Financial Management_1.Binh Minh Plastic joint stock company PDF

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HUTECH INSTITUTE OF INTERNATIONAL EDUCATION

_____________________________________________________________________________

FINANCIAL MANAGEMENT 2 ASSIGNMENT OCTOBER 2020 _____________________________________________________________________________

FULL NAME:

PHAN THI NHU MY

CLASS:

18BOBA01

STUDENT ID:

181401017

EMAIL:

[email protected]

LECTURER:

NGUYEN THI MINH THUY

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Table of Contents I.

INTRODUCTION ABOUT THE SELECTED COMPANIES................................................3 1. Binh Minh Plastic joint stock company................................................................................3 2. COMECO joint stock company............................................................................................4

II. COMPUTATION OF COMPANIES’ DIVIDEND PAYOUT..................................................6 1. Binh Minh Plastic joint stock company................................................................................6 2. COMECO joint stock company............................................................................................9 III.

FACTORS AFFECTING ENTERPRISE'S DIVIDEND POLICY....................................12

1. Definition of dividend.........................................................................................................12 2. Factors affecting dividend payment policy.........................................................................13 IV.

ANALYSIS OF THE COMPANIES’ DIVIDEND PAYOUT............................................14

1. Dividend policies of Binh Minh Plastic joint stock company............................................14 2. Dividend policies of COMECO joint stock company........................................................16 V. EVALUATION OF THE COMPANIES’ DIVIDEND PAYOUT..........................................16 1. Binh Minh Plastic joint stock company..............................................................................16 2. COMECO joint stock company..........................................................................................18 VI.

SUMMARY........................................................................................................................19

References......................................................................................................................................20

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INTRODUCTION ABOUT THE SELECTED COMPANIES

1. Binh Minh Plastic joint stock company Binh Minh Plastic joint-stock company is a company specializing in manufacturing and distributing plastic pipes such as PVC-U pipes and fittings, pipes used in plumbing systems, pipes, and fittings of HDPE, PP pipes. -R, agricultural sprays, etc. The head office is located at 240 Hau Giang, Ward 9, District 6, HCMC. The contact phone is 02839690973. Website address [email protected] Image 1. Logo of Binh Minh Plastic joint stock company (http://www.binhminhplastic.com.vn, 2020)

Binh Minh Plastic Factory was established on November 16, 1977, under the model of publicprivate partnership on the basis of merging Vietnam Chemical Plastic Pipe Company (KEPIVI) and Kieu Tinh Plastic Company. The factory specializes in manufacturing all kinds of civil plastic products and some plastic pipe products with fittings. In 1990, Officially registered for exclusive protection of trademark, trademark, and logo of Binh Minh Plastic in Vietnam. After the equitization process, the company officially operated under the name of Binh Minh Plastic Joint Stock Company on January 2, 2004. This is an extremely important milestone marking a fundamental change in the Company's operating mechanism. In 2006, the Company's shares were officially traded on the HOSE with the stock code BMP. In 2013, the Certificate of conformity for products according to the regulations of the Ministry of Construction, increased charter capital to VND 454,784,800,000. In 2017, completing the conversion of the new ecofriendly additive system and launching a new product line of PP-R spare parts. Currently, the market capitalization of Binh Minh Plastic Company is over 818 billion VND. The product distribution system has about 1890 stores in Vietnam.

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Vision: maintain its position as the leading enterprise in the plastic building materials industry in Vietnam. proactively improve capacity and spirit to be ready to compete in the region and internationally. Mission: To supply products and services to meet the growing needs of the market. ensure the harmonization of interests of customers, employees, shareholders, and society. Core value: high consensus - respect for the past - strong present - confidence in the future.90 stores which are widely distributed throughout the country of Vietnam. 2. COMECO joint stock company PETRO Vietnam joint-stock company (COMECO) operates mainly in the petroleum and oil business, in addition to fuel supply services, car wash services, petrol pump cylinder business, construction of civil and industrial projects, office for lease, premises, warehouse, etc. The head office is located at COMECO Building Floor, 549 Dien Bien Phu, Ward 3, District 3, Ho Chi Minh

City.

