GENERAL INFORMATION OF THE FIRM

Listed firm’s Name: Mobile World Investment Corporation

Industry: Retail Trade/ Electronics and Appliance Stores/ Computer and Software Stores

Stock exchange: Ho Chi Minh Stock Exchange (HOSE)

Stock ticker: MWG

Research period: 12/11/2018

Name of the issue: (i) Paying dividend in shares

Online Link to the issue’ information disclosure:

http://static2.vietstock.vn/vietstock/2018/11/13/20181113_20181113 - MWG - TB ngay dkcc tra co tuc bang co
phieu.pdf

QUESTIONS (Information in the part “General information of the firm” will be used for following questions)

Question 1.

a. When MWG decided to pay its dividend in shares in November 2018, the issue was done in the primary stock
market, where securities are created and sold for the first time.
Unlike secondary stock market, where investors or trades trade the securities, primary stock market is where
securities are sold the first time by the issuer directly to the investors or organizations. According to Investopedia,
companies sell for their bonds or stocks to the public for the first time in this market, an example of this practice is
IPO (Initial Public Offering). Other types of issue in this market include: right issue (SPR), bonus shares, paying
dividend in shares, private placement, or preferred allotment…. In order to prove that itself is a solid company thus
allowed to be listed on stock exchanges, a company must follow many strict listing regulations provided by the
authority (the listing requirements are different among stock exchanges). Afterwards, those securities would be
traded between investors in the secondary stock market.

b. For primary stock market case, it serves as a tool for a company to raise fund for its activity. A company would
issue bonds or debts to raise the money it needs from the investors or financial organizations. This money will be
used to fund the company future project, to develop its business, to buy machinery or build new buildings. The
money can also be used to pay the company debts.
For secondary market case, company will sometimes buy back their shares from investor in open market. This
happens when company has been profitable in its business or the company board directors think that their company
shares are undervalued, it might decide to invest in itself by buying back its own shares. This is a way that a
company would return the money to the investors, it is good signal since it shows that the company is doing well and
the board director is believing in its business.

(Word limit: 400 words) (20 marks)

Question 2. Based on information you collected, presenting your understandings on following points:

In this case study, as written in the announcement, MWG used common stocks in this issue to pay its
dividend.

- Introduce the conditions for this issue to be approved by the statutory bodies (you must also mention the
current securities law used in your answer)

- Compare the pros and cons of debt issuing and stock issuing from the side of the issuers
 -

(Word limit: 400 words) (20 marks)

Question 3.
Name of the issue: (i) Paying dividend in shares

Purpose of the issue: To pay dividend in shares

Offering ratio: 3:1

Ex-right date: 19/11/2018

Record date: 20/11/2018

Results of the issue:

107,597,146 shares had been distributed.

8,902 shareholders had been distributed the company shares.

All fractional Share, according to the company plan will be cancelled. All share that has been distributed will be
rounded down

Total share in November 23 2018, which was after record date.

Outstanding shares: 430,397,382 shares

Treasury shares: 369,285 shares

Closing price on the trading day prior to the ex-right date: 107,200 (VND) on date: 16/11/2018

P n 1
0=¿107200 VND ; = ; p =0 VND ¿
N 3
Price Dilution Effect of this issue:

n
P0 + ×p
N 107200
P 1= = =80400 VND rounded ¿ 80,4
n 1
1+ 1+
N 3
Q M =P0−P1 =107200−80400=26800
Floor price on ex-right date:

Floor Price=P1 × ( 1−7 % )=80400 × ( 1−7 % )=74722VND rounded ¿74,8

Ceiling price on ex-right date:

Floor Price=P1 × ( 1+ 7 % ) =80400 × ( 1+7 % )=86028 VND rounded ¿ 86,0

 (Word limit: 200 words) (20 marks)

Question 4.

a) Which stock exchange are this firm’s shares listed on? For a single firm, discuss the benefits and drawbacks
of listing shares on stock exchanges compared to not listing.
At the moment of the writing, MWG shares are list on Ho Chi Minh Stock Exchange.
Advantage and Disadvantage of listing shares on stock exchange
Advantage Disadvantage

b) Stock listing conditions of Hanoi Stock Exchange (HNX) vs Ho Chi Minh City Stock Exchange (HOSE)
HNX HOSE
Charter Capital 30 billion VND 120 billion VND

Time Operated ≥ 1 years as joint-stock company ≥ 2 years as joint-stock company

Ownership Structure ≥ 15% of voting shares hold by at ≥ 20% of voting shares hold by at
least 300 investor who are not least 300 investor who are not
major shareholder major shareholder

Performance Last year generating profit The last 2 years generating profit
Latest ROE ≥ 5% Latest ROE ≥ 5%
No accrued lost No accrued lost
No payable debt ≥ 1 year No payable debt ≥ 1 year

(Word limit: 300 words) (20 marks)

Question 5.

a)
Firstly, shark X can look up the information of the firm on websites such as: Vietstock Finance, Vndirect
Overview of the company, Investing.com…. These websites contain information about firm financial
statement, financial ratios, ratings, analysis, and valuation of the company by securities company for
fundamental analysis. They also provide basic technical analysis of the company stock price movement
(Moving average, MACD, …) to be used for market timing.
Secondly, for a wider view of company performance, Shark X could arrange meeting with the company’s
both former and current employees as well as the board directors, so they could give Shark X inner view of
the company. Shark X can also meet up with company provider, and its customer to know more about the
quality of their product. Last but not the least, he can ask company’s competitors for their opinion of the
company.
(Word limit: 150 words) (10 marks)

b)
b.1. What price range could he take into consideration to make a valid BUY order?

Shark X price order must be between the floor price and the ceiling price to be valid
Reference Price=Closing price at 24 June 20 XX=144000 , price spread HOSE=7 %
Floor Price=14400 × ( 1−7 % )=133920 rounded ¿ 133,9
Ceiling Price=14400 × ( 1+7 % )=154080 rounded ¿ 154,1
 b.2. Could he successfully buy the shares if he places an order to buy 1000 shares in the opening session of
25 June 20XX at the price as provided in following box.

Accumulated Buy Sell Accumulated Executable

Buyers Price Sellers
Quantity Quantity Quantity Quantity2 Volumn
A   2000 ATO      
B 3200 1200 147600 1000 6300 G 3200
C 5500 2300 144000 2000 5300 H 5300
X 6500 1000 140700 1300 3300 I 3300
F 8000 1500 138000 2000 2000 K 2000

Trading Volume: 5300. Trading Price: 144000. Buyers: A, B, C

Shark X could not buy 1000 shares in the opening session of 25 June 20XX
(Word limit: 150 words) (10 mark)