Company Hoa Phat Group JSC (HOSE: HPG)

Lê Anh Phan Thị Nguyễn Dương Lê Huỳnh Lê Quang

Name Hùng Thanh Huyền Ngọc Ánh Tuấn Anh Minh

Student ID 2154033039 2154033038 2154033012 2154030015 2154030381

Year 2018 2019 2020 2021 2022
 TABLE OF CONTENTS
CONDUCT FINANCIAL STATEMENT AND CASHFLOW ANALYSIS OF YOUR
CHOSEN COMPANY.............................................................................................................3
1. Financial Report Analysis............................................................................................................3
1.1. Asset Structure:....................................................................................................................3
1.2. Capital Structure..................................................................................................................4
1.3. Business Performance Report Analysis:..............................................................................6
2. Analysis of the financial situation of hoa phat group joint stock company..........................9
2.1. Analysis of Operational Efficiency Ratios..........................................................................9
2.2. Inventory Turnover Ratio....................................................................................................9
2.3. Accounts Receivable Turnover Ratio................................................................................10
2.4. Fixed Asset Turnover Ratio Analysis:...............................................................................11
2.5. Total Asset Turnover Ratio................................................................................................13
2.6. Working Capital Turnover Ratio.......................................................................................14
3. Analysis of financial structure ratios.....................................................................................16
3.1. Overall debt ratio:..............................................................................................................16
3.2. Debt to equity ratio:...........................................................................................................17
3.3. Equity Multiplier Ratio:.....................................................................................................17
3.4. Long-term Debt to Equity Ratio:.......................................................................................18
4. Analysis of Profitability Ratios:..............................................................................................18
4.1. Return on Sales Ratio (ROS):............................................................................................18
4.2. Return on Equity (ROE):...................................................................................................19
4.3. Return on Assets (ROA):...................................................................................................19
5. Analysis of Liquidity Ratios:..................................................................................................20
5.1. Current Ratio:....................................................................................................................20
5.2. Quick Ratio:.......................................................................................................................20
5.3. Immediate Liquidity Ratio:................................................................................................21
6. CASH FLOW ANALYSIS (based on financial statements and cash flow statements from
2018-2022).........................................................................................................................................22
6.1. Cash flow from operating activities:..................................................................................22
6.2. Cash flow from investment activities:...............................................................................22
6.3. Cash flow from financing activities:..................................................................................23
7. Financial situation analysis of the company..........................................................................23
COMPARE YOUR COMPANY WITH KEY COMPETITORS IN THE INDUSTRY
AND DETERMINE THE POSITION YOUR COMPANY IN THE INDUSTRY..........25

1
CONDUCT FINANCIAL STATEMENT AND CASHFLOW ANALYSIS
OF YOUR CHOSEN COMPANY
1. Financial Report Analysis
1.1. Asset Structure:

- In 2018: The scale of assets saw significant growth, particularly focusing on long-
term assets. Long-term assets reached 52,914 billion VND at the end of 2018,
indicating that the Corporation has been heavily investing in long-term assets. The
Hoa Phat Dung Quat Integrated Steel Complex project, with a total investment of
52,000 billion VND, of which fixed capital investment is 40,000 billion VND, has
entered its formation and completion phase, which has significantly increased the
value of long-term assets. The asset structure also underwent a change, with short-
term assets accounting for only 32% of total assets as of 31/12/2018, while the
remaining 68% were long-term assets.
- In 2019: The total assets of the Corporation experienced a robust growth in 2019,
increasing by 30% compared to 2018. Of this, long-term assets continued to account
for a significant portion, with an addition of 18,425 billion VND, reaching a total of
71,339 billion VND. This indicates that the Corporation continued to focus on
investing in fixed assets, a strategy initiated in 2018. Despite the substantial increase
in long-term assets, the asset structure compared to 2018 remained consistent, and this
also reflects a notable growth in short-term assets, with an increase of 5,128 billion
VND. By the end of 2019, short-term assets represented nearly 30% of the asset
structure, while long-term assets accounted for 70%. The overall asset scale doubled
in just two years (from 2017, the starting point of investment in the Hoa Phat
Integrated Steel Complex project in Dung Quat). This remains a typical and suitable
asset structure for the manufacturing industry.
- In 2020: The total assets of the Corporation grew by nearly 30% compared to 2019.
Among this, long-term assets still dominated with an increase of 3,425 billion VND,
reaching 74,764 billion VND. In 2020, short-term assets surged to 26,310 billion
VND, representing an 86% increase compared to the same period in 2019. This sharp
increase is attributed to the boost in working capital, enhancing the production scale.
By the end of 2020, the asset structure gradually balanced with short-term assets
accounting for 43% and long-term assets accounting for 57%, since the
commencement of the Hoa Phat Integrated Steel Complex project in Dung Quat. This

2
remains a suitable and characteristic asset structure of the industrial manufacturing
sector.
- In 2021: The total assets of the Corporation experienced robust growth, increasing
by nearly 36% compared to 2020. Within this, long-term assets continued to account
for a significant portion, increasing by 9,318 billion VND and reaching 84,082 billion
VND. This shows that the Corporation's investment process in fixed assets continued
to be recognized as assets were added when major projects were completed. 2021
recorded a significant increase in short-term assets to 37,408 billion VND,
corresponding to a 66% increase compared to the same period in 2020. This sharp rise
was to supplement working capital to initiate an efficient production scale derived
from business activities without taking into account corporate income tax, interest
expenses, and a sudden increase in depreciation compared to the previous year. By the
end of 2021, the asset structure had shifted to a balanced position, with short-term
assets accounting for 53% and long-term assets representing 47%. The overall asset
scale tripled in just 4 years (from 2017, the time when the investment in the
construction of the Hoa Phat Integrated Steel Complex project in Dung Quat began).
This remains a suitable and typical asset structure for the industrial manufacturing
sector.
- In 2022, the total assets of the Corporation decreased by 4% compared to 2021.
Long-term assets still accounted for a significant portion, reaching 89,821 billion
VND. This reveals that the Corporation's investment process in fixed assets continued
to be recognized as assets were added for major projects such as the Hoa Phat Dung
Quat 2 Integrated Steel Complex, the Container Manufacturing Plant, and the Home
Appliances Factory. In 2022, the decline of short-term assets reached 13,640 billion
VND, representing a 14% decrease compared to the same period in 2021. This
decrease primarily resulted from the reduction in inventory value, declining by 18%
compared to the end of 2021. By the end of 2022, the asset structure balanced out
again, with short-term assets accounting for 47% and long-term assets representing
53%.
In general, the overarching trend in the asset structure of Hoa Phat Group over the past
5 years demonstrates the company's development and growth, with a focus on long-
term assets, balanced asset structure, and major investment projects aimed at
expanding the production scale.
1.2. Capital Structure