Phone

(84-28)

3832

1111,

Fax:

(84-28)

3832

5555,

Email:

[email protected], Hotline: (84-28) 38 300 222.

Image 2. Logo of COMECO joint stock company (comeco.vn,2020)

On December 13, 1975, COMECO was born, formerly known as the Petroleum Management Department under the Department of Transport of the City. At that time, COMECO was in charge of managing petrol stations and supplying fuel for more than 5,000 public passenger and freight vehicles in Ho Chi Minh City. In 2000, COMECO was chosen by the City People's Committee to develop the enterprise equitization project. COMECO has built a solid foundation for development, becoming a strong brand in the petroleum business, the average growth rate after 15 years of equitization of the enterprise is over 24%/year. The charter capital of the Company has increased from VND 16.2 billion in 2000 and now has increased to VND 141,206

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billion. The Company's shares have been listed on the Ho Chi Minh City Stock Exchange since the beginning of August 2006 under the code COM. At present, COMECO has 38 petroleum branches in Ho Chi Minh City and neighboring provinces such as Long An, Ben Tre, Binh Duong, Dong Nai, Lam Dong. Vision: Developing COMECO brand name is of service quality, leading to service quality in petrochemical business in Vietnam. Improve service quality, satisfy customers' needs. At the same time, to upgrade the infrastructure and invest in developing the petroleum retail network. Diversifying business lines and developing added value for customers Mission: Training and coaching employees to create a difference to increase competition in business; developing COMECO Culture and Brand. Preserve and develop capital. Interested in the interests of customers, suppliers, shareholders, employees, and the community, society.

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COMPUTATION OF COMPANIES’ DIVIDEND PAYOUT

1. Binh Minh Plastic joint stock company

Revenue

Billion VND

2016 3,678

2017 4,057

2018

Cost of good

Billion VND

2,248

2,902

3,048

sold Gross profit Net income Equity Profit available

Billion VND Billion VND Billion VND Billion VND

1,061 627 2,297 528

923 465 2,449 418

872 428 2,454 428

4,130

to ordinary shareholders Number of

Share

45,478,480

81,860,93

81,960,938

ordinary share Market price

VND

191,000

8 85,600

52,600

per share Book value of

VND

44,965

24,981

24,973

share

Table 1. The changes in the growth of Binh Minh Plastic joint stock company from 2016 to 2018 2016 Earnings per share=

Stock price=

887,000,000,000 Net income = =13,787 VND Number of ordinary share 45,478,480

2,297,000,000,000 Equity = =51,000VND Number of ordinary share 45,478,480

Profit available 528,000,000,000 ¿ = =11,610 VND Dividend per share=¿ ordinary share Number of ordinary share 45,478,480 Stockholder value pershare=Stock price +Dividend pershare=51,000 + 11,610=62,610 VND 2017

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Stock price=

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Net income 465,000,000,000 =5,680 VND = 81,860,938 Number of ordinary share

2,449,000,000,000 Equity = =30,000VND Number of ordinary share 81,860,938

Profit available 418,000,000,000 ¿ = =5,106 VND Dividend per share=¿ ordinary share Number of ordinary share 81,860,938 Stockholder value pershare=Stock price +Dividend pershare=30,000 + 5,106 =35,106 VND 2018 Earnings per share=

Stock price=

428,000,000,000 Net income = =5,228 VND Number of ordinary share 81,960,938

Equity 2,454,000,000,000 =29,998 VND = 81,960,938 Number of ordinary share

Profit available 428,000,000,000 ¿ Dividend per share=¿ ordinary share = =5,228 VND Number of ordinary share 81,960,938 Stockholder value pershare=Stock price +Dividend pershare=29,998 + 5,228 =35,226 VND

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Dividend payout of Binh Minh Plastic Joint Stock Company from 2016 to 2018 70,000 62,610 60,000 51,000 50,000 40,000 30,000

