Vu Thu Ha_20217470

CARDIFF METROPOLITAN UNIVERSITY

Year 2022 - 2023

Student full name: VU THU HA

Student ID: 20217470

Major: Finance

Module Title: Investment Markets and Principles

Module Number: BAC5014

Words: 3842

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I certify that this assignment is a result of my own work and that all sources have been
acknowledged.

Signed: Vu Thu Ha Date: 22/04/2023

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TABLE OF CONTENTS

GENERAL INTRODUCTION ABOUT HA LONG CANFOCO...........................................................4

Some background information and history of the company...............................................................4

Operations of Ha Long Canfoco from 2021 to 2022.............................................................................5

ANALYSIS OF THE CAPITAL STRUCTURE OF HA LONG CANFOCO IN 2020-2022...............7

Definition of Debt, equity, and capital structure..................................................................................7

Pros and Cons of Debt and Equity.........................................................................................................7

Analysis of Ha Long Canfoco's capital structure in 2020-2022...........................................................8

TWO STOCK EVALUATION METHODS: DIVIDEND DISCOUNT MODEL AND RELATIVE

VALUATION METHOD..........................................................................................................................10

Dividend discount model.......................................................................................................................10

Relative valuation method.....................................................................................................................11

EVALUATE THE SOCK OF HA LONG CANFOCO IN 7 YEARS (2019 – 2025) BY USING THE
DIVIDEND DISCOUNT MODEL AND RELATIVE VALUATION METHOD...............................12

Using the dividend discount model.......................................................................................................12

Using the relative valuation method.....................................................................................................15

CONCLUSION..........................................................................................................................................17

REFERENCES...........................................................................................................................................18

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GENERAL INTRODUCTION ABOUT HA LONG CANFOCO

Some background information and history of the company

Ha Long Canned Food Joint Stock Company (international transaction name is Ha Long
Canfoco) formerly known as Ha Long Canned Food Company (Ha Long Canned Fish Factory)
belongs to Vietnam Seafood Corporation (Duy, 2009). The company's head office is located at
71 Le Lai, May Chai Ward, Ngo Quyen District, Hai Phong City, Vietnam. Established in 1957,
the company has more than 50 years of production and business activities. Currently, the
company is listed on the Hanoi Stock Exchange and has a staff of over 850 people. Famous for
its brand name "Halong Canfoco" in Vietnam, the company specializes in providing delicious,
nutritious, and convenient foods to families across the country.

Owning a charter capital of 50 billion VND, the company focuses mainly on business lines such
as producing canned food products, producing and processing aquatic products, and agricultural
products.

Operations of Ha Long Canfoco from 2021 to 2022

Table 1: The situation of production and business operations of Ha Long Canfoco from 2021 to
2022 (unit: billion VND)

Year Difference between 2021-2022

Items
2021 2022 Absolute %
Net revenue from
sales of goods and 864.1 806.1 (58) (6.7)
rendering of services
Costs of goods sold
680 656.5 (23.5) (3)
and services rendered
Expenses from
9 15 6 67
financial activities
Selling expenses 107 86.5 (20.5) (19)
Net accounting 38.2 20.1 (18.1) (47.38)

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(loss)/profit before tax

Net (loss)/profit after
29.4 16 (13.4) (45.57)
tax
(Source: income statement – vietstock.com)

Thus, net revenue for the whole year of 2022 is about VND 806.1 billion, down by VND 58
billion (accounting for 6.7%) compared to revenue in 2021. Pre-tax profit in 2022 reached VND
20.1 billion, down by VND 18.1 billion (accounting for 47.38%) compared to the pre-tax profit
in 2021. The main cause for this is in 2022, the net revenue from the sale of goods and rendering
of services decreased by 6.7% (mainly exported revenue) compared to the previous year because
bad weather affected shipping activities and the impact of the Russian-Ukrainian war causing
some orders not to be delivered as expected, disruption to the supply of materials, while the
COGS increased by 3%, financial expenses increased by 67% due to increase in loans and
interest rate.

Even though selling expenses decreased by 19% compared with the year 2021 but not enough to
cover the increase in the COGS and financial expenses, therefore, the profit only reached 20.095
billion VND before tax and 16.017 billion VND after tax. More specifically, profit after tax in
2022 was down by VND 13.4 billion compared to profit after tax in 2021 (VND 29.4 billion).

