1 th TechcomSecurities June 16 , 2015 Investment Reports
1Y MK Target BVH Industry Dly T/O Foreign Hi/Lo CAP Price BAO VIET $m % HOLDINGS $m 51,103 Buy 26,000 Insurance
0.35 1,171 24% 37,000 29,600 Sell 39,000 16-Jun-15
INVESTMENT PROPOSAL HOLD BVH is one of the biggest insurers in Vietnam. #2 in both life and non-life insurance accounting for 27% and 21% market respectively. Non-life insurance segment faces increasing claim-loss ratio thus reducing profit margins. BVH has been restructuring in order to improve profit margins. They lose market shares in the process. Life insurance segment has enjoyed good annual average growth of 18% in recent years and is expected to continue with the support of its strategic partner, Sumitomo Life. However, its net profit margin is lower than its big foreign peers. BVH is currently trading at FY2015 P/B of 2.0x and P/E of 19.2x which are higher than the industry average.
KEY FINANCIAL DATA
Unit 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 P/E x 25.6 21.0 18.7 22.1 20.0 19.2 17.9 16.0 15.0 13.3 EV/EBITDA x 16.4 17.8 11.3 10.6 8.8 9.5 8.8 7.8 7.0 6.2 P/BV x 2.4 2.2 2.1 2.1 2.1 2.0 1.9 1.9 1.8 1.8 Dvd Yield % 2.7 3.2 3.2 4.1 3.5 4.2 4.5 5.0 5.3 6.0 ROE % 10.2 10.7 11.3 9.4 10.3 10.6 11.0 12.0 12.4 13.5 Net Profit Margin % 15.3 15.0 16.0 10.4 9.8 10.0 9.9 9.9 9.5 9.4 Insurance Reserves/Equity x 1.6 1.5 1.5 1.7 2.2 2.5 2.8 3.1 3.5 3.9 Receivable Days days 41 76 86 53 30 28 28 28 28 28 Inventory Days days 7 7 7 5 5 5 5 5 5 5 Source: BVH, TCBS
2 th TechcomSecurities June 16 , 2015 Investment Reports
INTRODUCTION Bao Viet Holdings (BVH), originally a state-owned company 50 years ago, has now become one of the biggest insurers as well as enterprises in Vietnam. It is the fist company to provide a full range of financial services such as life and non-life insurances, reinsurances, banking, securities, fund management and real-estate. BVH accounts for 21% of non-life insurance market and 27% of life insurance market. The total revenue of the whole group reached VND19,050 billion in 2014 whilst its total assets amounted to VND47,568 billion. BVH listed on HOSE in 2009. HSBC was the first foreign strategic partner before transferring their stake of 18% to Sumitomo Life in December 2012. HISTORY
1996 2005-2007 2012 2014 Sumitomo Life became Bao Viet Bank raised Established the first Life Established Bao Viet strategic shareholder of charter capital to Insurance Company in Fund Bao Viet. VND3,150 billion Vietnam IPO and established Bao Viet Holding Bao Viet Bank raised charter capital to VND3,000 billion
1965 1999 2008-2011 2013 Vietnam Insurance Established Bao Viet Established Bao Viet Bank Bao Viet Non-life Company was Securities Company, the Listed on HOSE insurance and Bao Viet established. first securities company in Bao Viet Holding raised Life Insurance both Vietnam charter capital to VND6,805 raised charter capital to billion VND 2,000 billion
OWNERSHIP
2014 Ministry of Finance still holds 70.9% Sumitomo Life stakes. 18% Sumitomo Life purchased 18% of BVH from HSBC in December 2012 SCIC for $340 million. 3% Market Vector ETF holds 1.87% VND6,805 Market Vector ETF stakes equivalent to 12.7 million billion 2% shares. BVH’s share price as well as Others liquidity are heavily affected when 6% the ETF fund rebalances.