3
- In 2018: The Owner's Equity increased by 8,225 billion VND, corresponding to a
25% increase, with a significant portion of this rise coming from the year's profits.
This provided the Group with flexible cash flow for its business operations. The debt-
to-equity ratio was tightly managed and consistently kept below 1. The debt-to-equity
ratio as of 31/12/2018 was 0.6 times, which is very low compared to other enterprises.
- In 2019: The Group maintained stability in 2019. The Owner's Equity rose by 18%,
moving from 40,623 billion VND to 47,787 billion VND, primarily due to the profits
earned during the year. Although the leverage ratio over Owner's Equity exceeded 1,
the bank loan to equity ratio remained at 0.77 times. 2019 was a pivotal year marking
strong advancements in the investment into the Dung Quat Steel Project (KLH Thép
Dung Quất). As a result, this was also the year with the highest bank borrowings ever.
However, debt management and control were executed securely, positioning the
Group for vigorous future growth. Cash flow from business operations grew steadily
and was maintained at a safe level. The liquidity ratio at the end of 2019 rose to 1.13
times, better than the same period in 2018. This ratio, consistently above 1, indicates
the Group's reliable and steady capability to meet its short-term obligations.
- In 2020: The financial structure of the Group remained stable. Owner's Equity
increased by 24%, rising from 47,787 billion VND to 59,220 billion VND. While the
leverage ratio over Owner's Equity increased above 1, the bank loan to equity ratio
was 0.91 times, coinciding with the initiation of operations at the Hoa Phat Dung Quat
Steel Complex. Additionally, the Net Bank Loan to Owner's Equity expenditure
currently stands at a relatively low average regarding financial leverage utilization.
Yet, it is managed at a safe level, positioning the Group for significant momentum in
the near future. The net cash flow from business operations began to grow more
significantly, indicating the improving financial health of Hoa Phat.
- In 2021: The financial structure of the Corporation was maintained at a stable level.
The owner's equity increased by 53%, from VND 59,220 billion to VND 90,780
billion, sourced from the profit generated during the year. The debt-to-equity ratio fell
below 1, the bank loan-to-equity ratio decreased to 0.63 times, and the net debt-to-
equity ratio dropped to 0.18 times. The safe debt ratio indicates the Corporation's
financial independence and stability. 2021 marked the commencement of

4
synchronized operations of the Hoa Phat Dung Quat Steel Mill, producing quality
products. 3 million tons of HRC steel were officially rolled out to meet domestic and
export market demands. Net cash flow from business operations continued to increase,
up by 1.37 times compared to the same period of the previous year.
- In 2022, the financial structure of the Corporation remained stable. The owner's
equity increased by 6%, from VND 90,781 billion to VND 96,113 billion. The debt-
to-equity ratio remained below 1, and the bank loan-to-equity ratio reduced to 0.6
times. This showcases the Corporation's financial independence and stability. In 2022,
amidst challenges, Hoa Phat had to cut steel production capacity to reduce high-priced
finished goods inventory, aligning with market consumption. Net cash flow from
business operations decreased by 54% compared to 2021, yet the liquidity was still
secured.
Overall, the capital structure has been stably maintained over the years, indicating that
the Corporation follows a prudent financial policy and strict management. Debt levels
are reasonably controlled to minimize pressure and ensure the smooth operation of the
system.
1.3. Business Performance Report Analysis:
In the current business landscape, analyzing and evaluating operational effectiveness
is crucial for all enterprises. Business performance reports provide essential
information regarding a company's profitability and financial status. By analyzing
metrics in the business performance reports, such as revenue, expenses, and profits,
managers can gauge the effectiveness of production and business activities during the
reporting period.

Revenue:

5
Hoa Phat's revenue growth rate from 2018 to 2021 has been impressive, with a
compound annual growth rate (CAGR) of nearly 30% per year. Notably, in 2021, the
revenue reached its peak at VND 149,679 billion, an increase of almost 65%
compared to 2020.
This robust growth was driven by high domestic steel demand and Hoa Phat's strategy
to expand export markets. The company diversified its consumer markets, boosted
exports, and secured a significant domestic market share.
However, in 2022, revenue sharply decreased to VND 141,409 billion, dropping by
more than 5% compared to the previous year. The primary reason for this decline was
the decreased steel demand amid challenging global economic conditions, which
adversely affected Hoa Phat's business operations.
Overall, Hoa Phat's revenue maintained healthy growth from 2018 to 2021, thanks to
market demand and the company's expansion strategy. The revenue downturn in 2022
is understandable given the broader economic challenges.
Cost:
a) Cost of Goods Sold (COGS)
The average revenue growth rate from 2018 to 2021 is 32%, indicating that Hoa Phat
has experienced robust growth in both sales and volume. The COGS has consistently
increased over the years, reflecting rising input material costs. The growth rate of
COGS (CAGR 25%) is lower than the revenue growth rate, suggesting that Hoa Phat
has good cost control capabilities.
However, the gross profit margin decreased from 21% in 2018 to 12% in 2022. The
reason is that the cost rose quickly while revenue did not increase proportionally. This
indicates that competitive pressures and high input costs are impacting Hoa Phat's
gross profit margin.
Overall, Hoa Phat's cost situation has been well-controlled over the years due to
effective management, but the gross profit margin tends to decrease due to rising input
costs.
b) Administrative Expenses
Hoa Phat's total administrative expenses have been rising steadily over the years, with
an average growth rate of around 29% per annum. However, in 2021 and 2022, the
group's administrative costs surged to VND 1,324 billion and VND 1,019 billion,
respectively.
The primary reason for the increase in administrative expenses is Hoa Phat's
expansion of its production and business scale over the past five years. Costs related
to personnel, office operations, management systems, etc., have grown along with the
scale of operations. Additionally, macro factors such as the Covid-19 pandemic,