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ANALYSIS OF THE CAPITAL STRUCTURE OF HA LONG CANFOCO IN 2020-2022

Definition of Debt, equity, and capital structure

Capital structure is considered a financial term to describe the source of capital formation of a
business, enabling the business to carry out business activities and assets. Both (Myers, 1984)
and (MasterClass, 2022) have agreed that the capital structure of a business consists of equity
and debt (also known as debt capital, not liabilities).

More specifically, according to (Janet, 2020), equity is understood as the net assets of the
enterprise. It is capital owned by the business owner or contributed by other members, called
shareholders. (Tamplin, 2023) has a pretty straightforward definition of equity, he said that if a
company liquidates its assets, pays off its debts, and distributes the remaining cash to
shareholders, then that money would be "equity". Debt here is debt capital, different from
liabilities (the definition of a liability is broader than that of a debt because liabilities typically
involve more transactions than debt). Debt is money that a business borrows from another party
to pay for major investments or purchases that the company cannot afford. This amount will be
repaid within a certain period of time along with interest (UniTrain, 2020).

Pros and Cons of Debt and Equity

Positive and negative points of debt

(Kane, et al., 1984) confirmed that debt is a perfect "tax shield" for business. If the company uses
borrowed capital, the interest payable on the loan is considered a reasonable expense and is
deducted from the income to be incurred by the corporate tax. Therefore, the company must pay
less income tax than the use case of all-equity financing. In addition, by using loans
appropriately, businesses will speed up development without having to sell part of the company's
equity. That is why debt capital is considered effective financial leverage for businesses.

However, debt becomes risky if businesses overuse it. Lenders will increase borrowing costs
(interest rate) if the business has too much debt and too little equity. On the other hand, debt will
affect the capture of new opportunities for the company and reduce the company's reputation
with partners (Sansing, 2023) because they will not be inclined to do business with businesses
with a lot of risky debt. In the short term, debt can be considered a useful source of capital for the

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company, but at the same time, it will adversely affect long-term cash flow. For example, a
business will have to advance a large amount of money within a certain period to repay the debt.
Deducting large sums of money to pay off debt means that the company loses other investment
opportunities.

Benefits and drawbacks of equity

According to (Keythman, 2019), equity ensures safety and stability for cash flow. A company
with a stable amount of equity can be more proactive in cash flow and under less pressure on
repayment terms. Besides that, equity facilitates the company to carry out business and
production activities for a longer term if the company is facing short-term financial risks.

However, equity is a costly primary measure of growth. The fact that the company has a large
amount of equity makes it difficult to control the business. The reason is that investors all require
a good return. What's more, although equity does not require interest payments, it often has a
larger overall cost than debt capital. Shareholders take on more risk than creditors because they
are the last to get paid if the company goes bankrupt. As a result, equity investors demand a
higher rate of return on their investment.

Analysis of Ha Long Canfoco's capital structure in 2020-2022

The debt/equity ratio is used in this section to analyze Ha Long Canfoco's capital structure. This
coefficient supports investors in determining whether or not to invest in a firm based on its
financial capabilities. If this ratio is low, it indicates that the company's equity is plentiful, it does
not incur much debt, and it generates high profits. On the other hand, if this ratio is too high for
an extended period of time, it indicates that the firm must constantly take out loans to support
commercial operations, resulting in poor profit and debt repayment capabilities.

Table 2: Analysis of Ha Long Canfoco’s capital structure in 2020-2022 (unit: billion VND)

Items 2020 2021 2022

A. Debt 121 159.39 236.27
I. Short-term
borrowing and finance 119.85 158.9 235.9
lease liabilities

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II. Long-term
borrowing and finance 1.14 0.49 0.37
lease liabilities
B. Owners’ equity 129.6 147.8 147.7
Debt
' 0.93 1.08 1.6
Owner s equity
(Source: consolidated balance sheet – finance.vietstock.vn )

In the first 2 years, Ha Long Canfoco's debt/equity ratio was quite balanced when the difference
between debt capital and equity was not too large. But in the 3rd year – 2023, debt/equity ratios
are greater than 1, indicating that Ha Long Canfoco's assets are financed primarily by debt. It
means that this company is on the verge of bankruptcy quite large, debt more than equity
indicates a high level of risk when investing. However, if this ratio is especially low, it partly
indicates that the company is not taking advantage of the loan to expand the business. Therefore,
when evaluating businesses, investors should not rush to ignore businesses with debt/equity > 1
because if businesses know how to take advantage of high borrowed capital to generate profits
and turn profits into capital, the business is still a good investment opportunity.

