Group assignment report financial invesment company analysis và stock valuation of transimex logistic joint stock company

Despite the general difficulties and challenges faced by logistics service businesses in 2023, the market exhibited notable shifts towards new trends and business models in logistics ser

HO CHI MINH UNIVERSITY OF BANKING

COMPANY ANALYSIS VA STOCK VALUATION

OF TRANSIMEX LOGISTIC JOINT STOCK COMPANY

Implementation group: Group 2

Nguyén Ngoc Nhu Quynh 030609211244

Lê Trương Diễm Quỳnh 050609212162 Huỳnh Thị Giao Linh 050609210680 Nguyễn Ngọc Gia Linh 050609210673 Phan Bạch Khánh Linh 050609212014

Lecturer: Ph.D Nguyễn Duy Linh

Ho Chi Minh January 2024

1.2.1 The characteristic of CANSLIM model: - eceeeeenceneeeeeeneeenees 1 1.2.2 Model Criteriar .e 45 1 1.2.3 Reasons for choosing TỌT:: - c2 2121212111121 111111112 2111 ee 2

2 MACROECONOMIC ANALUYSIS: SH HH nung ưy 3 2.1 Global Economic anaÏyS§1§: - Đà c0 2011221121112 112 215 1111115212 xài 3

PP (0) 006.3 09 30 XdaaIẶV 3 2.1.2 Global Unemployment RĐaf€: - Q02 2221122111122 11111111152 rryy 3 2.1.3 Global Inflation Raf€: S2 S21 SH HH Hư Hà rày 4

2.1.5 Global Budget DecIfifs: 0 1 0111211121111 11222222 1111 rêu 4 2.2 Domestic Economic anaÏW§1S: c- c 12t 2v 2 12 2112112211111 22g11 xe 5 2.2.1 Gross Domestic Productin VietNam (GDP): 2c cty 5 2.2.2 Unemployment Rafe im VietNam: 0 222112211122 2 tre reo 6 2.2.3 Inflation Ratfe in ViefNam: ng HH Hee 7 2.2.4 Interest Rafe in Viet am: ST c2 HH HH HH nh nay 8 2.2.5 Budget deficit m ViefNam: 20 2221112111211 1 1211221115111 reu 8 2.3 Monetary policy and fiscal policy analysis im VIetnam: -. s-+5- 9 2.3.1 Fiscal policy analysis in Vietnam: c1 11112 21111 nrớn 9

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INDUSTRY ANALJVSIS: GA HH HH HH 000 08001800

4.1.4.2 Liabilities Situations cece cece eeeeeeteneeeeneenseeseneeennenteenaees 23 4.1.5 Financial Ratilo AnaÌySIS: 122012112112 HH tre 24 4.1.5.1 Fmaneial Ratios for Liquidity - Liquidity Ratio: - 24 A¬“ 'ÀuAalaaađaađaađitiiiiỶŸŸẢẢẢẢẢ 25 4.1.5.3 Caprfal structure and fnanclal rIsE: 5 + 522 222cc c+sxs2 27 4.1.5.4 Operating profit ImdliCAafOTS: - c1 1222212221 key 30 4.2 Stock valuation methođs: - t1 1121121121122 11111111011 81111 1H ray 34 4.2.1 Market Ratlo Valuation: -c ch HH HH HH ưu 34 4.2.1.1 Price-Earninng raflo - P/E: S S2 S2nnS re ve 34 4.2.2 Discounted Cashfow Valuafion: cc c ncnnnHnHhnHh nh Hớu 36 4.2.2.1 Free Cash Flow to Equity - FCFE: Ặ 2c 222cc se: 37 4.2.2.2 Free Cash Flow to the Fnm - FCFEE: .cccccs s2 s+s 38

