LIDECO ( NTL – HOSE)Tu Liem Urban Development

Joint Stock

Content

• Overview of LIDECO• Requirement 2• Requirement 3

OverviewTu Liem Urban Development Joint Stock

Company (LIDECO )• History: 1974 1992 2004 2007• Main business: the real estate industry new urban areas, residential areas and industrial zone provides architectural and engineering services constructs power transmission systems

• Ownership

Requirements

The relationship between Vietnamese financial markets and corporate financial management of LIDECO

The implementation of the goal of corporate finance over time with two aspects: profitability and risk

Requirement 2Vietnamese financial market 2011

• July CPI 1.17%. Inflation 22.16%• Trade deficit - SBV kept allowing banks to re-

export gold. 7 month trade deficit- $7bil But in Sept, trade deficit • Contracted FDI 0.7%, month disbursed FDI:

$6.3 bill• The foreign exchange market is relatively

stable in July but it is volatile in Sept

Vietnamese financial market 2011 ( cont)

• Around VND 45 trillion of VGBs and nearly VND 37 trillion of government guaranteed bonds were issued

• Until July, about 94VND tril: net-withdrawn via OMO by SBV

Requirement 2Corporate financial management of LIDECO

• Charter capital: VND328 bill VND656 bill by issuing more stocks, auction 2,000,000 stocks of NTL on stock exchange

• But Due to unfavorable market, LIDECO not issue stock with list price “ not below 35,000 VND/ stock” Resolution No. 14/NQ-HDQT-LIDECO: delay to issue 2 mil stocks( 8/3/2011) until 2012

• 8/7/2011: listing & trading additional sharescommon stock / 10,000VND / 30.8 mil shares / July 10-20

• 8/8/2011: Announcement on share buyback- repurchase 1mil registered shares

The price and volume of shares

Requirement 3profitability and risk

Balance sheet 2007 2008 2009 2010Current assets 586,529 941,331 1,142,565 2,045,847

Short-term investment 59,815 - 862 4,330Short-term accounts receivables 172,735 156,296 198,032 243,740Inventories 242,626 654,916 486,089 822,469Other current assets 53,469 59,390 83,752 74,775Non-current assets 73,844 24,609 28,871 89,162Long-term account receivable - - - -Fixed assets 5,535 6,488 11,980 26,421Investments in properties - - - 4,623Long-term investments 66,021 15,972 14,871 54,573Good-wills 2,289 2,149 2,020 3,546Total assets 660,373 965,940 1,171,436 2,135,009Liabilities 366,263 709,292 615,573 1,170,632Current liabilities 366,083 709,013 568,523

1,124,448

Non- current liabilities 180 278 47,050 46,185Owner Equity 294,110 256,648 555,862 927,389Total assets+ owner equity 660,373 965,940 1,171,436 2,135,009

Balance sheet

Balance sheet

• Assets: increasing dramatically ( especial current assets) => enhance liquidity and broaden scale

• Liability : mainly current liability ( from customers, suppliers, and the characteristics of the business area)

• Equity: rise with 67% ( 2009/2010)- the profit of Tram Troi and Dich Vong projects

Cash flow of statementStatement of cash flow 2007 2008 2009 2010

Cash flow from operating activities 22,520 74,474 469,054 581,680

Cash flow from investing activities 3,010 3,554 21,494 14,257

Cash flow from financing activities (9,000) (65,182) (187,842) (69,235)

Net cash flow of the year 16,531 12,846 303,101 526,702

Cash and cash equivalents at the beginning of year

41,354 57,884 70,729 373,830

Cash and cash equivalents at the end of year 57,884 70,730 373,831 900,532

Comment: Good cash flow

Operating activities: significant rise=> the efficiency of the ongoing projectsInvesting : pay more attention to its industry

Financing: reduce ( 2009-2010): tend to attract its own capital and shareholders

Income statementsIncome Statement 2008 2009 2010Revenues 371,307 1,379,554 1,389,725Cost of goods sold 241,434 671,699 632,564Gross profit 129,873 707,855 757,161Operating expenses Operating profit 78,991 715,891 783,084Interest expense Earnings before taxes 79,023 713,250 781,122Taxes Net profit after taxes 61,812 530,403 583,969Profit after tax of parents' shareholders - - 7,407Net income 61,812 530,403 576,562

Comment: the striking feature is the dramatic increase in revenues from 2008 to 2009, because of the optimistic view of real estate market and the support of governmental

policy

Financial ratios 2007 2008 2009 2010Valuation

EPS (Thu nhập 1 cổ phần (đồng/cp) 34,794.36 3,769.04 17,637.34 17,637.34P/E 0.57 5.31 1.13 1.13BVPS ( Giá trị sổ sách 1 cổ phần) 35,797.35 15,616.38 28,274.04 28,274.04P/B 0.56 1.28 0.71 0.71

Dividends DPS ( dividend per share) 3,000 3,000(Dividend Yield) Cổ tức/giá 15.00%Payout Ratio 9.28% 17.07%

Growth Rates (%) Sales growth 129.63% -17.56% 271.54% 0.74%Pre-tax profit growth 56.16% -51.53% 802.58% 9.52%Net profit growth 25.97% -53.00% 758.09% 10.10%

Internal Liquidity Ratios Current Ratio 1.6 1.33 2.01 1.82Quick Ratio 0.79 0.32 1.01 1.02Cash Ratio 0.32 0.1 0.66 0.8

Profitability Ratios (%) Gross Profit Margin 37.29% 34.98% 51.31% 54.48%Pre-tax Margin 36.20% 21.28% 51.70% 56.21%Net Profit Margin 29.20% 16.65% 38.45% 41.49%Return on Assets (ROA) 24.93% 7.60% 49.63% 34.88%Return on Equity (ROE) 59.81 22.52 130.45% 77.74%

Operating Efficiency Receivable Turnover 3.89 2.31 8.72 7.45Inventory Turnover 1.93 0.83 2.42 2.12Payables Turnover 38.84 20.6 53.23 21.02Total Asset Turnover 0.85 0.46 1.29 0.84

Capital Structure Debt/Equity 124.53% 276.37% 110.74% 126.23%Debt/Total Assets 55.46% 73.43% 52.55% 54.83%

Profitability 2007 2008 2009 2010 Industry

ROA 24.93% 7.60% 49.63% 34.88% 10.76%

ROE 59.81% 22.52% 130.45% 77.74% 34.95%

Comment:ROA&ROE of NTL > these of industry ( real estate) => have a

good prospects of developmentROE : dramatic fluctuation=> pay more attention to the

capital structure In 2010, ROE &ROA – reduce => the effect of the market and the effiency of its projects ( Tram Troi, Dich Vong )

Valuation 2007 2008 2009 2010 Industry

EPS 34,794.36 3,769.04 17,637.34 17,637.34 5,584

P/E 0.57 5.31 1.13 1.13 8.16

P/B 0.56 1.28 0.71 0.71 2.52

Comments:P/E & P/B of NTL << these of industry => ROE of NTL < other

big companies in the same of industry => risker EPS of NTL>> this of industry => the good effects of the

government policy of housing and apartment

Dupont Analysis

Dupont Analysis 2007 2008 2009 2010Net profit margin 29.20% 16.65% 38.45% 41.49%Total assets turnover 0.85 0.46 1.29 0.84Asset/equity 2.41 2.94 2.63 2.23ROE 59.81% 22.52% 130.45% 77.74%

Dupont analysis

ROE by: increasing net profit margin upgrading asset turnover determine the capital structure=> LIDECO should pay more attention to change its capital structure by calculating the number of issued stocks

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