Table 3: Compare the indexes of Ha Long Canned Food Joint Stock Company (CAN) with the
average indicators of the food manufacturing industry (updated on May 05, 2023)
The industry average of the
CAN
food manufacturing industry
P/E 15.20 15.44
P/B 1.29 2.61
ROE (%) 10.84 11.42
ROA (%) 3.43 6.58
Gross profit margin (%) 18.46 13.88
Total debt/Equity 2.32 1.01
(Source: stockbiz.vn )

Overall, CAN's figures are quite positive compared to the industry average. The profitability
ratios (ROE, ROA) of CAN are not too low compared to the industry average. Although CAN's
ROA is only half the ROA of the industry average, the high ROE ratio (10.84%), which is close

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to the industry average (11.42%), proves that Ha Long Canfoco's management is effectively
using shareholders' capital and has profit potential. The financial structure of CAN is at the same
level as the industry average when the total debt/equity ratio of the industry is 1.01 and CAN is
2.32. CAN's gross profit margin (18.46%) is much higher than the industry average (13.88%),
which proves that Ha Long Canfoco is profitable and controls expenses more effectively than the
industry average. In terms of valuation, CAN's valuation is currently lower than the industry
average. This is evidenced by the company's P/E and P/B ratios.

To judge whether the company's debt/equity is good or not, it is necessary to check other
financial indicators such as ROE or current ratio. According to (Viet, 2022), the ROE of the last
three years (2020, 2021, 2022) of Ha Long Canning Joint Stock Company is 14.51%, 21.21%,
and 10.84% respectively. It can be remarked that ROE growth is not stable. Although the ROE
of this enterprise in 2022 is lower than that of the consumer goods industry (15.4%), in 2 years
2020 - 2021, Ha Long Canfoco's ROE was evaluated positively. The reason is that the company
has taken advantage of the food-hoarding mentality of customers during the COVID-19
pandemic to grow revenue and launch new products. This can be inferred that Ha Long Canfoco
knows how to take advantage of shareholder capital for efficient business operations.

Table 4: Current ratio of Ha Long Canned Food Joint Stock Company (CAN) from 2020 to 2022
(unit: billion VND)

2020 2021 2022

Current asset 331.3 390 433.4
Current liabilities 262.5 302.1 337.4
Current ratio 1.26 1.29 1.28
(Source: consolidated balance sheet –– finance.vietstock.vn )
Besides that, current ratio data is quite positive when the company's current ratio in the last three
years is greater than 1. It shows that the company is able to pay short-term debt when due.

It can be concluded that Ha Long Canfoco is a promising business for investment but is
undervalued. The company is eligible for investors to buy shares.

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TWO STOCK EVALUATION METHODS: DIVIDEND DISCOUNT MODEL AND

RELATIVE VALUATION METHOD

Dividend discount model

According to (Jr., 1985), the dividend discount model (DDM) is a technique for calculating the
price of a stock and discounts future payments to their current value. The dividend growth rate
predicted by the model is identical to the dividend growth rate historically experienced by the
company. (Thakur, 2018) agreed that DDM is calculated by dividing the required and optional
future financial flows of an investment by its present value (P = D1/(RE-G)). Where G is the
dividend growth rate based on previous dividend increases, RE is the cost of equity, and D1 is
the expected dividend for the following year. (Tamplin, 2022) concluded that If P is greater than
the stock’s current trading price, the stock is undervalued. If P is less than the price at which the
stock is currently trading, the stock is overvalued.

(Price, 2022) and (Chen, 2022) both agreed that DDM comes in three different types: the Gordon-
Growth Model is predicated on the premise that dividend growth will persist for a substantial
period of time in the future. The One-Period Dividend Discount Model estimates dividend
discounts for investments with limited time horizons. The Multi-Period Dividend Discount
Model can be used to forecast stock dividends for investors who intend to buy and sell shares at
various phases of the company's growth trajectory.