5 TECHNICAL ANALYSÌS: SH HH HH HH nhượn 4I 5.1 Resistance and SUppOFf: - - 1 2 2221122111121 12 11118115111 15 21112 key 4] 5.2 Trend lines e 41 lhaiaaaaiiii 44 5.4 Candlestick and price paff€THS: - L2 2.11221222122115 1tr key 46 5.4.1 Candlestick pafferms: - L0 2012211212112 1111811121112 1118111 Hyun 46 làn H lo no -haiảả›3j544 46

5.4.2.2 Head and shoulders Patterm: - S2 e 50

3.5.1 Moving AV€TAĐ€: QLQ nnnnnn HH kh KH net 52 5.5.2 Moving Averàe Convergence Divergence - MACT:, - 33 5.5.3 Bollinger bandđs: .- - L2 2221122111121 112 1111118112011 118111 rườn 35 3.6 Relative strength Index — RŠÌ: c1 2.12211122111221 He 57

5.8 Money Flow Index — MÌ: - 2L 1 2L 1211121112 2151 115111511211 12k rau 61 3.9 Predicting stock price frend: . c c2 1211211112212 1112111211811 ky Hài 64 3.9.1 Using FIbonacci Retracem€rif: - c1 22211221112 2 ke 64

1 INTRODUCTION:

1.1 Overview of William J O'Neil:

William J O'Neil, the mind behind the CANSLIM method, was born in 1933 in Oklahoma and grew up in challenging circumstances in Texas Starting his career as a stockbroker at Hayden, Stone, & Co in Los Angeles in 1958, he quickly realized the crucial role of data analysis in investment success when building investment portfolios for clients He published an empirical study on the biggest stock market winners in history, laying the foundation for his O'Neil Method, also known as CANSLIM This method combines historical precedent, fundamental analysis, and technical analysis of stocks

1.2 The CANSLIM model:

1.2.1 The characteristic of CANSLIM model:

¢ Only buy stocks in a rising market Implement defensive measures when a bear market begins to emerge

¢ Focus on companies with high-profit growth rates and revolutionary products or services

® Buy stocks that are popular among institutional investors Steer clear when institutional investors are selling off

1.2.2 Model Criteria:

Investor William O'Neil applies a set of key criteria when implementing his investment strategy, known as the CANSLIM strategy This is a multidimensional system that combines both fundamental and technical analysis to identify potential stocks The seven letters in CANSLIM represent the most critical factors contributing to a stock's success The criteria include the following elements:

(1) C - Current Quarterly Earnings per Share: This stock is expected to witness a significant increase in current quarterly earnings compared to the same period last year A sudden surge in profits is often considered a positive sign

EPS = (Net Income - Preferred Dividends) / Weighted Average Shares Outstanding

(2) A - Annual Earnings Growth: Annual earnings growth is a crucial factor when using the CANSLIM filter This growth is often seen as a positive indicator (3) N - New Product, New Management: Companies with new products or services often have significant growth potential Innovative and popular products and services can lead to faster profit increases for the company Changes in leadership positions, industry conditions, the advent of new technologies, etc., can all have a positive impact on stock prices

(4) S - Supply and Demand: The law of supply and demand affects stock prices

If demand is high and supply is low, prices rise Observing daily trading volume is a way

to measure supply and demand O'Neil uses the A/D (Accumulation/Distribution) indicator, comparing buying and selling pressure to evaluate stocks Each business has a different A/D, with the average level being 60 points or higher

(5) L - Industry Leading Stocks: Stocks should belong to companies that lead their industry To adhere to CANSLIM, investors should only mvest in industry leaders with a Relative Strength (RS) index of 80 or above

(6) I - Institutional Sponsorship: Interest and investment from financial institutions and investment funds are positive signals Investors should only buy stocks sponsored by at least a few institutional investors with recent investment records above average, and the number of institutional sponsors should be increasing in recent quarters (7) M - Market Direction: This is the most crucial criterion in this investment method It is essential to select stocks in the context of a generally upward-trending market A stock may meet all the preceding criteria, but if the overall market is in a downward trend, even the best-performing stocks will find it challenging to achieve high growth

