VIETNAM BEVERAGE INDUSTRY REPORT 2017

Transcription

1 VIETNAM BEVERAGE INDUSTRY REPORT

2 Content Executive summary Risk 90 1 Business environment SWOT analysis Macroeconomic context Competitiveness analysis Legal barriers Business risk Free trade agreements Planning and development 99 2 Industry overview Prospect and prediction Global market Motivational factors Beer Prediction Wine 36 3 Enterprise analysis Soft Drink Profitability Local market Operating capability Beer Financial strength Wine Return on investment Soft Drink 75 4 Appendix 126 2

3 Executive summary The global beverage market has so far been on a positive trend but with lots of unexplored potentials. Vietnam beverage industry came into being years ago but just blossomed for the past decade. The local industry is capable of meeting domestic consumption needs, with less imports and more exports witnessed a sharp downturn in the industry compared to the last year due to production setbacks. As of soft drinks, the industry has expanded on a large scale and rapid growth given adequate domestic supply. 3

4 Executive summary The wine market is on a small scale with falling production. The industry has low debt rate, high liquidity and high asset performance. As estimated, the beer, wine and soft drink segment will revenue 180 billion, 33 billion and 120 billion respectively by There exists a few large-scale and strong - branded enterprises in the industry such as Sabeco, Habeco and Tan Hiep that are capable of competing with FDI enterprises. 4

5 Abbreviation MOF Ministry of Finance GDVC General Department of Vietnam Customs CAGR Compounded Annual Growth Rate GSO General Statistics Office of Vietnam FI Foreign Investment SC Special Consumption EVFTA EU-Vietnam Bilateral Trade Agreement TPP Trans-Pacific Agreement TPP FAO Food and Agriculture Organization of the United Nations UNFPA United Nations Population Fund FDI Foreign Direct Investment UNWTO World Tourism Organization FTA Free Trade Agreements USDA U.S. Department of Agriculture VA Value Added VAT Value Added Tax IWSR International Wine & Spirit Research VBA Association Beer - Alcohol - Beverage Vietnam MFN Most Favoured Nation VIRAC VIRAC Joint Stock Company OIV International Organisation of Vine and Wine WTO World Trade Organization 5

6 Content 1 Business environment 1.1 Macroeconomic context 1.2 Legal barriers 6

7 1. Business environment 1.1 Macroeconomic context GDP growth, Monthly CPI fluctuations, Source: VIRAC, GSO Source: VIRAC, GSO 7

8 1. Business environment 1.1 Macroeconomic context The beverage and tobacco industry are among segments having positive CPI growth in CPI by item group, 2017 Vietnam s Consumer Confidence Index, Q1/ Q1/2017 Source: VIRAC, GSO Vietnamese consumer confidence index fell by 1 point percent to 116 points in the third quarter of the year Source: VIRAC, GSO 8

9 1. Business environment 1.1 Macroeconomic context 2017 s FDI rose sharply to billion dollars, up 47.05% compared to the same period in Billion USD FDI capital, Thousand VND VND/USD exchange rate, In 2017, the USD/VND exchange rate fluctuated around Source: VIRAC, PVN Source: Synthesized by VIRAC, BCG 9

10 1. Business environment 1.1 Macroeconomic context The total im-export value reached billion, up 21% corresponding to billion compared to Billion USD Commodity import export, Billion USD Source: VIRAC, GDVC Beverage industry s shares in GDP, the period Source: VIRAC, GSO 10

11 1. Business environment 1.1 Macroeconomic context Beverage and tobacco sectors CPI compared to the previous month T4/ Beverage consumption is one of the important driving factors behind consumer goods. Source: VIRAC, GSO The young population creates a potential market for the beverage industry. Million people Total population and working - age population structure, Source: VIRAC, GSO 11

12 1. Business environment 1.1 Macroeconomic context The increasing disposable income has stimulated expenditures on beverage stuff. Total disposable income, f Billion USD Source: VIRAC, Economist Intelligence Unit Vietnam s retail sales Source: VIRAC, GSO 12