One of the advantages of the dividend discount model is this model accurately reflects the future
benefits that an investor will receive when investing in a financial asset (D'Amico & Blasis,
2020). Investors can be proactive in calculating stock value. However, this model has the
disadvantage that it cannot be used in cases where the enterprise does not pay cash dividends, or
the dividend policy does not reflect the future profitability of the business. (Xu, 2023) pointed
out that DDM had flaws because it implies that corporations will always pay dividends
regardless of market conditions. Historically dividend-paying companies, such as IBM or those
in the utility sector, benefit the most from this structure. Another disadvantage is that the
predicted stock price is highly dependent on the inputs. Using the same inputs as before (RE =
12%, G = 4%), the anticipated share price increases from $62.5 to $87.5 if the dividend growth
rate increases from 5% to 7%.

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Relative valuation method

Relative valuation, also known as comparative valuation, is a method of appraising enterprises

that compares a company's value to that of other companies in the same industry (Park & Lee,
2003). It is useful to convert prices into ratios of earnings (P/E), book value (P/BV), and sales
(P/S), and then use these ratios to compare similar businesses to determine if they are reasonably
priced relative to the market as a whole. Relative valuation is the opposite of absolute valuation,
which seeks to ascertain the true value of a company. Different from the absolute valuation
model, the relative valuation model compares the company's performance to that of its
competitors and the industry average, rather than discounting the company's expected future cash
flows by a predetermined percentage to determine its value.

(Gottwald, 2012) agreed that the price-to-earnings (P/E) ratio is a well-known relative valuation
multiple. It expresses the relationship between the price of a stock and the earnings per share
(EPS) of the company. A company with a high P/E ratio is overvalued relative to its competitors
because its stock price exceeds its earnings per share. A low P/E ratio indicates that a company's
shares are being sold at a discount to its EPS, indicating that the company is undervalued.

The outstanding advantage of this method is its ease of use. They require fewer assumptions than
the dividend discount model. Moreover, the relative valuation method allows investors to have a
better overview of the market when it deals with the fluctuations between stock prices and
standard values such as market benchmark prices and industry standards (Sharma & Prashar,
2013). However, utilizing a relative evaluation method has certain restrictions. In reality, it may
be challenging to identify businesses that are comparable to one another. Since companies in the
same industry can vary widely in terms of their concentration, size, and nature of operations.
Moreover, (Sharma & Prashar, 2013) also pointed out that, during the bubble, when all prices
were artificially inflated, it would have been difficult to establish a premise for estimating the
company's true value. To avoid the bull pitfall, it is recommended that investors utilize the
dividend discount model, which provides a more accurate depiction of the company's
fundamental value. Last but not least, the relative valuation procedure largely disregards
operational risk and growth rate. This can provide prospective investors with an inaccurate
impression of the business.

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EVALUATE THE SOCK OF HA LONG CANFOCO IN 7 YEARS (2019 – 2025) BY

USING THE DIVIDEND DISCOUNT MODEL AND RELATIVE VALUATION
METHOD

Using the dividend discount model

Table 5: Consolidated income statement of Ha Long Canfoco (source: consolidated income

statement from 2019 to 2022)

2019A 2020A 2021A 2022A 2023F 2024F 2025F

Revenue 574.850.553.578 ₫ 734.343.175.946 ₫ 864.076.855.698 ₫ 806.079.484.385 ₫
COGS 445.264.975.552 ₫ 591.909.411.496 ₫ 679.962.653.943 ₫ 656.447.955.155 ₫
Gross profit 129.585.578.026 ₫ 142.433.764.450 ₫ 184.114.201.755 ₫ 149.631.529.230 ₫
Financial income 1.307.669.623 ₫ 2.229.927.576 ₫ 3.615.674.801 ₫ 7.526.352.035 ₫
Financial expenses 4.146.233.999 ₫ 6.855.076.500 ₫ 9.025.382.828 ₫ 15.139.858.698 ₫
Selling, general & Administrative expenses 114.289.344.777 ₫ 115.635.425.746 ₫ 141.092.575.621 ₫ 120.329.006.593 ₫
Net operating (loss)/profit 12.457.668.873 ₫ 22.173.189.780 37.611.918.107 ₫ 21.689.015.974 ₫
Net other income 2.307.740.156 ₫ 729.929.970 ₫ 610.210.904 ₫ 1.594.033.538 ₫
Net accounting (loss)/profit before tax 14.765.409.029 ₫ 22.903.119.750 ₫ 38.222.129.011 ₫ 20.094.982.436 ₫
Business income tax – current 2.178.542.542 ₫ 4.786.708.915 ₫ 8.803.663.735 ₫ 4.077.769.488 ₫
Net (loss)/profit after tax 12.586.866.487 ₫ 18.116.410.835 ₫ 29.418.465.276 ₫ 16.017.212.948 ₫
Dividend per share 1.000 ₫ 1.800 ₫ 2.500 ₫
Number of share outstanding 5000000 5000000 5000000 5000000 5000000 5000000 5000000