6
exchange rate fluctuations, and rising input material costs have also impacted the
company's administrative expenses to some extent.
However, the proportion of administrative expenses relative to revenue has been
decreasing, from 0.8% in 2018 to 0.7% in 2022. This suggests that Hoa Phat has
effectively controlled administrative costs as the revenue scale has expanded.
c) Financial Charges
Hoa Phat's total financial costs trended sharply upwards from 2018-2022, rising from
772 billion VND to 7,026 billion VND. The average annual growth rate is about 85%.
Interest expenses constitute a significant portion of the financial costs. Interest costs
increased from 539 billion VND in 2018 to 3,083 billion VND in 2022, a fivefold
increase.
The primary reason for this surge in financial costs is Hoa Phat's rapid increase in
short-term debt during this period, to fund its business expansion.
However, when compared to the scale of revenue, the proportion of financial costs to
revenue remains low, fluctuating between 3-5% over the years. This indicates that
Hoa Phat has effectively managed its financial expenses. Moreover, with the operation
of the Dung Quat Complex, it's understandable that Hoa Phat's debt ratio is increasing.
Nonetheless, the financial leverage remains within a safe range.
Overall, Hoa Phat's rising financial costs are justifiable in the context of the
company's business expansion. The low costs relative to revenue demonstrate the
company's healthy financial capability.
Profit:
a) Net profit from business activities:
Hoa Phat's net profit from business activities showed a positive trend from 2018-2021,
rising from 10,072 billion VND to a peak of 37,008 billion VND in 2021. However, in
2022, the net business profit sharply dropped to 9,794 billion VND, the lowest since
2019.
The main reasons for this decline are the decrease in gross profit (due to rising raw
material prices) and the sharp increase in financial expenses (due to rising interest
rates and outstanding loans). Meanwhile, Hoa Phat managed to maintain its
administrative expenses and selling costs at a low level.
This indicates that the core business activities remain effective, but the profit is
significantly affected by macro factors and financial expenses.
b) Total pre-tax profit:
Hoa Phat's total pre-tax profit from 2018-2021 also increased, from 10,071 billion
VND in 2018 to a peak of 37,056 billion VND in 2021. However, in 2022, the pre-tax
profit sharply decreased to 9,922 billion VND, the lowest since 2019. This trend

7
aligns with the fluctuations in net profit from business activities, indicating that the
core business activities dominate Hoa Phat's profit structure.
Financial revenue and other activities hold a minor share in the revenue structure and
do not significantly impact the profit. The sharp decline in 2022's profit was mainly
due to the high raw material input prices, which narrowed both the gross profit and the
operational profit.
c) Post-tax profit:
Hoa Phat's post-tax profit also showed a strong growth trend from 2018-2021,
increasing from 8,600 billion VND to a peak of 34,520 billion VND in 2021.
However, 2022 witnessed a significant decline in post-tax profit, dropping to 8,444
billion VND, the lowest since 2019. The primary reason is the decline in pre-tax
profit, which subsequently affected the post-tax profit.
Hoa Phat's corporate income tax rate remains stable at 15-18% over the years. This
reflects a reasonable tax rate, contributing to the post-tax profit of the company.
In summary, Hoa Phat's post-tax profit trajectory is significantly influenced by the
changing trend of its pre-tax profit. The decline in 2022 underscores the considerable
risks from macro factors. In a challenging market environment where peer companies
reported significant losses throughout 2022, the profit margin indicates Hoa Phat's
efforts in cost management and advantages from its integrated production scale and
processes.
2. Analysis of the financial situation of hoa phat group joint stock
company
2.1. Analysis of Operational Efficiency Ratios
Operational efficiency ratios play an indispensable role in analyzing the performance
of a business. These ratios allow for the evaluation of the effective utilization of
resources, management competency of the leadership team, and the business's
operational trend over time. Analyzing operational efficiency ratios provides a
comprehensive assessment of business operations and is crucial in the financial
analysis of the enterprise.
2.2. Inventory Turnover Ratio
The inventory turnover ratio reflects the company's ability to manage and effectively
utilize its inventory. This metric measures the frequency at which average inventory is
sold during a period. Observate below:
Cost of goods sold
Inventory turnover ratio = Average inventory value

8
Comments:

Hoa Phat Group's inventory turnover ratio has been on a declining trend over the past 5
years. Specifically, the ratio decreased from 3.42 times in 2018 to 3.12 times in 2020. In
2021, the ratio slightly increased to 3.17 times and further rose in 2022, reaching 3.25
times.

The decrease in the inventory turnover ratio between 2018-2020 indicates that Hoa Phat's
sales pace slowed down compared to the growth of its inventory. The reason is that
during this period, steel exports faced challenges as major importing markets like the US
and EU implemented restrictive measures, causing Hoa Phat's export volume to
significantly drop compared to the same period the previous year. Concurrently,
difficulties in steel exports, due to restrictive measures from key importing markets such
as the US and EU, led to a substantial reduction in Hoa Phat's export volume compared to
the previous year. As a result, Hoa Phat's inventory turnover rate slowed down due to the
decrease in export volume and domestic consumption. To sustain operations, Hoa Phat
had to stockpile more goods, leading to a decrease in the inventory turnover ratio during
this period.

As the global economy began to stabilize, the inventory turnover ratio rebounded in 2021
and 2022, indicating a gradual recovery in the company's business operations. The
company was able to sell more from its inventory than what was stocked, reflecting
positive market demand. However, the 2022 inventory turnover ratio is still lower than
that of 2018, indicating that Hoa Phat needs to improve its inventory turnover rate in the
future to enhance operational efficiency.
2.3. Accounts Receivable Turnover Ratio
The accounts receivable turnover ratio reflects the company's ability to collect debts from
customers. A higher ratio indicates that the company can collect its receivables quickly.
However, an excessively high ratio could negatively impact sales potential, as a shorter
collection period might make sales terms less attractive to customers.
9
 Net revenue
Accounts receivable turnover ratio= Average receivables

Comments on Accounts Receivable Turnover Ratio:

● The accounts receivable turnover ratio trended upwards from 2018-2021,
suggesting that Hòa Phát has been collecting receivables at an increasingly
faster rate. However, the ratio saw a significant drop in 2022, reaching 16.11
times compared to 21.71 times in 2021.
● The decline could be attributed to economic difficulties, with customers
experiencing payment challenges or delaying payments compared to previous
periods. Notably, the complex evolution of the COVID-19 pandemic has
severely impacted business operations.
● Some major projects and constructions were interrupted or prolonged due to
the pandemic, leading to delays in investors' payments. As a result, Hòa Phát's
receivables from sales and services have increased.
● Hòa Phát might have expanded credit to customers to stimulate demand amid a
bleak market situation. However, this poses the risk of delayed capital
recovery. Concurrently, the growth in Hòa Phát's revenue slowed in 2022,
resulting in a reduction of the accounts receivable turnover ratio.
● In conclusion, the decreased accounts receivable turnover ratio reflects some of
the challenges in Hòa Phát's business operations and the overall economic
situation. Yet, over the past 5 years, Hòa Phát has consistently maintained a
high accounts receivable turnover ratio, far exceeding the industry's average,
demonstrating its effective debt management and commendable debt recovery
capabilities.
2.4. Fixed Asset Turnover Ratio Analysis:
The fixed asset turnover ratio measures the efficiency of a company's use of its fixed
assets in generating sales.