35,106 30,000

35,226 29,998

5,680 5,106

5,228

2017

2018

20,000 13,787 11,610 10,000 0 2016 Dividend pershare Stock price

Earning pershare Stockholder value pershare

In general, we can see a clear difference in dividend ratios between 2016-2017 and 2017-2018 of Binh Minh Plastic JSC. Looking at the chart, it can be seen that the period 2016-2017 has a strong decline between the indices, when 2016 is of very high value but almost halves in 2017. The period 2017-2018 is not much the volatility, it can be said that these indices are not significantly different. First, the change of earning per share, in 2016 earning per share is 13,787VND, but in 2017 this value is only 5,680VND, down 8,107VND, approximately 58.8% over the previous year. Second, dividend per share also showed signs of a sharp decline from 11,610 VND in 2016 to 5,106VND in 2017, a difference of 6,504VND or more than 56%. Next, in 2016, the stock price is 51,000VND, but only 30,000VND, down 21,000VND, that is more than 41% compared to the previous year. Finally, the stockholder value per share also fell similarly due to the decline in stock price and dividend per share, namely VND 62,610 in 2016 and VND 35,106 in 2017, a decline of VND27,504 by 44%. The reason for the strong volatility of stock indices during 2016-2017 is mainly due to the change in the number of ordinary shares. In 2017, Binh Minh Plastic Joint Stock Company announced a resolution on issuing bonus shares to increase charter capital from equity. Binh Minh Plastic Company will issue approximately 36.4 million additional shares to existing

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shareholders at the ratio of 10:8. After the issuance, the company's charter capital will increase from VND 455 billion to about VND 819 billion. This increase in charter helps enterprises have more potentials for business capital, bringing more opportunities in business activities. At the end of 2016, the State Capital Investment Corporation SCIC had a plan to divest, causing BMP's stock to increase continuously, then the stock price gradually decreased when SCIC did not divest at the end of 2017. 2018 is also the year that recorded a significant change for Binh Minh Plastics when the State Capital Investment Corporation (SCIC) sold the state capital to The Nawaplastic Industries Group (Saraburi) of Thailand. In 2018, Saraburi continued to buy more shares in Binh Minh Plastic to increase his holding to 54.39% of the company's capital, and at the same time introduced staff to key positions of the company in which Mr. Sakchai Patiparnpreechavud is Binh Minh Plastic President. This event also affects stock volatility but not by much. BMP's business results in 2017 with net revenue of VND 3,825 billion, an increase of 10% but profit before tax and net profit decreased by 25%, to VND 627 billion and VND 465 billion due to cost of goods sold and expenses sales soar. 2. COMECO joint stock company

Sale

Billion VND

2016 3,471

Cost of good sold Gross profit Net income Equity Profit available to

Billion VND Billion VND Billion VND Billion VND Billion VND

3,186 285 110 425 84

3,837

2018 4,242

3,560 277 95 467 57

265 90 503 42

71

ordinary shareholders Number

2017

of Share

14,120,628

14,120,628

14,120,628

ordinary share Market price per VND

47,4

59,7

57,5

30,122

33,051

35,645

share Book

value

of VND

share Table 2. The changes in growth of COMECO joint stock company from 2016 to 2018 2016

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Stock price=

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Net income 110,000,000,000 =7,790 VND = 14,120,628 Number of ordinary share

425,000,000,000 Equity = =30,098 VND Number of ordinary share 14,120,628

Profit available 84,000,000,000 ¿ = =5,940 VND Dividend per share=¿ ordinary share Number of ordinary share 14,120,628 Stockholder value pershare=Stock price + Dividend pershare=30,098 + 5,940 =36,038 VND 2017 Earnings per share=

Stock price=

95,000,000,000 Net income = =6,728 VND Number of ordinary share 14,120,628

Equity 467,000,000,000 =33,072 VND = 14,120,628 Number of ordinary share

Profit available 57,000,000,000 ¿ Dividend per share=¿ ordinary share = =4,037 VND Number of ordinary share 14,120,628 Stockholder value pershare=Stock price +Dividend pershare=33,072 + 4,037=37,109 VND 2018 Earnings per share=