1.2.3 Reasons for choosing TOT:

Based on the CANSLIM model, Transimex Logistics (TOT) company has recorded many important indicators on its recent financial situation:

Filtered by "C" criteria: Quarterly revenue growth compared to the previous quarter

is 16.39% (below the minimum of 25%) The 5-year average profit growth is 19.80% Filtered by "A" criteria: The 5-year average revenue of Transimex Logistics JSC has grown by 18.45% The company's ROE index is 35.28%, which, according to CANSLIM criteria, is an important factor for investors to consider when selecting good stocks Filtered by "I" criteria: Recent statistics indicate that the amount of shares bought by internal shareholders and large shareholders is significantly higher than the amount of shares sold This shows the attention and investment from financial institutions and investment funds, which is a positive sign

2 MACROECONOMIC ANALYSIS:

2.1 Global Economic analysis:

2.1.1 World Gross Domestic Product (GDP):

According to the EU's Summer 2023 Economic Forecast, the global economy shows signs of slowing down as the GDP for Q2/2023 only increased by 0.5% compared to the previous quarter, lower than the 1% growth in Q1/2023, driven by strong domestic demand in the United States and some other developed economies

In the Preliminary Economic Outlook Report of September 2023, the OECD revised the global growth for 2023, increasing it by 0.3 percentage points from the June 2023 forecast to reach 3% Tightened economic policies are implemented to curb inflation and focus on public finance, affecting most developed economies

According to the June 2023 Global Economic Report by the World Bank, the global economic situation remains unstable due to negative factors such as the COVID-19 pandemic, conflicts in Russia and Ukraine, and tighter monetary policies aimed at controlling inflation

2.1.2 Global Unemployment Rate:

According to the annual report on global employment and social outlook by the International Labour Organization (ILO), published in January 2023, the global

unemployment rate for the current year is projected to be 5.8%, equivalent to 208 million people, surpassing the previously forecasted 205 million The rapid rise in inflation has led to a swift decline in real income According to the OECD, the global labor market overall remains tight, with low unemployment rates, and in most developed economies, vacancy rates are still relatively high However, the pace of job growth has slowed, and a reduction in resignation rates has recently led to a decrease in the number of job openings

2.1.3 Global Inflation Rate:

According to the forecast by the International Monetary Fund (IMF), the global inflation rate is expected to decrease from 8.7% in 2022 to 6.8% in 2023 This projection

is based on the estimation that the average inflation in most economies Global will decrease in 2023 The primary reasons for this decline are believed to be the reduction in international commodity prices and the implementation of tighter monetary policies by countries Additionally, the slowing global economic growth and reduced demand are major factors contributing to the moderation of inflation However, inflationary pressures

in emerging economies are expected to persist in 2023 due to the high value of the USD, low foreign exchange reserves, rising commodity and energy prices

2.1.4 Global Interest Rate:

The overall backdrop of the global economy has created a remarkably high global interest rate environment, causing the USD to reach its highest level in 20 years Real interest rates have increased in most economies, except for Japan In the United States, real interest rates are at their highest since 2005 Bank lending has significantly slowed in the Eurozone, an economy relatively dependent on banks, especially for households The rise in interest rates to curb inflation may create tension in the financial system, requiring swift policy reactions to stabilize financial conditions in various countries

2.1.5 Global Budget Decifits:

The actual budget deficit for the year 2023 has doubled compared to 2022 According to the latest figures from the U.S Department of the Treasury, the federal

budget deficit is $1.7 billion in 2023, up from $1.37 billion in 2022 The U.S Treasury

Department states that the current budget deficit is the largest since the approximately

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$2.78 billion gap caused by Covid in 2021 The deficit occurred as President Joe Biden is urging Congress to allocate $100 billion for new national security and foreign aid

spending, including $60 billion for Ukraine and $14 billion for Israel, along with funding

for U.S border security and the Indo-Pacific region The budget deficit for the fiscal year