Ministry of Finance 71%
Source: BVH, TCBS
3 th TechcomSecurities June 16 , 2015 Investment Reports
COMPANY STRUCTURE
Bao Viet Fund Bao Viet Insurance Bao Viet Life Insurance Fund management Non-life insurance Data as of 31/12/2014 Life Insurance (unit: VND billion) (unit: VND billion) (unit: VND billion) Cap: 50 | Assets: 65 Cap: 2,000 | Assets: 8,346 Cap: 2,000 | Assets: 30,628 Rev: 52 | Earnings: 12 Rev: 6,510 | Earnings: 251 Rev: 10,765 | Earnings: 590 Assets under management: 20,691
100% 100% 100%
Bao Viet JS Bank Banking (unit: VND billion) 49.52% Cap: 3,150 | Assets: 24,166 Rev: 1,617 | Earnings: 104 BAO VIET HOLDING Core business: Life and Non-life insurance, reinsurance, fund mangement, banking, securities (unit: VND billion) Charter Capital: 6,805 | Total Assets: 47,529 Revenue: 19,050 | Earnings: 1,331
Other associates & JVs
59.92% 55% 60% 51%
Bao Viet Securities JSC Bao Viet Invest JSC Bao Viet Au Lac Ltd. Bao Viet Tokio Marine Ltd. Securities services Office management Education and training Non-life Insurance (unit: VND billion) (unit: VND billion) (unit: VND billion) (unit: VND billion) Cap: 722 | Total Assets:1,884 Cap: 200 | Total Assets: 462 Cap: 60 | Total Assets: Cap: 300 | Total Assets: 1,287 Rev: 305 | Earnings: 132 Rev: 313 | Earnings: 17 Rev: | Earnings: Rev: 222 | Earnings: 57
4 th TechcomSecurities June 16 , 2015 Investment Reports
BUSINESS ANALYSIS
Bao Viet Group Performance Revenue by businesses VND b Revenue grew 11.5% in 2014 and its CAGR is 12.5% over the CAGR = 12.5% 25,000 2009-2014 period. 19,050 In 2014, Life insurance 20,000 17,080 16,007 contributes 56% of the revenue 14,872 15,000 12,896 whilst Non-life insurance accounts 10,562 for 34%. 10,000 The rest (10%) mostly comes 5,000 from banking, and securities activities. -
2009 2010 2011 2012 2013 2014
Non-life Insurance Life Insurance Others
Earnings by businesses VND b In 2014, earnings achieved a CAGR = 5.6% 7.9% yoy growth and CAGR of 3,000 5.6% over the 2009-2014 period. 1,331 However, the earnings growth 2,500 1,431 1,234 rate has fluctuated over the years 2,000 due to unstable profit from non-life 1,203 insurance, banking and securities 1,500 1,012 1,006 activities. 1,000 Life insurance contributes 44% 500 of the group earnings whilst Non- life insurance accounts for only - 19%. This is because life 2009 2010 2011 2012 2013 2014 insurance have higher net profit Non-life Insurance Life Insurance Others margin than non-life insurance.
Earnings from financial activities Source: BVH, TCBS and others (excluding banking activities) was VND444 billion ~ 33.3% total earnings.
5 th TechcomSecurities June 16 , 2015 Investment Reports
Bao Viet Insurance
Non-life Insurance Market share Stable growth rate of around 10% annualy by Gross Premiums in recent years , after a high growth period in 2005-2011. 2014 PVI In 2014, non-life insurance sector grew by 21% Bao Minh 9% 12% in gross premiums from 29 companies. PJICO The sector is forecast to sustain the growth 8% rate of 10-12% in the near future.
VND27,391 PTI Bao Viet had been the market leader in Bao Viet 6% 21% billion non-life insurance sector up until 2014 when PVI surpassed them.
BVH’s gross premiums rose only by 1% Others 35% whereas the other big players had relatively more significant growth ranging from 7% to 17%. Non-life Insurance by Gross Premiums This is because Bao Viet Insurance is restructuring their back-office in order to lower claim loss ratio. This process causes high risk customers being ineligible.