Stock price=

90,000,000,000 Net income = =6,374 VND Number of ordinary share 14,120,628

503,000,000,000 Equity = =35,622VND Number of ordinary share 14,120,628

Profit available 42,000,000,000 ¿ Dividend per share=¿ ordinary share =2,974 VND = 14,120,628 Number of ordinary share Stockholder value pershare=Stock price +Dividend pershare=35,622 + 2,974 =38,596 VND

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Dividend payout of COMECO Joint Stock Company from 2016 to 2019 45,000 40,000 37,109

36,038 35,000

38,596 35,622

33,072 30,098 30,000 25,000 20,000 15,000 10,000 7,790 5,940 5,000

7,728 4,037

0 2016

2017 Dividend pershare Stock price

6,374 2,974 2018

Earning pershare Stockholder value pershare

In general, stock indices of COMECO Joint Stock Company do not have a strong transformation in 2016, 2017, and 2018. Stock price and stockholder value per share show signs of increasing over the years, in contrast, earnings per share decreased slightly and dividend per share decreased and then increased again. More specifically, dividend per share fluctuated slightly when 2016 reached 5,940 VND but in 2017 decreased to 4,037 VND by 32% compared to the previous year, to 2018 continued to decrease to 2,974VND, about 50% lower than 2,966VND. compared to 2016 and about 26% lower than 1063VND, about 26% compared to 2017. The reason for this uneven fluctuation is that the dividend paid each year is different base on company’s operating activities, 2018 is the lowest because the business keeps the account retain earnings for other investment activities. Earning per share value decreased steadily over the years, in 2016 was 7,790 VND, in 2017 decreased to 7,728 VND, about 0.8% lower than 62 VND compared to the previous year, this decrease was also negligible. However, it is reduced more in 2018, earning per share is 6,374VND, about 17% lower than 1,354VND compared to 2017, 1,416VND lower, approximately 18% compared to 2016. This decline is directly affected by the Net income because the Net Income decreases steadily from 2016 to 2018. Although the revenue of the

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company COMECO is increasing in the years 2016, 2017, 2018. In these years, the company's business activities are growing but Increasing market fees leads to a decrease in net income. Although other values fluctuate, the stock price has steadily increased over the years. Specifically, in 2016 the stock price was 30,098VND, in 2017 the stock price was 33,072VND, up 2,974VND, nearly 9% over the previous year. Continuing to 2018 the stock price is 35,622VND, about 16% higher than that of 2016, 2,250VND about 7% higher than in 2017. The reason why the stock price increased steadily from 2016 to 2018 is due to COMECO's equity increased during this period. In addition, in 2018, Comeco sets a target of 3,800 billion VNd in revenue and 45 billion VND in profit after tax. As a result, in the first 9 months of 2018, COMECO reached 3,169 billion VND in revenue, up 12% over the same period. The profit after tax reached 65 billion VND, exceeding 44% of the profit target assigned for the whole year. Before the news of high dividend payment, COMECO's share price rose sharply at the end of 2018, at a time of trading at 59,500 VND/share. Similar to the stock price, stockholder value per share also shows signs of increase, especially in the period of 2017-2018. In 2016, this value was 36,038VND. In 2017, it was 37,109VND, about 2.9% higher than in 2016. In 2018, the stockholder value per share continued to increase to 38,596VND, the difference was 1,487VND about 4% compared to 2017, about 7% higher than 2,558VND. Compared to 2016. Since the stockholder value per share is the value dependent on dividend per share and stock price, the stakeholder value per share also increases when these two values increase, but the stockholder value per share increases here mainly because the stock price increases steadily for years. III.

FACTORS AFFECTING ENTERPRISE'S DIVIDEND POLICY 1. Definition of dividend

The dividend is the company's after-tax profit paid to current shareholders. Dividends can be paid to shareholders in various forms, such as in cash, in shares, or by property. The selection of different forms of dividends has certain effects on the book value of shares, company value, and investment capital.

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For a joint-stock company, the Board...