10
This ratio indicates how much revenue each dollar of fixed assets produces. A higher
fixed asset turnover ratio indicates effective use of fixed assets for revenue generation.

Net revenue
Fixed asset turnover ratio= ¿ asset value

Comments:
In 2018, Hòa Phát's fixed asset turnover ratio was 4.30 times. This indicates that for
that year, Hòa Phát's fixed assets turned over 4.30 times, or in other words, every
dollar in fixed assets generated 4.30 dollars in revenue. This high ratio reflects
efficient utilization of fixed assets. The reason might be due to Hòa Phát's significant
investments and expansion in high-growth potential products like galvanized steel,
steel pipes, and construction steel.
The ratio decreased to 2.89 times in 2019 and 1.86 times in 2020. Despite remaining
at a high level, the decline compared to the previous year indicates a diminished
efficiency in utilizing fixed assets. Between 2018-2020, Hòa Phát made several
investment moves like large-sized steel pipe production lines and product
diversification such as colored galvanized sheets and hot-rolled steel coils. However,
the impact of COVID-19 resulted in a market demand slump, and while Hòa Phát
continued its expansion, assets grew faster than revenues. This resulted in a rapid
increase in fixed assets, but revenues and production volume didn't immediately
correlate.
The ratio slightly improved to 2.22 times in 2021 and 2.02 times in 2022. This
positive sign indicates that Hòa Phát's business operations are recovering post-
pandemic. Previously invested projects began to operate steadily and became more
efficient. Overall, in the last 5 years, Hòa Phát has consistently maintained a high
fixed asset turnover ratio, reflecting its operational efficiency and profitability from its
fixed assets.
2.5. Total Asset Turnover Ratio

11
The total asset turnover ratio reflects the efficiency with which a company utilizes its
total assets in its business operations. This ratio indicates the profit generated from the
total assets, specifically, how much revenue is generated for every unit of investment
in the total assets. A higher total asset turnover ratio indicates better efficiency in
using the total assets.
Net revenue
Total asset turnover ratio= Total average assets

Comments:
From 2018 to 2022, Hoa Phat's total assets grew significantly, from 78,223 billion
VND in 2018 to 170,335 billion VND in 2022. This reflects Hoa Phat's expansionary
investment strategy during this period. Specifically, in Q3/2018, Hoa Phat continued
to invest in expanding the production of large-diameter steel pipes at the Hung Yen
plant; in September 2021, the Group decided to establish Hoa Phat Home Appliances
Corporation, operating in investment, production, and sale of electrical and household
appliances.
However, the growth rate of net revenue did not keep up, only increasing from 55,836
billion VND to 90,118 billion VND between 2018-2020. As a result, the asset
turnover ratio decreased from 0.85 rounds to 0.77 rounds during this period.
In 2021-2022, due to strong consumption growth, net revenue increased to 149,679
billion VND and 141,409 billion VND respectively, pushing the asset turnover ratio to
soar to 0.97 rounds and 0.81 rounds.
Overall, during the period 2018-2022, Hoa Phat's total asset turnover ratio showed a
gradual increasing trend over the years, indicating improving operational efficiency.
However, this ratio is still lower than the industry average (about 1 round/year). The
Group needs to focus on enhancing the efficiency of using total assets in the future.

12
 2.6. Working Capital Turnover Ratio
The working capital turnover ratio reflects a company's ability to generate profit from
its normal business operations. It is a crucial metric for evaluating the liquidity and
efficiency of a company's use of working capital.
Net revenue
Working capital turnover ratio= Average working capital

Comments:
In 2018, Hoa Phat's working capital turnover ratio was 6.48 times. This number
indicates that in that year, Hoa Phat's average working capital turned over 6.48 times
or in other words, every unit of average working capital generated 6.48 units of
revenue. This is a relatively low ratio, indicating that the efficiency of using working
capital is not high.
The ratio dramatically increased to 20.79 times in 2019 and 21.91 times in 2020. This
indicates that Hoa Phat significantly improved its efficiency in using working capital,
with each unit of working capital generating three times more revenue than in 2018.
However, in 2021, the ratio dropped to 11.75 times and continued to decline sharply
to 7.28 times in 2022. This steep decline compared to 2019-2020 suggests issues
regarding the efficiency of using working capital are worsening at Hoa Phat.
According to Hoa Phat's financial report in 2022, the reasons for the sharp decline are:
● Short-term total assets increased by 17% compared to 2021, while net revenue
only grew by 9%. This indicates that the growth rate of short-term assets is
faster than the growth rate of revenue, leading to a decrease in the working
capital turnover ratio.
● Inventory rose sharply by 58% compared to the same period due to the high
cost of input materials. This results in capital being stuck in inventory, reducing
the working capital turnover.

13
 ● Short-term receivables increased by 29% compared to 2021. The proportion of
overdue receivables for over one year also increased. This suggests difficulties
in collecting these receivables, decreasing the quality and turnover of working
capital.
● Financial expenses surged, reaching 5,489 billion VND, due to high-interest
rates amidst rising overall interest rates. This affects the company's ability to
profit from its business operations.
In conclusion, the imbalance between the growth rates of short-term assets and
revenue, coupled with high receivables and inventories, amid soaring financial costs,
has reduced Hoa Phat's ability to profit from its working capital.

Comments:
In the 5-year period from 2018-2022, the accounts receivable turnover ratio of HPG
consistently exceeded that of POM. Specifically, HPG's ratio ranged between 11–21
times per year, while POM's hovered at 3-6 times/year. This difference indicates that
HPG has a superior ability to collect its receivables compared to POM. This positively
reflects HPG's credibility and its debt management capabilities.
POM had a higher inventory turnover ratio than HPG in 2018, 2020, and 2022.
However, just because POM has a better inventory turnover does not necessarily mean
that its business operations are more efficient than HPG's. HPG is a leading enterprise
in the steel industry with a large scale, while POM is a medium to small-sized
business. Different business scales affect financial metrics differently.
Both HPG and POM experienced fluctuations in their fixed asset utilization rates
between 2018-2022. HPG faced a significant decline from 2018 to 2020 before
witnessing a slight increase in subsequent years. In contrast, POM saw consistent
growth throughout this period. Given POM's smaller size, its more flexible and
efficient asset utilization is understandable. HPG, being a larger conglomerate with
substantial assets such as machinery and factories, may find it challenging to achieve
as high efficiency as smaller businesses. Similarly, the overall asset utilization rate
being higher for POM than HPG does not necessarily mean POM is more profitable.
According to vietnam.vn, rising input material costs leading to below-cost selling had
caused Pomina Steel to continuously incur losses. In 2022 alone, the company
reported a loss of 1.079,9 billion VND.
Although various metrics, including liquidity, inventory turnover, and asset
utilization, it clearly indicates that Pomina Company's performance is relatively good,
even surpassing Hoa Phat Group in some aspects, the fact that POM is under scrutiny