PVI increased their gross premiums by 12% thus keeping their market share at 20.9% whilst Bao Viet’s market share fell from 23% to 20.8% in 2014.
BVH is expected to keep losing market share in the near future due to (i) the restructuring of BVH and (ii) PVI won 60% of the $6 biilion insurance contract from Vietnam Airlines for 2015-2016 period (Bao Viet insurance had 10%).
Bao Viet Non-life Insurance Growth Total revenue annual average growth went VND b down from 9% in 2009-2011 to 4% in 2011- 2014. Moreover, net profit regressed in the last 2 years due to high claim loss ratio. 8,000 6,847 6,398 6,575 6,510 6,563 5,806 Roughly 94% of total revenue is consistently 6,000 from insurance activities, 5-6% is financial income. 4,000 Bao Viet non-life insurance is expected to 2,000 continue struggling to expand their sales in 314 340 297 251 263 281 the near future with growth rates in low range - 2-4%. 2011 2012 2013 2014 2015F 2016F Net profit margin stood at 3.9% in 2014 lower than that of PVI (6.2%) and Bao Minh (5.1%). Their profit margin, however, should Total Revenue Net Profit improve once the restructuring process is in place. Source: AVI, TCBS
6 th TechcomSecurities June 16 , 2015 Investment Reports
Bao Viet Life Insurance
Life Insurance Market shares The Vietnam life insurance sector is still young and full of potential by Gross Premiums considering the total gross premiums 2014 are still less than 2% of GDP. This figure is more than 6.5% for the world and approximately 3% for the Dai-ichi Life emerging markets. 10% Manulife The gross premiums growth rate has 12% AIA ACE Life steadily increased from 15% in 2010 8% 5% Prevoir to 21% in 2014. Hanwha1% Life There are now 17 life insurers with Bao Viet Life VND27,327 Others foreign companies dominating 1% 27% billion 3% market shares. The sector is expected to enjoy 17%-20% growth in the next few Prudential years. 33% Bao Viet Life stepped down from being the largest market share holder to the second largest in 2006 Life Insurance by New Business Premiums and has remained there since. VND b Bao Viet Life (BVL)’s new business 2013 premiums in 2014 was VND2,093 2014 billion growing 31% yoy compared to 26% of whole sector. Prudential still has the highest premiums but struggling to retain market share. The introduction of new players with strong foreign partners such as PVI Sunlife and BIDV Metlife will certainly make the sector more competitive.
Bao Viet Life Insurance Growth BVL has rapidly expanded their life insurance revenue in the last 3 years VND b hitting 17% CAGR. Life insurance activities account for 15,000 14,022 12,067 approximately 74% of total revenue 12,000 10,765 whilst mostly the rest comes from 8,482 financial investments. 9,000 7,322 6,661 BVL’s growth should be in line 6,000 with the sector’s high growth in short-term especially with the 3,000 460 526 529 590 640 715 support of Sumitomo Life. - Net profit margin measured to 5.5% in 2014. BVL’s profit margin 2011 2012 2013 2014 2015F 2016F has slowly declined due to stronger competition as well as lower interest Total Revenue Net Profit rates resulting in lower financial income. This trend is expected to continue. Source: AVI, BVH, TCBS
7 th TechcomSecurities June 16 , 2015 Investment Reports
Bao Viet Bank
Bao Viet Bank Growth Bao Viet Bank (BVB) failed to expand their revenue after VND b a high growth period in 2009- 2011. 2,000 1,684 1,681 1,765 1,515 1,617 BVB also struggled to 1,500 increase profit. Profit margin 1,171 falls gradually over the years. 1,000 This is due to (i) BVB is a small bank with charter capital 500 barely meet the minimum 116 91 106 104 109 114 requirements thus losing the - competitive edges (ii) the banking market is in the 2011 2012 2013 2014 2015F 2016F restructuring process.