Since Ha Long Canfoco has not announced the dividend payment of 2022, the data of previous
years will be used to predict for 2022 and the following years.

According to (cophieu68, 2023), the beta of CAN is 1.11. (TradingEconomics, 2023) also
pointed out that the Risk-free rate (Rf) of Vietnam is 3.17% and the market risk premium of
Vietnam is 8% (Education, 2023).

The required rate of return = Rf + Beta * market risk premium.

So, required of return of CAN 2023 = 3.17% + 1.11*8% = 12.05%

The first step is to forecast Ha Long Canfoco's revenue in the following years. The essay
assumes that CAN revenue in 2023 will decline by 2.3%. The reason for this assumption is based
on the complicated world situation due to the Russian-Ukrainian conflict, which causes the
monetary policy to be tight according to high-interest rates, causing all kinds of expenses to
increase.

During the outbreak of the pandemic, Ha Long Canfoco was one of the companies in the
industry that was not adversely affected, even though the company's profit increased by 11

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billion VND after 2021. The explanation is that the pandemic's breakout increased people's
desire for canned products significantly. However, after two years - when the epidemic situation
was under control, people's need to hoard food decreased, causing revenue to decrease and
profits to decrease. When costs increase but profits decrease, revenue will decline.

When the difficult situation between Russia and Ukraine is expected to be resolved in 2024-
2025, the globe will be able to totally handle the pandemic, creating an opportunity for the
company's business situation. The revenue of Ha Long Canfoco is expected to rise steadily
because of measures such as releasing new goods, targeting new consumer groups, and
increasing exports.

After predicting Ha Long Canfoco's revenue growth rate in future years based on the average of
actual years, the formula for calculating the revenue of years n = revenue of year n-1 * (1 +
growth rate of revenue in year n).

Table 6: Forecasting the revenue of Ha Long Canfoco in 2019-2025

2019A 2020A 2021A 2022A 2023F 2024F 2025F

Revenue 574.850.553.578 ₫ 734.343.175.946 ₫ 864.076.855.698 ₫ 806.079.484.385 ₫ 787.539.656.244 ₫ 842.667.432.181 ₫ 926.934.175.399 ₫
Growth rate of revenue 27,75% 17,67% -6,71% -2,3% 7% 10%

The second step is to predict Ha Long Canfco's expenses. Collect historical data on expenses.
The average percentage of historical expenses is calculated and combined with the company's
financial statement data to forecast the percentage growth of expenses.

The assumptions of this step are explained as follows: The percentage of COGS is expected to
rise in 2023 before falling slightly in the following two years. The growth of COGS in 2023 is
attributable to an increase in raw material costs. In order to maintain production and business
activities, the company must take out debt. Taking on debt increases the company's debt/equity
ratio while incurring greater interest charges, resulting in a rise in the percentage of financial
expenses in 2023.

In contrast to financial expenses, the proportion of Selling, general & Administrative expenses is
expected to progressively grow over the next three years. As the corporation is in a time of
rigorous cost management, Selling, general & Administrative expenses are predicted to decline
slightly in 2023 compared to the previous year. However, Selling, general & Administrative

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expenses are expected to go up gradually by 1% per year two years later due to the expense of
advertising and customer service in the effort to promote new products.

