, a slow development industry
and not the best choice to choose, but it’s safe to put money on it from the side as a
creditor or investor (lower position than Vi or Ma to invest and lend, because the lower ROE
and profit margin, even quite higher Gearing; but still safer to lend than VN and VJ). Now,
let see VNG Co., the third ROE in the portfolio, which depends on the highest profit margin –
22% and a high Equity turnover – by using a good strategy to use asset, Asset turnover = 1.
VNG run its business in a social network industry with a high value in intangible asset and
the base for network  a high in sale – the service it provides. Because it serves service, so
it is easy to understand why the profit margin is high. And that is still not using the financial
leverage to expand its business and market share. So, the creditor will put this company in
the first position, not only by above information, but also the highest in Current ratio –
which can guarantee for the interest payment to creditor. In addition, we also rank VNG in
the second position to invest, because of the development of the industry and the high
value can get from it proved by the interpretation above.

1st 2nd 3rd 4th 5th 6th 7th 8th

Investor SABECO VNG VJ Masan Vina VN FLC VIS
Creditor VNG SABECO Vina Masan FLC VJ VN VIS