Revenue Net Profit
Bao Viet Bank Profitability Both BVB’s ROA and ROE are consistently lower than VND b industry average. 8.9% 30,000 7.7% 9.0% BVB is expected to continue to grow in the next few years but at a lower rate than industry 20,000 6.0% 4.2% average. 3.5% 3.3% 3.0% In 2014, BVB raised charter 10,000 3.0% capital to VND3,150 billion 1.0% 0.9% 0.9% 0.7% 0.6% 0.4% from VND3,000 thus reduced BVH’s stake from 52% to - 0.0% 49.52%. 2009 2010 2011 2012 2013 2014 BVB is no longer consolidated in BVH’s Total Assets ROA ROE financial statements.
Source: BVH, TCBS
Bao Viet Securities
The securities market is HOSE market shares HNX market shares highly competitive with 83 2014 2014 securities houses. Average daily trading value SSI 12.5% SHS 8.4% reached VND5,000 billion, HSC 11.7% SSI 7.6% an 104% increase from VCSC 6.5% HSC 6.7% 2013. VNDS 5.8% BVSC 6.2% BVS has been in Top 10 in ACBS 5.6% VNDS 6.1% terms of brokerage market shares on both HOSE and MBS MBS 4.6% 5.2% HNX in recent years. FPTS 4.2% BSC 4.4% BVSC 3.9% VCSC 4.2% MBKE 3.8% FPTS 4.1% VCBS 3.6% ACBS 4.1%
Source: BVH, TCBS
8 th TechcomSecurities June 16 , 2015 Investment Reports
Bao Viet Securities Growth VND b Revenues mainly come from brokerage activities (36%), margin 344 and interest (41%) and propriety 350 315 306 trading (20%). After 2 years of loss-making in 250 196 209 207 2010 and 2011 due to the 132 136 148 150 financial crisis, BVS has managed 77 86 to turn a profit 3 years in a row. The profit margin is also 50 improving.
(50) The securities market is forecast 2011 2012 2013 2014 2015F 2016F to continue its recovery in 2015 (150) (100) and so is BVS’ revenue and net profit. Revenue Net Profit Source: BVH, TCBS
Bao Viet Fund
Assets Under Management 2014, VND b Assets under management (AUM) are mostly financial 25,000 investments of Bao Viet Life and Bao Viet Insurance. 20,261 20,257 20,691 20,000 17,821 18,070 Revenues go up and down in 16,270 line with AUM. 15,000 In 2014, BVF posted VND52 billion revenue and VND12.4 10,000 billion in net profit.
5,000
- 2009 2010 2011 2012 2013 2014 Source: BVH, TCBS
Bao Viet Invest
Bao Viet Invest Growth Operates in the field of real estate including property VND b investment, trading and management services. 400 313 288 308 Mostly serve Bao Viet Holdings 300 and other companies in the 204 200 167 groups. 114 Low net profit margin 5-8% but 100 11.7 9.2 15.3 17.1 22.6 24.2 good potential for revenue and - profit growth due to capability to serve expanding businesses 2011 2012 2013 2014 2015F 2016F within the group
Revenue Net Profit Source: BVH, TCBS
9 th TechcomSecurities June 16 , 2015 Investment Reports
BUSINESS PROSPECT
Revenue Forecast by businesses VND b Bao Viet Group is expected to sustain its revenue growth over 2015-2019 with 40,000 CAGR = 12% 30% CAGR of 12%. 31,015 25% 27,666 Revenues still mainly come 30,000 24,678 from life insurance and non- 21,983 20% life insurance segments but 19,695 19,050 15% the former will increasingly 20,000 17,080 contribute more. 10% Revenue only grows slightly in 2015 due to Bao Viet Bank 5% 10,000 no longer being consolidated. 0% We assume that the insurance market’s growth will - -5% continue to only slow down 2013 2014 2015F 2016F 2017F 2018F 2019F after 2017. Non-life Insurance Life Insurance Others