Business income tax percentages range from 0.4-0.5%

2019A 2020A 2021A 2022A 2023F 2024F 2025F

Revenue 100% 100% 100% 100%
COGS 77,46% 80,60% 78,69% 81,44% 82% 81,6% 80,4%
Gross profit 22,54% 19,40% 21,31% 18,56%
Financial expenses 0,72% 0,93% 1,04% 1,88% 2,4% 1,5% 1,0%
Selling, general & Administrative expenses 19,88% 15,75% 16,33% 14,93% 13,9% 14,1% 15,8%
Net accounting (loss)/profit before tax 2,57% 3,12% 4,42% 2,49%
Business income tax – current 0,38% 0,65% 1,02% 0,51% 0,5% 0,4% 0,4%
Net (loss)/profit after tax 2,19% 2,47% 3,40% 1,99%

To forecast income from 2023 to 2025, expenses, taxes, and gross profit need to be specifically
calculated according to the general formulas listed below:
Gross profit = (1- a percentage of cost of goods sold).
Cost of goods sold each year = revenue each year - gross profit each year.
Selling, general & Administrative expenses = revenue * percentage of Selling, general &
Administrative expenses.
Financial expenses = revenue * percentage of Financial expenses.
Net accounting (loss)/profit before tax = gross profit - total expenses (Financial expenses and
Selling, general & Administrative expenses).
Business income tax = revenue * percentage of business income tax.
Net profit after tax (net income) = net accounting (loss)/profit before tax - business income tax.
2019A 2020A 2021A 2022A 2023F 2024F 2025F
Revenue 574.850.553.578 ₫ 734.343.175.946 ₫ 864.076.855.698 ₫ 806.079.484.385 ₫ 787.539.656.244 ₫ 842.667.432.181 ₫ 926.934.175.399 ₫
COGS 445.264.975.552 ₫ 591.909.411.496 ₫ 679.962.653.943 ₫ 656.447.955.155 ₫ 644.207.438.808 ₫ 687.616.624.660 ₫ 745.255.077.021 ₫
Gross profit 129.585.578.026 ₫ 142.433.764.450 ₫ 184.114.201.755 ₫ 149.631.529.230 ₫ 143.332.217.436 ₫ 155.050.807.521 ₫ 181.679.098.378 ₫
Financial expenses 4.146.233.999 ₫ 6.855.076.500 ₫ 9.025.382.828 ₫ 15.139.858.698 ₫ 18.900.951.749,9 ₫ 12.640.011.482,7 ₫ 9.269.341.754,0 ₫
Selling, general & Administrative expenses 114.289.344.777 ₫ 115.635.425.746 ₫ 141.092.575.621 ₫ 120.329.006.593 ₫ 109.468.012.218 ₫ 118.816.107.938 ₫ 146.455.599.713 ₫
Net accounting (loss)/profit before tax 14.765.409.029 ₫ 22.903.119.750 ₫ 38.222.129.011 ₫ 20.094.982.436 ₫ 14.963.253.468,6 ₫ 23.594.688.101,1 ₫ 25.954.156.911 ₫
Business income tax – current 2.178.542.542 ₫ 4.786.708.915 ₫ 8.803.663.735 ₫ 4.077.769.488 ₫ 3.543.928.453,1 ₫ 3.370.669.728,7 ₫ 3.707.736.701,6 ₫
Net (loss)/profit after tax 12.586.866.487 ₫ 18.116.410.835 ₫ 29.418.465.276 ₫ 16.017.212.948 ₫ 11.419.325.016 ₫ 20.224.018.372 ₫ 22.246.420.210 ₫

Forecasting the dividend payout ratio:

Calculate dividend payout ratio of actual years according to the formula: dividend payout ratio =
total dividend / net (loss) profit after tax.
Calculate the average of dividend payout ratio of actual years.

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Predict dividend payout ratio of future years by using the average dividend payout ratio of actual
years. This essay predicts that Ha Long Canfoco's dividend payout ratio will gradually increase
over three future years.

Calculate the total dividend payout ratio = net (loss)/profit after tax * dividend payout ratio.

Dividend per share = total dividend / number of share outstanding.