14
suggests real operational issues. There's a possibility that POM's financial reports have
been distorted, not truly reflecting its business conditions. Specifically, POM might
have overstated revenues and actual profits, made unreasonable cost reductions, or
misvalued assets to inflate profits or improve financial ratios. Such violations aim to
conceal the actual, possibly poor business performance, which might even be severely
loss-making.
By comparing with Pomina Company – a smaller steel enterprise facing operational
challenges and under scrutiny, one can observe the clear competitive advantages of
Hoa Phat Group. Specifically, HPG is a leading conglomerate in the steel industry
with a robust position for many years. They operate stably, not facing regulatory
issues like POM. While HPG's financial metrics may not always surpass POM's, they
reflect reality without signs of manipulation. Crucially, HPG boasts a strong brand,
advanced technology, abundant financial resources, and the ability to manage risks
and operate at international standards. These advantages significantly outshine
competitors like POM.
In conclusion, while some of POM's metrics might surpass those of HPG, it is not a
sufficient basis to rate POM's actual operational capabilities higher. Independent
auditing and monitoring are crucial to ensure financial information's accuracy and
transparency and to avoid possible violations.
3. Analysis of financial structure ratios
3.1. Overall debt ratio:

This ratio indicates the percentage of a company's total assets financed by debt. A low
debt ratio might suggest ineffective use of debt, while a high ratio indicates substantial
debt burden, potentially leading to insolvency.
Total liabilities
General debt ratio = Total assets

15
 3.2. Debt to equity ratio:
It represents the percentage ratio between the capital a business raises through debt
and the capital provided by its owners. This essential financial metric evaluates the
extent of using borrowed capital compared to owner's equity. This ratio helps assess
the actual capital base of a business and whether its deployment yields high
effectiveness over time.
Total liabilities
General debt ratio = Equity

3.3. Equity Multiplier Ratio:

16
- This is a metric used to measure the efficiency of a company's use of its equity
capital.
- It is the ratio between total assets and total equity capital, and holds significant
importance for an investor considering whether to invest in a particular company. It
indicates whether the growth of the enterprise depends on equity capital or debt.
Total assets
Equity multiplier = Equity

3.4. Long-term Debt to Equity Ratio:

- This is the percentage ratio between the capital a business raises through borrowing
and the equity capital contributed by the owners. This ratio is used to assess the actual
capital sources of the business as well as how efficiently it's used over a period of
time.

4. Analysis of Profitability Ratios:

4.1. Return on Sales Ratio (ROS):
ROS (Return On Sales) represents the profit margin on net sales. It tells us how much
profit is generated from every dollar of net sales from goods and services.
Net profit
ROS= Net revenue

17
 4.2. Return on Equity (ROE):
- The Return on Equity (ROE) measures the ability to generate profit for every dollar
of common shareholder's equity.
Profit after tax
ROE= Average equity during the period

4.3. Return on Assets (ROA):

The net Return on Assets (ROA) measures the ability to generate profit for every
dollar of the company's assets.
Profit after tax
ROA= Average asset value during the period

18
5. Analysis of Liquidity Ratios:
To check the ability of the business to meet its short-term debt obligations. A business
can only survive if it meets its payment obligations when due.
5.1. Current Ratio:
Measured by the net value of current assets in relation to the short-term liabilities due.
This is the most general indicator reflecting the ability to convert assets into cash to
meet short-term debt for businesses.
Current Assets
The Current Ratio =
Current Liabilities

5.2. Quick Ratio:

- This ratio is measured by the residual value of current assets (after excluding
inventory) in relation to short-term liabilities. This indicator reflects the ability of the
business to pay without relying on the sale of inventory. In other words, after

19
excluding the value of the inventory - the least liquid portion of current assets, the net
value of the remaining current assets the business possesses.
(Current Assets−Inventory )
- The Quick Ratio =
Current Liabilities

5.3. Immediate Liquidity Ratio:

This ratio reflects the ability to meet short-term debt with cash and cash equivalents of
a company. This means, with the current amount of cash and cash equivalents,
whether the company can ensure immediate payment of its short-term liabilities.
Cash∧Cash Equivalents
- The Quick Ratio =
Current Liabilities

20
6. CASH FLOW ANALYSIS (based on financial statements and cash flow
statements from 2018-2022)

6.1. Cash flow from operating activities:

● The cash flow in 2018 was a positive 7,642, indicating a positive sign, as the
company generated cash from its core operations.
● Strong business results led to an increase in pre-tax profit, causing a significant
increase in cash balance. Although cash decreased partly because some profits
were converted into inventory and receivables, the period 2019-2020 saw a
strong rise from 7.7 trillion to 11.5 trillion dong, equivalent to 493%. In 2021,
with the surge in steel prices along with a large amount of cheap stock
inventory, Hòa Phát increased its profit margins and raked in a staggering
amount, 132.1% compared to 2020.
● These three years witnessed a remarkable cash flow growth from their business
operations, elevating the company's scale and financial potential.
● In terms of correlation, cash increased, but at a slower pace compared to the
growth rate of revenue and profit of Hòa Phát.
● In 2022, despite a sharp decline in profit, Hòa Phát still maintained cash inflow
from its main business operations with a balance of 12,278 trillion dong. This
was mainly because the company became more proactive in collecting
customer debts, simultaneously reducing inventory and limiting the purchase of
new raw materials.

6.2. Cash flow from investment activities:

● In 2018: With a cash flow of -20,533, the company made significant
expenditures in investment activities. Investment activities often involve
purchasing fixed assets or investing in projects. Such high expenditure can put
pressure on the company's total cash flow.
● During 2019-2020: cash invested in fixed assets decreased sharply by over 9
trillion dong, partly because some projects became operational and long-term
construction in progress decreased. However, cash outflows for short-term
asset investments or bank deposits increased by over 6 trillion, causing the net
cash flow from investment activities to decrease but not too significantly.

21
 ● During 2020-2021: Cash invested in short-term assets remained almost
unchanged compared to 2020, with major fluctuations coming from lending
activities, buying other companies' debt instruments, and collecting debts.
Profits on these investments. In 2021, businesses intensified short-term
financial lending and investment, causing the company's cash flow to be
negative by about 10 trillion and net cash negative by about 19.6 trillion.
● In 2022: The company expanded nearly 24,712 trillion dong for investment
activities in 2022, with the majority being for fixed assets and partly for term
bank deposits.