Non-life Ins growth Life Ins growth
Earnings Forecast by businesses VND b CAGR = 8% Earnings’ CAGR is forecast at 8% for 2015-2019. 2,000 1,761 20% Bao Viet Non-life’s profit 1,587 margin is assumed to 1,350 1,497 increase gradually after the 1,500 1,331 1,280 10% restructuring. 1,234 Bao Viet Life’s profit margin is 1,000 0% assumed to slowly fall due to stiffened competition as well as falling interest rates lowering financial income. 500 -10%
- -20% 2013 2014 2015F 2016F 2017F 2018F 2019F Non-life Insurance Life Insurance Others
Non-life Ins growth Life Ins growth
Source: BVH, TCBS
10 th TechcomSecurities June 16 , 2015 Investment Reports
FINANCIAL ANALYSIS
Asset components Asset components Due to the nature of 2013 2014 insurance business, BVH assets comprise Total Total ST mostly of cash, short- cash Other cash Other investme 3% term and long-term assets 13% assets nts investments. Fixed 5% 7% 28% Fixed ST assets, receivables and assets investme Fixed inventory are minor. 4% nts assets Reins 20% 4% Loans to customers (Bao assets VND55,665 Reins VND47,568 Viet Bank) were omitted 3% assets from total assets from billion billion ST 2014 resulting in lesser 2% receivabl ST total assets value receivabl es compared to 2013. es LT 2% LT 2% investme Loans Significant reduction in investme nts Loans 0% cash which was invested nts 14% 53% in higher return securities 40% in 2014.
Insurance companies Equity and Liabilities Equity and Liabilities hardly use debts. components components 2013 2014 Insurance reserves hold Owner Owners' a large portion of equity equity equity and liabilities. 22% 26% Minority Insurance reserves Minority equity increased significantly equity 1% due to rising claim-loss 4% Other ratio VND55,665 Other VND47,568 liabilities Deposits (Bao Viet Bank) liabilities 13% billion 10% billion Total were omitted from 2014. Total debts 0% debts Deposits 0% 0% Ins Ins Deposits reserves reserves 21% 43% 60%
Source: BVH, TCBS
11 th TechcomSecurities June 16 , 2015 Investment Reports
Financial Investments Financial Investments BVH invests mainly in 2013 2014 fixed incomes (87%). Bonds Bonds Financial income 49% 45% reached VND3,680 billion in 2014, increased 18% yoy. Equity VND41,159 Equity VND40,681 11% BVH switched to longer 6% billion billion duration securities (5- Others Others 2% 2% 10 year Treasury bonds) given the falling interest rates forecast in 2014. Deposits Deposits 43% 42% Equity portion expanded from 6% to 11% as a Source: BVH, TCBS result of Bao Viet Bank becoming an associate company in 2014.
Liquidity & Solvency
2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F Insurance Reserves/Equity 1.6 1.5 1.5 1.7 2.2 2.5 2.8 3.1 3.5 3.9 Insurance Reserves/Assets 0.4 0.5 0.5 0.4 0.6 0.6 0.7 0.7 0.7 0.7 Leverage Ratio (A/E) 4.1 4.0 3.8 4.2 4.2 4.0 4.3 4.6 5.0 5.4 Current Ratio 2.9 4.0 4.7 4.2 3.4 4.2 4.1 4.7 4.6 5.4 Source: BVH, TCBS
BVH has strong capabilities to meet its short-term obligations with current ratio in 3-4x range. Insurance reserves/equity increases gradually from 2.5 to 3.9 in 2015-2019 as insurance reserves rise proportionally to gross premiums growth. However, insurance reservers/assets remain around 0.6-0.7 as assets expand.