13 Content I Business environment 1.1 Macroeconomic context 1.2 Legal barriers 13

14 1. Business environment 1.2. Legal framework 14

15 1. Business environment 1.2. Legal framework Legal framework s impact on the industry For state agencies Beverage export output Thousand tons For businesses in the industry Source: VIRAC, GSO 15

16 1. Business environment 1.2. Legal framework Beer manufacturing enterprises Profit margin before tax, Beverage manufacturing growth Unit: % Source: VIRAC, GSO Source: VIRAC, GSO Source: VIRAC, GSO 16

17 1. Business environment 1.2. Legal framework Circulars and decrees of the special consumption tax on alcoholic beverages SCT on alcoholic beverages are subject to the incremental roadmap as indicated in Law No. 70/QH13/2014 and will increase gradually to 65% in 3 years time, starting from January 1st, SCT roadmap applicable to liquor and beer since 2016 Commodity Date Tax rate (%) Source: Synthesized by VIRAC 17

18 1. Business environment 1.2. Legal framework New regulations on liquor imports. 18

19 Content 2. Industry overview 2.1 Global market 2.2 Local market 2.3 Risk 2.4 Planning and development 2.5 Prospect 19

20 2.1 Global market Beer Beer Input material: Malt, Hops Regarding malt Million tons Global barley production and consumption, 10/11-17/18e The UK s barley price developments 1/ Unit: GBP/tonne Source: VIRAC, USDA Source: VIRAC, Indexmundi 20

21 2.1 Global market Beer Market shares of 5 largest barley producers 2017/2018e Barley consumption for malt processing, 10/11-16/17 Million tons Source: VIRAC, USDA Source: VIRAC, International Grains Council 21

22 2.1 Global market Beer The UK s malt price movements, 7/7/ Unit: GBP/tonne Malt production situations in the world and Europe, Million tons Source: VIRAC, Bloomberg Malt export production in the world and Europe, Million tons There is a worldwide decline in malt exports, except for the European region, which is forecast to be on the upward trend given favorable weather conditions in some countries in the region: The UK and Spain. Source: VIRAC, Euromalt, United Nations Trade Statistics 22

23 2.1 Global market Beer Regarding hops Global hops farming and production e Washington s hops price movements $/lb (lb = pound = 0.45 kg) Source: VIRAC, E-Malt.com, the International Hop Growers ' Convention, Source: VIRAC, U.S.D. A National Agricultural Statistics Service Hops production has remained stable but prices hiked up in the period of Market shares of 5 largest Hops producers 2017 Source: VIRAC, E-Malt.com, the International Hop Growers ' Convention, 23

24 2.1 Global market Beer Million tons Hops export situation, Million USD Market shares of 5 world's largest Hops exporters 2016 Source: VIRAC, Euromalt, United Nations Trade Statistics 24

25 2.1 Global market Beer Global beer supply and demand Global production is of large scale with two major hubs, including Asia and Europe. Irregularities due to prolonged droughts blew a huge hit to malt production the main input material. Against this setback, the industry still met the world s consumption needs. Beer output and growth rate of 7 regions 2017e Global beer consumption and production e Billion liter Source: Synthesized by VIRAC Source: Synthesized by VIRAC 25

26 2.1 Global market Beer Million tons Global beer output and exports, Billion USD Top 10 countries having the highest beer im-export value 2016 Countries with highest beer im-export growth rates Source: VIRAC, Euromalt, United Nations Trade Statistics Source: VIRAC, worldsrichestcountries.com 26

27 2.1 Global market Beer The beer market has distinctly divided into two groups: Multinational companies with capital, branding and distribution channel advantages and indigenous manufacturers with a depth understanding of the local demand. Production market shares of 5 world s leading enterprises, 2016 Consumption market shares of 5 world s leading enterprises, 2016 Source: VIRAC, VBA Source: VIRAC, VBA 27