6.3. Cash flow from financing activities:

Cash inflow of 11,143 in 2018 indicates that the company mobilized money
from financial activities. Financial activities include issuing shares, buying
back bonds, or paying dividends. A large amount may suggest the company
sought external financing.
The increase during 2019-2020 came from borrowing, up about 13.5 trillion
dong, equivalent to 19.42%, but the company also increased debt repayment by
14.9%, causing fluctuations in the net cash flow from main financing activities
to increase only over 4 trillion dong, equivalent to 38.2% of the net cash flow
from financial activities in 2019.
During 2020-2021: Cash flow decreased sharply as businesses ramped up debt
repayment, with the repayment amount doubling compared to 2020, from 65
trillion to 121 trillion dong. Therefore, the company's investment cash flow
decreased by 89,300.
=> The cash balance of the enterprise increased more than fivefold from 2019
to 2021, indicating a robust financial capacity and the ability to generate
revenue through financial leverage."
In 2022: HPG's financial activities only netted an outflow of 1,617 trillion dong
for debt repayment and dividends to shareholders.
=> From 2018 to 2022, the company generated positive cash flow from
business operations and spent money on investment activities. The changes in
financial activities and in cash and cash equivalents changed significantly,
requiring attention from financial management. 2022 was a challenging year
with a significant decrease in cash flow.
7. Financial situation analysis of the company
With the evolution of today's market mechanisms, financial activities play a
pivotal role, continually expanding and asserting their significance. Analyzing
the company's financial status provides a clearer understanding of its
operations, bringing substantial value to the business. Accurate financial
analysis leads to higher efficiency, reducing significant costs for management
activities. This aids the company in utilizing its capital more effectively and
22
 identifying the opportunities and challenges it currently faces. Such analysis
helps us evaluate the company's performance compared to its competitors.
Being a steel manufacturer, Hoa Phat Group JSC is affected by the general
industry dynamics. Based on the above analyses, a general overview of Hoa
Phat's financial situation can be summarized as follows:
Inventory Turnover Ratio: This ratio declined from 2018 to 2020, reflecting
slower sales compared to the growth in inventory during this period. This
might have resulted from challenges in steel exports and the Covid-19
pandemic. However, the rate of inventory turnover improved again in 2021 and
2022, indicating a recovery in business operations.
Receivables Turnover Ratio: This ratio increased from 2018 to 2021, indicating
Hoa Phat Group's improved ability to quickly collect debts from customers.
Yet, the significant decrease in 2022 may reflect economic challenges or issues
in collecting customer debts.
Fixed Assets Turnover Ratio: This ratio decreased from 2018 to 2020, and
subsequently rose in 2021 and 2022. The decline during 2018-2020 might
relate to expansive production investments that were not proportionately
matched by revenues and output. However, the improvements in 2021 and
2022 likely reflect a resurgence in manufacturing operations.
Total Assets Turnover Ratio: This ratio increased consistently from 2018 to
2022. This growth pattern suggests an enhanced efficiency in using Hoa Phat
Group's total assets, especially post the Covid-19 pandemic.
General Debt Ratio and Long-Term Debt Ratio: From 2018 to 2022, HPG's
overall debt ratio fluctuated but remained within an acceptable range. This
indicates that about 50% of the company's total assets are financed by debt, and
the financial risk is not high. However, it's worth noting that the company
started using borrowed funds to support their assets, potentially carrying
financial risks if not managed effectively.
Return on Equity (ROE): HPG's ROE increased consistently from 2018 to
2020, but decreased in 2020. An ROE less than 1 indicates the company's low
financial independence as most of its assets are financed by debts.
Quick Ratio: HPG's quick ratio indicates that the company has a high ability to
settle short-term liabilities, although it has fluctuated over the years.
⇨In summary, Hoa Phat Group (HPG) exhibits a relatively stable financial
situation with a good capacity to service its debts from assets and profits.
However, the company utilizes a considerable financial leverage and experiences
fluctuations in its financial indicators. The company needs to maintain and
improve its operational efficiency to ensure future sustainability and instill
confidence in its shareholders.

23
COMPARE YOUR COMPANY WITH KEY COMPETITORS IN THE
INDUSTRY AND DETERMINE THE POSITION YOUR COMPANY IN
THE INDUSTRY
Currently, there are three commonly used indicators to reflect the core issue of
corporate financial efficiency: the ratio of profit on total assets (ROA), the ratio of
profit on revenue (ROS). , return on equity (ROE).
ROA (%) 2018 2019 2020 2021 2022
HPG 13.06% 8.36% 11.53% 22.26% 4.87%
HSG 0.62% 2.68% 9.06% 21.74% -5.49%
NKG 0.63% 0.58% 3.73% 19.22% -0.86%
POM 4.63% -2.71% 0.13% 1.39% -8.29%

If ROA increases, this shows that the company is investing well in its assets and these
assets are generating a lot of profits. On the contrary, if a company's ROA decreases
over time, it shows that the company has not invested its resources well. HPG's ROA
is always at the top of the steel industry despite the difficult times happening in the
economy. Hoa Phat's return on total assets is always good. This shows that the ability
to invest in profit-generating assets is always stable and effective.

ROE (%) 2018 2019 2020 2021 2022

HPG 23.56% 17.08% 25.21% 46.06% 9.09%
HSG 2.57% 9.06% 24.28% 47.73% -9.97%
NKG 1.94% 1.58% 9.53% 49.98% -2.26%
POM 12.07% -8.48% 0.44% 5.07% -34.27%

ROE helps us evaluate how effectively we can use equity capital. Based on the return
on capital ratio, it is possible to grasp how a company uses money to generate profits
as well as compare the operating status of a business with other businesses in the
industry.
In recent years, from 2018 to 2021, Hoa Sen and Nam Kim enterprises have had
outstanding growth in terms of ROE, in which by 2021 these two enterprises will
surpass the leading enterprise in the steel industry, Hoa Phat, in terms of index. ROE.
However, by 2022, demand for this product in the world and domestic market will
weaken, investment and real estate projects will face difficulties. But Hoa Phat still

24
kept its ROE index at a positive level, while Nam Kim and Hoa Sen had a decline in
return on equity when they decreased by more than 50%.