Profitability
2010 2011 2012 2013 2014 2015F 2016F 2017F 2018F 2019F ROE 10% 11% 11% 9% 10% 11% 11% 12% 12% 13% ROA 3% 3% 3% 2% 2% 3% 3% 3% 2% 2% Insurance Profit Margin -7% -2% -8% -7% -10% -7% -7% -8% -8% -8% Net Profit Margin 15% 15% 16% 10% 10% 10% 10% 10% 9% 9% Source: BVH, TCBS
As the norm for the insurance market, insurers’ profit comes from financial activities. Insurance contributes little and even generates losses as in the cases of most insurance companies in Vietnam. This explains the negative insurance profit margin. This figure is expected to remain negative in the future. Net profit margin slowly deteriorates as the insurance market matures.
12 th TechcomSecurities June 16 , 2015 Investment Reports
APPENDIX 1: FINANCIAL STATEMENTS 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 No. Of Shares at YE (m) 626.7 680.5 680.5 680.5 680.5 680.5 680.5 680.5 680.5 680.5 Cum.Adj. Factor 0.9 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 P&L VNDb Net Premiums 6,443 8,000 8,414 10,896 12,783 13,069 14,143 15,900 17,893 20,112 Total direct insurance operating expenses 5,601 6,485 7,156 10,436 12,550 12,568 13,616 15,323 17,298 19,483 Gross Underwriting Profit 842 1,515 1,258 460 233 500 527 577 596 629 Operating Exp. - Selling 143 240 331 373 513 486 525 591 665 747 Operating Exp. - G&A 1,715 2,136 2,442 1,766 1,887 1,752 1,920 2,154 2,419 2,715 Financial Income 3,108 3,196 3,068 3,129 3,680 3,424 3,738 4,246 4,706 5,342 Financial Expenses 1,475 1,728 748 735 823 781 860 998 1,106 1,255 Net Investment Income/Loss 1,632 1,468 2,319 2,395 2,856 2,644 2,878 3,248 3,600 4,087 Other Income 483 614 676 534 277 83 87 91 94 98 Profit from associates and joint ventures 54 61 50 32 148 169 188 209 232 257 Pre Tax Profit B4 XO 1,296 1,521 1,862 1,654 1,627 1,645 1,761 1,971 2,103 2,356 Balance Reserves 6 6 7 7 8 0 0 0 0 0 Income Taxes 285 312 424 413 288 329 352 394 421 471 Net Profit B4 XO & MI 1,006 1,203 1,431 1,234 1,332 1,316 1,409 1,576 1,682 1,885 Minority Interest (PL) 23 2 83 96 73 5 5 6 6 7 Net Profit after Taxes after MI 983 1,201 1,348 1,138 1,259 1,311 1,403 1,571 1,676 1,878 Extraordinary Items 0 0 0 0 0 0 0 0 0 0 Net Profit 983 1,201 1,348 1,138 1,259 1,311 1,403 1,571 1,676 1,878 Unadjusted DPS 1,100 1,200 1,200 1,500 1,300 1,541 1,650 1,847 1,970 2,208 Balance Sheet VNDb Cash and Cash Equivalent 5,845 5,480 4,078 7,318 1,425 1,846 3,800 4,412 5,560 5,753 Short Term Investments 9,039 6,332 9,327 10,996 13,518 14,735 16,061 17,827 20,145 22,764 Accounts Receivables 1,444 1,884 2,074 1,111 1,024 981 1,189 1,250 1,495 1,591 Inventories 117 130 125 163 176 163 