Analysis Kbc's Fianancial Statement - Kinh Bac City Development Holding Corporation

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1.1. List of tables

Table 3: The significant item of profitable of KBC through three years 2013, 2014, 2015 13

1.2. List of figures

Figue 1: Trends of KBC’s income statement items from 2013 to 2015. Adapted from KBC’s Financial Statements 5

Figure 2: Trends of KBC’s working capital items from 2013 to 2015. Adapted from KBC’s Financial Statements. 6

Figure 3: Detail KBC’s inventories items from 2013 to 2015. Adapted from KBC’s Financial Statements. 7

Figure 4: Cash flow ratio of KBC and 3 industry peers from 2013 to 2015. Adapted from Shortened Financial statements of KBC, HAG, VIC and ITA (as cited in Cophieu68). 9

Figure 5: Asset turnover ratio of KBC and Vingroup from 2013 to 2015 10

Figure 6: Asset turnover ratio of KBC and Vingroup from 2013 to 2015 11

Figure 7: Day debtors turnover ratio of KBC and Vingroup from 2013 to 2015 12

Figure 8: Compare capital structure of KBC, NOVALAND, VINGROUP in 2015. Adapted from these company’s Financial Statements. 12

Figure 9: ROA, ROE, GPMR of KBC in 2015. Adapted from these company’s Financial Statements. 13

Figure 10: Compare gross profit margin index of KBC, HAG, VINGROUP in 2015. Adapted from these company’s Financial Statements. 14

Figure 11: Compare market performance ratios (EPS) of KBC, NOVALAND, VINGROUP in 2015. Adapted from these company’s Financial Statements. 15

Figure 12: Compare market performance ratios (P/E) of KBC, NOVALAND, VINGROUP in 2015. Adapted from these company’s Financial Statements. 16

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- Overview of Kinh Bac City Development Holding Corporation (KBC)

Kinh Bac City Development Holding Corporation (KBC) is a leading enterprise in real estate, KBC was established in 2002 in Bac Ninh Province and having been listed on HSX (Ho Chi Minh City Stock Exchange) as KBC index since 2009. The featured competitive advantage of KBC is the combination between Industrial park and Service Urban area. It has 6 members, they are Nam Viet Real Estate Joint Stock Company, Sai Gon Hi-Tech Park Infrastructure Development and Investment Joint Stock Company, Sai Gon – Dung Quat Development and Investment Joint Stock Company, Sai Gon – Binh Phuoc Industrial park Corporation, Sai Gon – Ca Mau Infrastructure Corporation and Sai Gon Telecommunication and Technologies Corporation.

- Financial Analysis

- Trend Analysis

2013 is the base year and is assigned a commencing index value of 100. The two subsequent years are expressed as indices relatively to the base year.[pic 7]

Figure 1: Trends of KBC’s income statement items from 2013 to 2015. Adapted from KBC’s Financial Statements.

- Revenue, Cost of Good Sales, Gross Profit and Net Profit

- Revenue

Revenue declined slightly from VND 1,072,821 Million in 2013 to VND 1,069,035 Million in 2014. The critical factor that influenced KBC performance was the FDI attraction level because 90% of the company’s customers are FDI corporations (KBC Annual report, 2013). In the period from 2013 to 2014, the investment from FDI was stable, that reason caused to the falling down in revenue of KBC. For the following year 2015, there was the great improvement in the revenue of KBC with the number VND 1,434,852 Million due to the inflowing of FDI into Viet Nam. Leases of land and infrastructure was still the biggest source of revenue, moreover the revenue from leases of warehouses and provision of other services increased. In contrast, sales of factories were rather slow.

- Cost of goods sold

COGS accounted for 54% of revenue in 2013 and 45% revenue in 2014, which was mainly due to low-cost land bank of 4,500 hectares for industrial park development (8% of total operating industrial parks nationwide) of KBC and its subsidiaries (KBC Annual Report, 2014). After that in 2015 the percentage of COGS accounted for 80% of revenue, that because KBC developed more in business.

- Gross profit and Net Profit

KBC showed considerable recovery in profit of VND 78,816 Million net profit in 2013 as costs were managed better. Net profit continued to soar in 2014 and 2015 respectively reaching VND 311,969 Million and VND 602,062 Million, due to the decreasing in operating expenses from VND 310,697 Million to VND 251,673 Million and even VND 89,988 Million in 2015. The trend showed that profit increased year by year.

- Cash, Inventories, Trade receivables, Trade payables.

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Figure 2: Trends of KBC’s working capital items from 2013 to 2015. Adapted from KBC’s Financial Statements.

- Cash

Cash account remained a small proportion in the total assets, posted at VND 228,164 million ~ 1.7% in 2015. Moreover, cash increased significantly from 2013 (VND 103,092 million) to 2015 (VND 228,164 million), it can help company paying others current expenses including rental, electricity bill, personal expenses, etc.

- Inventories

In total assets of KBC Company, inventories account is the biggest proportion, up to 60%. The inventories account mostly comes from construction cost which of in-progress projects like Trang Cat Industrial and Residential Zone (VND 3,352,809 million) and Tan Phu Trung Industrial Zone (VND 2,559,882 million). In 2015, inventories posted at VND 8,364,448 million, an increase of 8% compared to 2014 (VND 7,616,350 million). In addition, the beginning of 2015, Trang Due industrial made up 200 ha and developed building investment. Moreover, Tan Phu Trung Industrial Zone with 550 ha including made up 90% and rented 50 ha. In 2015, KBC’s inventories