ROS (%) 2018 2019 2020 2021 2022

HPG 15.15% 11.64% 14.74% 22.85% 5.94%
HSG 0.40% 1.81% 5.09% 7.71% -2.60%
NHK 0.39% 0.39% 2.54% 7.89% -0.54%
POM 3.21% -2.57% 0.15% 1.29% -8.27%

When the ROS index increases over time, it proves that the company's profit in total
revenue also increases, shareholders will receive more money. The ROS index also
helps evaluate how businesses use costs for business activities. If ROS increases but
dividends paid to shareholders do not increase, it means the company has used most of
its profits for reinvestment and expanding production scale. On the contrary,
dividends increase higher than revenue growth, showing that the business is not
focusing on developing operations. This indicator shows whether the enterprise has
been effectively managing and controlling spending during the period or not. ROS
levels are always 3 times greater than typical businesses in the industry.
In addition to the criteria given above, which are commonly used ROA, ROS, and
ROE, to evaluate the financial performance of businesses, people also use a number of
other indicators such as: Current solvency, Turnover. Total asset turnover, Inventory
turnover, Average collection period
Current 2018 2019 2020 2021 2022
payment
index
HPG 1.12 1.13 1.09 1.28 1.29
HSG 0.86 0.85 1.07 1.42 1.56
NKG 1.05 1.02 1.10 1.27 1.28
POM 1.05 1.01 0.94 0.93 0.51

Hoa Phat's liquidity has always remained stable over the years. Prominent companies
in the steel industry also have progress in liquidity, but Pomina Steel Company has
had a setback in liquidity. decreasing year by year, this shows that the company's
short-term debt is quite large but its ability to pay and pay is still limited.

25
 Asset 2018 2019 2020 2021 2022
turnover
HPG 0.85 0.71 0.77 0.97 0.81
HSG 1.55 1.48 1.76 2.81 2.09
NKG 1.62 1.50 1.46 2.43 1.60
POM 1.44 1.05 0.85 1.07 1.00

Asset turnover represents the effective use of a company's assets for business purposes
. The total asset turnover index reflects the business situation of the enterprise . The
higher the index, the more effective the business's asset use plan and positive profits.
The lower the index, the more likely it is that the business is not using capital
effectively. Based on the table above, we can see that Hoa Phat's capital efficiency
still faces many problems and is not really effective. While businesses like Hoa Sen,
Nam Kim, Pomina are doing quite well and are increasingly effective in using capital
to bring revenue to the business.

Average 2018 2019 2020 2021 2022

number of
days in
inventory
HPG 107.77 117.10 117.51 115.55 114.35
HSG 89.52 77.94 67.11 59.13 82.46
NKG 84.76 77.25 84.68 84.54 135.58
POM 67.38 89.90 104.29 96.81 81.22

Average inventory days is an important indicator in financial management and supply

chain management, and it can reflect the effectiveness of an enterprise's inventory
management process. If the average number of days in inventory is high, this may
suggest that the business is suffering from excess inventory or an ineffective inventory
management process. On the contrary, if the average number of days of inventory is
low, the business may have a better inventory management process and be more
flexible in meeting market demand. Looking at the data table above, we can see that
Hoa Phat has an average number of days of inventory that is always higher than Hoa
Sen, Nam Kim, and Pomina, partly because of its large production scale leading to a
large quantity of goods. goods are produced and stored in warehouses. In addition,
difficult real estate times can have a negative impact on steel production businesses

26
because they cannot find a source of demand corresponding to the amount of supply
produced.
Average 2018 2019 2020 2021 2022
number of
collection
days
HPG 13.99 14.28 13.47 10.88 10.24
HSG 18.10 17.28 21.03 14.81 15.92
NKG 20.02 19.63 30.17 17.56 20.20
POM 62.43 73.92 80.10 47.66 49.99

The average number of days of collection is an important indicator in financial

management and capital management. If the average number of collection days is
high, the company takes a long time to collect money from customers after the
transaction, possibly due to flexible payment policies or difficulties in payment
between the two parties. On the contrary, if the average number of days to collect is
low, this shows that the company tends to collect money faster after transactions,
helping to improve capital turnover and the ability to quickly pay financial obligations
, possibly Rotate capital to earn more profits. In short, the average number of days of
collection affects the company's capital circulation and solvency. Through the data in
the table above, we can see that Hoa Phat does quite well in this matter. This helps
Hoa Phat businesses have high liquidity, making it easy to have capital to build and
develop the business as well as make payments. On the contrary, Pomina has
difficulty in this, partly affecting the liquidity of the business in the market.
Hoa Phat's position compared to other companies in the steel industry
Cumulatively for the whole year, Hoa Phat Steel Pipe output is expected to exceed
750,000 tons, an increase of about 11% compared to 2021. Hoa Phat Steel Pipe
market share increased from 24.7% (according to steel association statistics by the end
of the year 2021) to 29% (by the end of November 2022), affirming its number 1
position in Vietnam.
With a diverse range of products, high quality, meeting international standards, and
the ability to supply goods quickly, Hoa Phat steel pipes have been supplied to a series
of large projects and constructions across the country, the most prominent of which is
Long Thanh International Airport project.
Hoa Phat Steel Sheet products in the domestic market increased by about 21%
compared to 2021. Hoa Phat Steel Sheet market share is firmly in the Top 5 largest
manufacturers. Hoa Phat Steel Sheet is the first and only corrugated iron
manufacturing enterprise in Vietnam to be self-sufficient in hot rolled steel (HRC) raw

27
materials from Hoa Phat Dung Quat Iron and Steel Production Complex. This
advantage helps Ton Hoa Phat ensure stable product quality at competitive prices.
With prestressed steel products, PC Strand exports increased by 90% compared to last
year. At the same time, in 2022, the Company has provided to the market a new
product line, PC Wire.
 Hoa Phat Steel always has a leading position in Vietnam, and is one of only
two HRC steel manufacturers in the market. In addition, with its leading
position, Hoa Phat has the right to adjust steel prices to gain an advantage over
smaller companies.
Currently, there are three commonly used indicators to reflect the core issue of
corporate financial efficiency: the ratio of profit on total assets (ROA), the ratio of
profit on revenue (ROS). , return on equity (ROE).
ROA (%) 2018 2019 2020 2021 2022
HPG 13.06% 8.36% 11.53% 22.26% 4.87%
HSG 0.62% 2.68% 9.06% 21.74% -5.49%
NKG 0.63% 0.58% 3.73% 19.22% -0.86%
POM 4.63% -2.71% 0.13% 1.39% -8.29%

If ROA increases, this shows that the company is investing well in its assets and these
assets are generating a lot of profits. On the contrary, if a company's ROA decreases
over time, it shows that the company has not invested its resources well. HPG's ROA
is always at the top of the steel industry despite the difficult times happening in the
economy. Hoa Phat's return on total assets is always good. This shows that the ability
to invest in profit-generating assets is always stable and effective.