204 210 257 269 Investment Receivables 1,515 1,665 2,065 2,495 2,579 2,892 3,146 3,452 3,838 4,290 Reinsurance Assets * 0 0 0 1,284 1,173 1,374 1,488 1,675 1,886 2,122 Other Current Assets 355 156 109 214 514 391 423 476 535 602 Total Current Assets 18,315 15,646 17,778 23,582 20,409 22,383 26,312 29,302 33,717 37,390 Long Term Investments 18,530 19,130 19,283 22,116 25,091 27,081 29,597 32,485 36,254 40,131 Net Fixed Assets 1,938 2,078 1,986 1,948 1,921 1,865 1,813 1,775 1,742 1,721 Other LT Assets 6,008 6,727 7,178 8,020 148 174 188 212 238 268 Total Assets 44,790 43,581 46,225 55,665 47,568 51,504 57,911 63,773 71,951 79,510 Accounts Payable 3,096 2,134 1,889 4,429 4,747 4,128 5,226 4,854 6,077 5,673 Short Term Debt 1,593 862 924 265 4 3 3 3 4 4 Other Current Liabilities 1,537 901 1,000 963 1,329 1,257 1,273 1,431 1,431 1,408 Current Liabilities 6,226 3,897 3,812 5,657 6,080 5,388 6,502 6,288 7,512 7,085 Long Term Debt 81 79 39 49 61 63 64 66 68 71 Insurance Reserves 18,838 19,675 21,046 24,192 28,611 32,903 37,838 43,514 50,041 57,547 Other LT Liabilities 7,598 6,949 7,148 11,552 0 0 0 0 0 0 Total Liabilities 32,743 30,600 32,046 41,450 34,752 38,354 44,404 49,868 57,621 64,702 Minority Interest (Liab.) 1,349 1,316 2,065 2,090 573 573 573 573 573 573 Paid-in Capital 6,267 6,805 6,805 6,805 6,805 6,805 6,805 6,805 6,805 6,805 Capital Surplus 3,077 3,184 3,184 3,184 3,184 3,184 3,184 3,184 3,184 3,184 Mandatory Reserves 79 119 163 204 246 312 382 461 545 639 Retained Earning & Reserves 1,155 1,437 1,842 1,813 1,889 2,156 2,442 2,762 3,103 3,486 Other Shareholder Equity 199 239 282 324 366 431 502 581 665 759 Total Shareholder Equity 10,698 11,666 12,114 12,125 12,243 12,576 12,933 13,332 13,757 14,234 Cash Flow VNDb
Depreciation and Amortization 125 170 188 184 149 170 177 178 190 199 Capital Expenditure (CAPEX) 245 245 97 77 113 115 125 140 158 177 Free Cash Flow 3,970 310 1,438 4,848 2,207 1,142 2,627 1,724 3,090 1,913 EBITDA 2,897 3,419 2,798 2,572 2,599 2,596 2,798 3,146 3,399 3,810
Source: BVH, TCBS
13 th TechcomSecurities June 16 , 2015 Investment Reports
APPENDIX 2
RATIO ANALYSIS Unit 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 # of Shares O/S m 627 680 680 680 680 680 680 680 680 680 P/E x 25.5 20.8 18.6 22.0 19.9 19.1 17.8 15.9 14.9 13.3 EV/EBITDA x 16.4 17.7 11.2 10.6 8.8 9.5 8.7 7.7 7.0 6.1 P/BV x 2.3 2.1 2.1 2.1 2.0 2.0 1.9 1.9 1.8 1.8 P/FCF x 6.3 80.8 17.4 5.2 11.3 21.9 9.5 14.5 8.1 13.1 P/Net Premiums x 3.9 3.1 3.0 2.3 2.0 1.9 1.8 1.6 1.4 1.2 Dvd Yield % 2.8 3.3 3.3 4.1 3.5 4.2 4.5 5.0 5.4 6.0 EPS b4 XO VND 1,444 1,766 1,981 1,672 1,850 1,926 2,062 2,308 2,463 2,760 % Change % 22% 12% -16% 11% 4% 7% 12% 7% 12%