28 2.1 Global market Beer 10 highest-value beer brands, Rank Brand value (million USD) Brand ranking Logo Brand Entity Nation Source: brandirectory.com 1. Bud Light 28

29 2.1 Global market Beer 2. Budweiser 3. Heineken 4. Brahma 5. Skol 6. Asahi 29

30 2.1 Global market Beer 7. Corona Extra 8. Guinness 9. Cyrillic 10. Miller Lite 30

31 2.1 Global market Wine Wine Wine-producing vineyard area, Source: VIRAC, THE OIV Top five European countries with the largest wine vineyard area Top five non- European countries with the largest wine vineyard area Source: VIRAC, THE OIV Source: VIRAC, THE OIV 31

32 2.1 Global market Wine Million tons Grape production in General, e Total vine production by country in 2016 Unit: million Output Source: VIRAC, THE OIV Source: VIRAC, THE OIV 32

33 2.1 Global market Wine Wine production presents lots of discernable fluctuations while the demand for consumption remained relatively stable during Global wine production and consumption, e 100 million litres Source: VIRAC, THE OIV Top five largest wine producers in the world, Market shares of five largest wine producers, Source: VIRAC, THE OIV Source: VIRAC, THE OIV 33

34 2.1 Global market Wine Top 5 largest wine consumers in the world, Top 5 largest wine consumers in the world, 2016 Nation 2015 (billion liters) 2016 (billion liters) Changes during 2016/15 Source: VIRAC, THE OIV Source: VIRAC, THE OIV 34

35 2.1 Global market Wine Wine export value and output e Largest wine exporters Nation Wine export output, (billion liters) Export value (billion EUR) Source: VIRAC, THE OIV Source: VIRAC OIV, GTA Wine exports tend to climb up in value and output with major importers within the EU. 35

36 2.1 Global market Wine Largest wine importers Nation Import output, (billion liters) Import value (billion EUR) Source: VIRAC OIV, GTA 36

37 2.1 Global market Wine 37

38 2.1 Global market Wine Malt wine consumption Billion USD Largest malt wine importers 2016 Source: VIRAC, UN COMTRADE statistics The consumption demand for malt wine is on the rise alongside a slight increase in export values. 38

39 2.1 Global market Wine Most prevalent liquor types in the world 2016 World-class alcohol brands 2016 Rank Chan ge Type of wine Total point Total brand point Brand quantity of top 10 Rank Type of wine Total brand point Change Source: VIRAC, drinkspowerbrands.com Source: VIRAC, drinkspowerbrands.com 39

40 2.1 Global market Wine World s largest wine traders and producers 2015 Rank Change Type of wine Total point Change Total brand point Change Brand quantity of top 10 Change Source: VIRAC, drinkspowerbrands.com World - famous wine exporters 2015 Rank Change Type of wine Total point Change Total brand point Change Brand quantity of top 10 Change - Source: VIRAC, drinkspowerbrands.com 40

41 2.1 Global market Soft Drink The soft drink market has still maintained an intense growth of more than 8 percent with a CARG of 3.08% in the period of Soft dink sales, Unit: billion Thousand tons Soft drink value and output Million USD Source: VIRAC, VBA, Datamonitor Source: VIRAC, Euromonitor 41

42 2.1 Global market Soft Drink Fizzy drinks are still the most preferred but the demand for consumption is shifting to bottled water and fruit juice. Sales of soft drink lines highest-value soft drink brands, Source: VIRAC, VBA Rank Brand value (million USD) Logo Brand Entity Change Brand ranking Source: brandfinance 42

43 2.1 Global market Soft Drink Coca-Cola and Pepsico has taken the lead in the industry, contributing 8 out of 10 largest - value brands. Coca-Cola is dubbed as the most expensive global brand, reaching billion, up 6% compared to Fizzy soft drink supplemental and sports drink Fruit juice Bottled water Source: VIRAC, Bloomberg Intelligent, VBA 43