ROE (%) 2018 2019 2020 2021 2022

HPG 23.56% 17.08% 25.21% 46.06% 9.09%
HSG 2.57% 9.06% 24.28% 47.73% -9.97%
NKG 1.94% 1.58% 9.53% 49.98% -2.26%
POM 12.07% -8.48% 0.44% 5.07% -34.27%

ROE helps us evaluate how effectively we can use equity capital. Based on the return
on capital ratio, it is possible to grasp how a company uses money to generate profits

28
as well as compare the operating status of a business with other businesses in the
industry.
In recent years, from 2018 to 2021, Hoa Sen and Nam Kim enterprises have had
outstanding growth in terms of ROE, in which by 2021 these two enterprises will
surpass the leading enterprise in the steel industry, Hoa Phat, in terms of index. ROE.
However, by 2022, demand for this product in the world and domestic market will
weaken, investment and real estate projects will face difficulties. But Hoa Phat still
kept its ROE index at a positive level, while Nam Kim and Hoa Sen had a decline in
return on equity when they decreased by more than 50%.

ROS (%) 2018 2019 2020 2021 2022

HPG 15.15% 11.64% 14.74% 22.85% 5.94%
HSG 0.40% 1.81% 5.09% 7.71% -2.60%
NHK 0.39% 0.39% 2.54% 7.89% -0.54%
POM 3.21% -2.57% 0.15% 1.29% -8.27%

When the ROS index increases over time, it proves that the company's profit in total
revenue also increases, shareholders will receive more money. The ROS index also
helps evaluate how businesses use costs for business activities. If ROS increases but
dividends paid to shareholders do not increase, it means the company has used most of
its profits for reinvestment and expanding production scale. On the contrary,
dividends increase higher than revenue growth, showing that the business is not
focusing on developing operations. This indicator shows whether the enterprise has
been effectively managing and controlling spending during the period or not. ROS
levels are always 3 times greater than typical businesses in the industry.
In addition to the criteria given above, which are commonly used ROA, ROS, and
ROE, to evaluate the financial performance of businesses, people also use a number of
other indicators such as: Current solvency, Turnover. Total asset turnover, Inventory
turnover, Average collection period
Current 2018 2019 2020 2021 2022
payment
index
HPG 1.12 1.13 1.09 1.28 1.29
HSG 0.86 0.85 1.07 1.42 1.56
NKG 1.05 1.02 1.10 1.27 1.28
POM 1.05 1.01 0.94 0.93 0.51

29
Hoa Phat's liquidity has always remained stable over the years. Prominent companies
in the steel industry also have progress in liquidity, but Pomina Steel Company has
had a setback in liquidity. decreasing year by year, this shows that the company's
short-term debt is quite large but its ability to pay and pay is still limited.

Asset 2018 2019 2020 2021 2022

turnover
HPG 0.85 0.71 0.77 0.97 0.81
HSG 1.55 1.48 1.76 2.81 2.09
NKG 1.62 1.50 1.46 2.43 1.60
POM 1.44 1.05 0.85 1.07 1.00

Asset turnover represents the effective use of a company's assets for business purposes
. The total asset turnover index reflects the business situation of the enterprise . The
higher the index, the more effective the business's asset use plan and positive profits.
The lower the index, the more likely it is that the business is not using capital
effectively. Based on the table above, we can see that Hoa Phat's capital efficiency
still faces many problems and is not really effective. While businesses like Hoa Sen,
Nam Kim, Pomina are doing quite well and are increasingly effective in using capital
to bring revenue to the business.

Average 2018 2019 2020 2021 2022

number of
days in
inventory
HPG 107.77 117.10 117.51 115.55 114.35
HSG 89.52 77.94 67.11 59.13 82.46
NKG 84.76 77.25 84.68 84.54 135.58
POM 67.38 89.90 104.29 96.81 81.22

Average inventory days is an important indicator in financial management and supply

chain management, and it can reflect the effectiveness of an enterprise's inventory

30
management process. If the average number of days in inventory is high, this may
suggest that the business is suffering from excess inventory or an ineffective inventory
management process. On the contrary, if the average number of days of inventory is
low, the business may have a better inventory management process and be more
flexible in meeting market demand. Looking at the data table above, we can see that
Hoa Phat has an average number of days of inventory that is always higher than Hoa
Sen, Nam Kim, and Pomina, partly because of its large production scale leading to a
large quantity of goods. goods are produced and stored in warehouses. In addition,
difficult real estate times can have a negative impact on steel production businesses
because they cannot find a source of demand corresponding to the amount of supply
produced.
Average 2018 2019 2020 2021 2022
number of
collection
days
HPG 13.99 14.28 13.47 10.88 10.24
HSG 18.10 17.28 21.03 14.81 15.92
NKG 20.02 19.63 30.17 17.56 20.20
POM 62.43 73.92 80.10 47.66 49.99

The average number of days of collection is an important indicator in financial

management and capital management. If the average number of collection days is
high, the company takes a long time to collect money from customers after the
transaction, possibly due to flexible payment policies or difficulties in payment
between the two parties. On the contrary, if the average number of days to collect is
low, this shows that the company tends to collect money faster after transactions,
helping to improve capital turnover and the ability to quickly pay financial obligations
, possibly Rotate capital to earn more profits. In short, the average number of days of
collection affects the company's capital circulation and solvency. Through the data in
the table above, we can see that Hoa Phat does quite well in this matter. This helps
Hoa Phat businesses have high liquidity, making it easy to have capital to build and
develop the business as well as make payments. On the contrary, Pomina has
difficulty in this, partly affecting the liquidity of the business in the market.
Hoa Phat's position compared to other companies in the steel industry
Cumulatively for the whole year, Hoa Phat Steel Pipe output is expected to exceed
750,000 tons, an increase of about 11% compared to 2021. Hoa Phat Steel Pipe
market share increased from 24.7% (according to steel association statistics by the end
of the year 2021) to 29% (by the end of November 2022), affirming its number 1
position in Vietnam.

31
With a diverse range of products, high quality, meeting international standards, and
the ability to supply goods quickly, Hoa Phat steel pipes have been supplied to a series
of large projects and constructions across the country, the most prominent of which is
Long Thanh International Airport project.
Hoa Phat Steel Sheet products in the domestic market increased by about 21%
compared to 2021. Hoa Phat Steel Sheet market share is firmly in the Top 5 largest
manufacturers. Hoa Phat Steel Sheet is the first and only corrugated iron
manufacturing enterprise in Vietnam to be self-sufficient in hot rolled steel (HRC) raw
materials from Hoa Phat Dung Quat Iron and Steel Production Complex. This
advantage helps Ton Hoa Phat ensure stable product quality at competitive prices.
With prestressed steel products, PC Strand exports increased by 90% compared to last
year. At the same time, in 2022, the Company has provided to the market a new
product line, PC Wire.
 Hoa Phat Steel always has a leading position in Vietnam, and is one of only
two HRC steel manufacturers in the market. In addition, with its leading
position, Hoa Phat has the right to adjust steel prices to gain an advantage over
smaller companies.

32