FCF PS VND 5,835 455 2,113 7,124 3,244 1,679 3,860 2,533 4,542 2,812 % Change % -92% 364% 237% -54% -48% 130% -34% 79% -38%
NetPremiumsPS VND 9,468 11,757 12,365 16,012 18,785 19,206 20,785 23,367 26,296 29,557 % Change % 24% 5% 29% 17% 2% 8% 12% 13% 12%
Investment Income/LossPS VND 2,399 2,157 3,409 3,519 4,197 3,885 4,230 4,774 5,291 6,006 % Change % -10% 58% 3% 19% -7% 9% 13% 11% 14%
BVPS VND 15,721 17,143 17,802 17,819 17,993 18,482 19,006 19,592 20,217 20,918 % Change % 9% 4% 0% 1% 3% 3% 3% 3% 3% ROE % 10.2 10.7 11.3 9.4 10.3 10.6 11.0 12.0 12.4 13.4 ROA % 2.5 2.7 3.0 2.2 2.4 2.6 2.6 2.6 2.5 2.5 Insurance Profit Margin % -7.5 -2.3 -8.2 -6.9 -9.7 -7.2 -7.5 -7.7 -8.1 -8.4 Pre tax Margin % 20.1 19.0 22.1 15.2 12.7 12.6 12.5 12.4 11.8 11.7 Net Profit Margin % 15.3 15.0 16.0 10.4 9.8 10.0 9.9 9.9 9.4 9.3 IB Debt/Equity x 0.1 0.1 0.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IB Debt/Assets x 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 IB Debt/EBITDA x 0.6 0.3 0.3 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Insurance Reserves/Equity x 1.6 1.5 1.5 1.7 2.2 2.5 2.8 3.1 3.5 3.9 Insurance Reserves/Assets x 0.4 0.5 0.5 0.4 0.6 0.6 0.7 0.7 0.7 0.7 Leverage Ratio (A/E) x 4.1 4.0 3.8 4.2 4.2 4.0 4.3 4.6 5.0 5.4 Cash/Equity % 54.6 47.0 33.7 60.4 11.6 14.7 29.4 33.1 40.4 40.4 Current Ratio x 2.9 4.0 4.7 4.2 3.4 4.2 4.0 4.7 4.5 5.3 Quick Ratio x 2.9 4.0 4.6 4.1 3.3 4.1 4.0 4.6 4.5 5.2 Cash Ratio x 0.9 1.4 1.1 1.3 0.2 0.3 0.6 0.7 0.7 0.8 Receivable Days days 41 76 86 53 30 28 28 28 28 28 Inventory Days days 7 7 7 5 5 5 5 5 5 5 Payable Days days 132 147 103 110 133 129 125 120 115 110 Cash Conversion Cycle days -84 -64 -10 -52 -98 -96 -92 -87 -82 -77 Net WC Ratio % 27.0 27.0 30.2 32.2 30.1 33.0 34.2 36.1 36.4 38.1 WC Turnover x 0.6 0.7 0.7 0.7 0.8 0.8 0.8 0.7 0.7 0.7 Total Asset Turnover x 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 Fixed Asset Turnover x 3.5 4.0 4.1 5.5 6.6 6.9 7.7 8.9 10.2 11.6
DUPONT ANALYSIS Unit 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Net Income/Pretax Income x 0.8 0.8 0.7 0.7 0.8 0.8 0.8 0.8 0.8 0.8 Pretax Income/EBIT x 0.5 0.5 0.7 0.7 0.7 0.7 0.7 0.7 0.7 0.7 EBIT/Net sales % 43.0 40.6 31.0 21.9 19.2 18.6 18.5 18.7 17.9 18.0 Net Sales/Assets x 0.2 0.2 0.2 0.2 0.2 0.3 0.3 0.3 0.3 0.3 ROA % 2.5 2.7 3.0 2.2 2.4 2.6 2.6 2.6 2.5 2.5 Assets/Equity x 4.1 4.0 3.8 4.2 4.2 4.0 4.3 4.6 5.0 5.4 ROE % 10.2 10.7 11.3 9.4 10.3 10.6 11.0 12.0 12.4 13.4 Source: BVH, TCBS
14 th TechcomSecurities June 16 , 2015 Investment Reports
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