44 Content 2. Industry overview 2.1 Global market 2.2 Local market 2.3 Risk 2.4 Planning and development 2.5 Prospect 44

45 2.2 Local market The drinks industry has a large scale and high growth potential. Production is gradually meeting the demand, with increasing exports and falling imports. Billion liter Local soft drink production and consumption, Billion VND Thousand tons Local soft drink im-export import, e Source: VIRAC, GDVC Source: VIRAC, UN COMTRADE statistics 45

46 2.2 Local market Segment structure and shifting during recorded no significant change. Beer and soft drinks were still dominant while the wine segment only made up the small share. Production structure by segment Source: VIRAC, GDVC 46

47 2.2 Local market Beer Beer The beer value chain Agriculture Malt Brewing Packaging Agency Consumer Source: Synthesized by VIRAC 47

48 2.2 Local market Beer Input material The beer industry depend its input material on imports, mainly for malt. Malt and hops import Source: VIRAC, Euromalt, United Nations Trade Statistics Million tons Vietnam s major malt export areas, 2016e Thousand kg Malt import situations, Europe Source: VIRAC, Euromalt, United Nations Trade Statistics Source: VIRAC, Euromalt, United Nations Trade Statistics 48

49 2.2 Local market Beer Hops import to Vietnam, e Vietnam s hops supply structure 2016 Thousand kg Source: VIRAC, Euromalt, United Nations Trade Statistics Source: VIRAC, Euromalt, United Nations Trade Statistics 49

50 2.2 Local market Beer Production-consumption The domestic beer industry is in surplus due to production beyond consumption demand. However, there is much space for growth, particularly the high-end beer segment. Billion liter Local beer production and consumption, Thousand billion VND Beer consumption structure, 2017 Source: VIRAC, GSO Source: VIRAC, GSO 50

51 2.2 Local market Beer Inventories Million USD Beer inventories, Source: VIRAC, GSO Beer inventory structure, Source: VIRAC, GSO 51

52 2.2 Local market Beer Internal competition The beer market has a discernable concentration with more than 90% of the value belong to such giant corporations as: Sabeco, Habeco, Heineken, Carlsberg, Tiger. Domestic consumption market shares, 2016 Top 10 Vietnam s beer brands, 2016 Source: VIRAC Source: VIRAC 52

53 2.2 Local market Beer 53

54 2.2 Local market Beer Other beer labels Masan Brewery Sapporo AB InBev 54

55 2.2 Local market Beer Thousand tons Beer import export, Million USD Vietnamese beer is gradually penetrating the world market, with increasing exports and falling imports, which contributes to boosting the production. Source: VIRAC, Euromalt, United Nations Trade Statistics Beer consumption market largest Vietnam 2017e Largest beer suppliers for Vietnam 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC 55

56 2.2 Local market Beer 56

57 2.2 Local market Beer Purchasing method: Payment methods of beer export enterprises 2017 Beer export delivery conditions 2017 Source: VIRAC, GDVC 57

58 2.2 Local market Beer 10 Vietnam s biggest beer exporters 2017e 10 Vietnam s biggest beer importers 2017e Main Vietnam beer import partners, 2017e Source: VIRAC, GDVC Main beer export partners to Vietnam, 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC Source: VIRAC, GDVC 58

59 2.2 Local market Beer Distribution system Beer consumption by distribution channels, Source: VIRAC, Euromonitor End-user beer price structure Source: VIRAC, Euromonitor 59

60 2.2 Local market Wine The wine value chain Regarding wine Agriculture Vine Squeezed grape juice Fermentation Pressing, filtering and smoothing Wine brewing Mixing Packaging Agency Consumer Source: Synthesized by VIRAC 60