2019A 2020A 2021A 2022A 2023F 2024F 2025F

Net (loss)/profit after tax 12.586.866.487 ₫ 18.116.410.835 ₫ 29.418.465.276 ₫ 16.017.212.948 ₫ 11.419.325.016 ₫ 20.224.018.372 ₫ 22.246.420.210 ₫
Number of share outstanding 5000000 5000000 5000000 5000000 5000000 5000000 5000000
Dividend per share 1.000 ₫ 1.800 ₫ 2.500 ₫ 1.368 ₫ 989 ₫ 1.759 ₫ 1.953 ₫
Total dividend 5.000.000.000 ₫ 9.000.000.000 ₫ 12.500.000.000 ₫ 6.839.349.929 ₫ 4.944.567.732 ₫ 8.797.447.992 ₫ 9.766.178.472 ₫
Dividend payout ratio 39,72% 49,68% 42,49% 42,70% 43,30% 43,5% 43,90%

Forecasting the dividend payment:

2019A 2020A 2021A 2022A 2023F 2024F 2025F
Dividend per share 1.000 ₫ 1.800 ₫ 2.500 ₫ 1.368 ₫ 989 ₫ 1.759 ₫ 1.953 ₫
Total dividend 5.000.000.000 ₫ 9.000.000.000 ₫ 12.500.000.000 ₫ 6.839.349.929 ₫ 4.944.567.732 ₫ 8.797.447.992 ₫ 9.766.178.472 ₫
Dividend growth rate 80% 38,89% -45,29% -27,70% 77,92% 11,01%

The growth rate of dividend payment for the whole period = ROE*(1-DPR)
16 billion
ROE of CAN in 2022 = Net profit after tax / Equity = *100 = 10.84
147 ,7 billion
The average of DPR of CAN is 0.44
=> g = 10.84*(1-0.44) = 6.07%
Required rate of return of CAN = 12.05%

So, the stock price in 2025 is =

)( )
1+ 0.0607
1.953∗
( 989
1+0.1205 )(
+
1.739
( 1+ 0.1205 ) 2
+
)( 1.953
( 1+0.1205 ) 3
+
0.1205−0.0607 = 28.295đ
( 1+0.1205 )3

Using the relative valuation method

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 Vu Thu Ha_20217470

Company P/E
FMC 9,23
PAN 10,17
BBC 6,07
BKH 13,45
AAM 7,56
VHC 5,99
CBS 2,64
Average 7,87
(Source: finance.vietstock.vn)
The number of shares outstanding for Ha Long Canfoco is 5000000.

2019A 2020A 2021A 2022A

Net profit after tax 12.586.866.487 ₫ 18.116.410.835 ₫ 29.418.465.276 ₫ 16.103.227.743 ₫
Growth rate 44% 62% -45%
Average growth 20,35%

For quarter data:

Q1-2022 Q2-2022 Q3-2022 Q4-2022
Net profit after tax 6.604.062.432 ₫ 237.090.491 ₫ 7.297.381.397 ₫ 1.964.693.423 ₫
(Source: CAN's financial statements for the quarters of 2022_ finance.vietstock.vn)

Expect that the growth of the net profit after tax in 2023 is 21.5%

The net income in 2023 = 16.103.227.743*(1 + 0.215) = 19.565.421.708đ

Net income
Earnings per share =
Number of shares outstanding

19.565.421 .708
=> The earning per share of CAN = = 3.913đ
5000000

P/E = share price/ Earning per share => Share price = P/E*Earning per share

=> The stock price of CAN in 2023 = 7.87*3.913đ = 30.807đ.

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CONCLUSION

Due to the influence of the complicated world situation, particularly the Russia-Ukraine conflict,
which has adversely affected the global economic situation in general and the business situation
of our country in particular, Ha Long Canfoco's stock price is expected to decrease slightly this
year. However, the stock price will not fluctuate too much because the company has effective
recovery policies.
In Vietnam, the reality that banks raised lending interest rates while the market showed no
indications of rebounding from the effects of the global scenario contributed to the pressure on
securities companies. The amount of money flowing into the stock market will drop, affecting
the stock price.
According to Fire Ant, the current share price on May 10, 2023, is VND 33.30. The essay
predicts that the share price at the end of 2023 will be VND 30,807 and in 2025 the share price
will be VND 28,295, a decrease of VND 2,500 compared to May of the same year and a
decrease of VND 5,000 compared to 2023. As a stockholder, the essay recommends that
investors should sell now to avoid losses.
However, this is the right time for idle investors to buy because based on Ha Long Canfoco's
stable financial indicators, this is a company that is assessed to be able to overcome the crisis.
Surfing investors should choose the right time to invest because the price range is not high
enough to make short-term profits.

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