61 2.2 Local market Wine Regarding malt wine Agriculture Grapes, cereals, sugar cane Fermentation Distillation Wine brewing Mixing Packaging Agency Consumer Source: Synthesized by VIRAC 61

62 2.2 Local market Wine Input material Rice and other cereals Vine 62

63 2.2 Local market Wine 63

64 2.2 Local market Wine Production-consumption The wine market is on a small scale with falling consumption. Domestic liquor production and consumption e Million litres Source: VIRAC, GDVC 64

65 2.2 Local market Wine Consumer trends shifted from ordinary wines to vine and high-end ones. The local vine market has a great potential for growth while the malt wine segment is gloomy, with a shortage of high-quality products. Billion VND Sales of vine and malt wines Wine inventories, Source: VIRAC, GSO Million litres Source: VIRAC, GSO 65

66 2.2 Local market Wine Internal competition As of the malt wine segment, Halico occupies the largest consumption share with 2 prevalent brands, including Hanoi Vodka and Hanoi New Rice. Malt wine consumption of production enterprises, 2016 Malt wine consumption market share, 2016 Avinaa Source: VIRAC Source: VIRAC 66

67 2.2 Local market Wine The local vine wine market is distinctly and Thang Long wine contributes a large share to the market. In addition, local enterprises produce only lowcost wine lines. Vine wine consumption of production enterprises, 2016 Vine wine consumption market share by output, 2016 Source: VIRAC Source: VIRAC 67

68 2.2 Local market Wine Import export Alcohol import and export e Domestic wine is exported in small and low-value quantities, while high-end imports are worth 30 times higher. Thousand tons Million USD Thousand tons Vine wine import and export e Million USD Source: VIRAC, United Nations Trade Statistics, GDVC Source: VIRAC, United Nations Trade Statistics, GDVC 68

69 2.2 Local market Wine Thousand tons Malt wine import and export e Million USD Source: VIRAC, United Nations Trade Statistics, GDVC Major wine suppliers to Vietnam, 2017e Source: VIRAC, United Nations Trade Statistics, GDVC 69

70 2.2 Local market Wine In 2017, wine imports from Laos also rose sharply to due the fact that glutinous rice wine and white wine with an alcoholic concentration of under 39% are much favored. Vietnam s major wine exports 2017e Source: VIRAC, United Nations Trade Statistics, GDVC 70

71 2.2 Local market Wine Asia has maintained a key malt wine supplier and consumer of Vietnam Vietnam s larges malt wine consumers 2017e Vietnam s larges malt wine suppliers 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC 71

72 2.2 Local market Wine 10 Vietnam s biggest malt wine importers 20107e 10 Vietnam s biggest malt wine exporters 20107e Source: VIRAC, GDVC Source: VIRAC, GDVC Top 10 malt wine exporters to Vietnam 2017e Top 10 Vietnam s malt wine importers 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC 72

73 2.2 Local market Wine Top 10 Vietnam s largest malt wine importing enterprises 2017e Top 10 Vietnam s largest malt wine exporting enterprises 2017e Top 10 largest malt wine exporters to Vietnam 2017e Source: VIRAC, GDVC Top 10 Vietnam s largest malt wine importers 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC Source: VIRAC, GDVC 73

74 2.2 Local market Soft Drink The soft drink industry Pure water/mineral water Mineral water sources Filtration Cooling Bacterial filtration Bottling Consumer Agency Source: Synthesized by VIRAC Fizzy soft drink Synthesized by VIRAC Industrial water Soft drink Cooling CO2 loading Lidding Heat treatment Bottling Agency Consume r Source: Synthesized by VIRAC 74

75 2.2 Local market Soft Drink Fruit juice Agriculture Fruit. Pressing Manual filtration Fruit gel Purifying Crystal filtration Processing Filling Agency Consumer Source: Synthesized by VIRAC 75

76 2.2 Local market Soft Drink Input material Sugar Mineral water Green tea leaves 76

77 2.2 Local market Soft Drink Fruit Flavorings 77

78 2.2 Local market Soft Drink 78

79 2.2 Local market Soft Drink Production - consumption The soft drink market runs on a large scale and high growth rate that gradually meets the local consumption. Billion liter Domestic soft drink production and consumption e Thousand billion VND Source: VIRAC, GSO Soft drink consumption structure (by volume) 2017e Source: VIRAC, GSO 79

80 2.2 Local market Soft Drink Inventories The soft drink market has a high level of inventories compared to beer and wine, increasing sharply in the period of Soft drink inventories Unit: million liters Source: VIRAC, GSO Inventory structure by product lines Source: VIRAC, GSO 80

81 2.2 Local market Soft Drink Internal competition The soft drink market has a high concentration level and great growth potentials which are very much attractive to investors. The domestic enterprises remain weak with inadequate production capacity compared to foreign businesses. Total soft drink enterprises Source: VIRAC, TCKT 81

82 2.2 Local market Soft Drink Vietnam s soft drink market shares, 2016 Soft drink line market shares, 2016 Source: VIRAC Source: VIRAC 82

83 2.2 Local market Soft Drink Import export Exports have exceeded imports but with lower values. Soft drink export and import, e Thousand tons Thousand kg Source: VIRAC, United Nations Trade Statistics, GDVC 83

84 2.2 Local market Soft Drink Fruit juice exports are potential, bringing about high revenue for the country due to abundant raw material sources. Thousand tons Fruit juice export and import, e Thousand kg Soft beverage export and import, e Source: VIRAC, United Nations Trade Statistics, GDVC Thousand tons Thousand kg Source: VIRAC, United Nations Trade Statistics, GDVC 84

85 2.2 Local market Soft Drink The Asia is a main fruit juice consumer and supplier Vietnam. Vietnam s fruit juice consumer structure 2017e Vietnam s fruit juice supplier structure 2017e Source: VIRAC, United Nations Trade Statistics, GDVC Source: VIRAC, United Nations Trade Statistics, GDVC 85

86 2.2 Local market Soft Drink Similar to the fruit juice segment, Vietnam s soft drink also deals with the Asia as a major im-exporter. Vietnam s soft drink consumer structure 2017e Vietnam s soft drink supplier structure 2017e Source: VIRAC, United Nations Trade Statistics Source: VIRAC, Euromalt, United Nations Trade Statistics 86

87 2.2 Local market Soft Drink 10 Vietnam s biggest soft drink importing enterprises 2017e 10 Vietnam s biggest soft drink exporting enterprises 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC Top largest fresh drink exporters Vietnam 2017e Top Vietnam s largest fresh drink importers 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC 87

88 2.2 Local market Soft Drink 10 Vietnam s biggest fruit juice exporting enterprises 2017e 10 Vietnam s biggest fruit juice importing enterprises 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC Top 10 fruit juice exporters to Vietnam 2017e Top 10 fruit juice importers to Vietnam 2017e Source: VIRAC, GDVC Source: VIRAC, GDVC 88

89 Content 2. Industry overview 2.1 Global market 2.2 Local market 2.3 Risk 2.4 Planning and development 2.5 Prospect 89

90 2.3 Risks SWOT analysis Strength: Weakness: Opportunities: Challenges: 90

91 2.3 Risks Competitiveness analysis (5-forces) Customer power Source: Synthesized by VIRAC Source: Synthesized by VIRAC 91

92 2.3 Risks Competitiveness analysis (5-forces) Supplier power Potential competitors Source: Synthesized by VIRAC Nguồn: VIRAC tổng hợp 92

93 2.3 Risks Competitiveness analysis (5-forces) Subsitute product risks Source: Synthesized by VIRAC Internal competition Source: Synthesized by VIRAC 93

94 2.3 Risks Operating risks 3.1 Production risks Input material risks: Food safety risks: 94

95 2.3 Risks Operating risks Production policy risks: Supply chain risks: Consumption policy risks: 95

96 2.3 Risks Operating risks Competitiveness risks: Consumer taste risks: 96

97 2.3 Risks Operating risks Media communication risks: M&A risks: 97

98 Content 2. Industry overview 2.1 Global market 2.2 Local market 2.3 Risk 2.4 Planning and development 2.5 Prospect 98

99 2.4 Planning and development Target Beer Wine Soft Drink Product planning: Source: VIRAC Production area planning and capital investment Region Production capacity by region (million litres) Capital investment (billion VND) Source: VIRAC 99

100 Content 2. Industry overview 2.1 Global market 2.2 Local market 2.3 Risk 2.4 Planning and development 2.5 Prospect 100

101 2.5 Prospect Motivations Population: Income: Lifestyle and consumer habits: 101

102 2.5 Prospect Motivations FTAs positive impacts Other factors 102

103 Content 3 Enterprise analysis 3.1 Profitability 3.2 Operating capability 3.3 Financial strength 3.4 Return on investment 103

104 3. Enterprise analysis List of major beverage enterprises, 2015 List of 13 major beverage enterprises 2016 No. FDI enterprise Net revenue (billion) OWNER S EQUITY (billion VND) State ownership Total assets (billion VND) Source: Synthesized by VIRAC 104

105 Content 3 Enterprise analysis 3.1 Profitability 3.2 Operating capability 3.3 Financial strength 3.4 Return on investment 105

106 3. Enterprise analysis 3.1 Profitability Billion VND Rate of turnover, Source: Synthesized by VIRAC 106

107 3. Enterprise analysis 3.1 Profitability 107

108 3. Enterprise analysis 3.1 Profitability Billion VND Gross profit and gross profit margin, 2016 Source: Synthesized by VIRAC 108

109 Content 3 Enterprise analysis 3.1 Profitability 3.2 Operating capability 3.3 Financial strength 3.4 Return on investment 109

110 3. Enterprise analysis 3.2 Operating capability Turnover of receivables 2016 Corporate inventory turnover 2016 Unit: times Source: Synthesized by VIRAC Source: Synthesized by VIRAC 110

111 3. Enterprise analysis 3.2 Operating capability Asset performance, 2016 Unit: times Source: Synthesized by VIRAC 111

112 Content 3 Enterprise analysis 3.1 Profitability 3.2 Operating capability 3.3 Financial strength 3.4 Return on investment 112

113 3. Enterprise analysis 3.3 Financial strength Tan Hiep Phat and Vang Thang Long have debt/equity as well as debt/total assets many times higher than the industry average. Solvency capacity, 2016 Source: Synthesized by VIRAC 113

114 3. Enterprise analysis 3.3 Financial strength Payment capacity, 2016 Source: Synthesized by VIRAC 114

115 Content 3 Enterprise analysis 3.1 Profitability 3.2 Operating capability 3.3 Financial strength 3.4 Gross profit margin

116 3. Enterprise analysis 3.4 Gross profit margin ROA and ROE Source: Synthesized by VIRAC 116

117 Recommendation Recommended use This report is made Vietnam Industry Research and Consultancy (VIRAC), providing only the industry overview and business analysis. All information, statements and projections are based on reliable sources with ultimate prudence as of the time of writing. However, due to subjective and objective reasons in terms of published formation sources, VIRAC does not guarantee or bear any responsibility for information accuracy and no liability for damages on using this report partly or wholly. All viewpoints and statements in this report are subjected to changes without notice. This publication is protected by copyright owned by Vietnam Industry Research and Consultancy (VIRAC). Copying, modifying and printing without permission are strictly prohibited. Please contact us for more details: VIETNAM INDUSTRY RESEARCH AND CONSULTANCY Floor 6, Anh Minh Building, 36 Hoang Cau Street, O Cho Dua Ward, Dong Da District, Hanoi viracresearch@virac.com.vn Phone:

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