2023 accounts for 6.3% of the Gross Domestic Product (GDP)

2.2 Domestic Economic analysis:

2.2.1 Gross Domestic Product in VietNam (GDP):

In the first 9 months of the year, the economy grew by 4.24% compared to the same period last year, only higher than the growth rates of 2.19% and 1.57% recorded in the same 9 months of 2020 and 2021 during the 2011-2023 period In addition, the State Bank of Vietnam has reduced the policy interest rate four times in the first half of this year to stimulate growth However, weak global demand has hindered companies from expanding production This year, the government projects the economy to expand by around 6.5%, lower than the decade-high of 8.02% achieved in 2022

In the third quarter of 2023 (7-9/2023), Vietnam's Gross Domestic Product (GDP) increased by 5.33% compared to the previous year This growth is higher than the 4.05% growth rate in the second quarter and reflects continuous expansion over eight consecutive periods The economy has surpassed the trough and begun to rebound, although at a slower pace than the 13.71% growth rate in the same period in 2022 when the economy was recovering from the Covid-19 pandemic The main driver behind this expansion is the service sector, with a growth of 6.24%, primarily driven by retail and tourism This is followed by the industrial and construction sector (5.19%) and agriculture, forestry, and fisheries (3.72%) The service sector is expected to contribute about 40% to the GDP

0.00 %

Jan 2021 Jul 2021 Jan 2022 Jul 2022 Jan 2023 Jul 2023

2.2.2 Unemployment Rate in VietNam:

Unemployment rate determines the overall utilization of the labor force in the economy Unemployment reduces individual and economic incomes, impedes economic efficiency, and leads to a high inflation rate, causing damages to both the economy and society

As of September 2023, the unemployment rate in Vietnam is 2.28%, a decrease of 0.07% The employed workforce is 51.2 million people, an mcrease of 776 thousand compared to 2022 The labor force is trending upward, but job market growth is slow due

to continued challenges and difficulties Primarily, this is attributed to low production orders from businesses, influenced by the global economy, and the labor market not improving in terms of quality, with a lack of stable and secure jobs, fluctuating conditions, and a significant proportion of low-income positions

In the third quarter of 2023, 65% of employed workers were in informal employment The number of workers engaged in self-production and self-consumption is continuously decreasing In various economic sectors, workers’ incomes have increased compared to 2022, with the average income in the third quarter of 2023 being 7 million VND/month Despite the reduction in the unemployment rate, the current situation, post-

Covid-19 pandemic and global inflation crisis, presents many challenges for the central bank to conduct monetary policy

However, following the Covid period in 2020-2021, the Fed and many central banks worldwide have tightened monetary policies, raising interest rates rapidly In 2022, the Fed increased interest rates four times, each time by 0.75%, triple the normal rate, causing the USD to appreciate by over 21% compared to 2021 This puts significant pressure on Vietnam's monetary policy, forcing choices between allowing the exchange rate to rise, maintaining interest rates, holding foreign exchange reserves, or allowing the exchange rate to depreciate, leading to imported inflation and economic instability

2.2.3 Inflation Rate in VietNam:

The strong upward pressure on inflation from the demand side is driven by the implementation of economic and social recovery and development programs, causing a sudden increase in overall demand while supply chain issues remain unresolved Cost- push inflation pressure is also on the rise, especially in the context of the increasing value

of the USD, leading to higher import costs for raw materials and goods

Additionally, the possibility of price increases for grains and food due to the impact

of natural disasters and the pandemic exists For energy, the expected increase in demand for oil and electricity in 2023, especially with the rising overall demand, poses inflationary pressures While domestic electricity prices have been controlled and not increased for several years, the high prices of coal and gas used in power generation, along with a significant share of thermal and gas power in total electricity production, still contribute to inflationary pressures from this aspect

In 2023, inflationary pressures also come from the potential adjustment of service prices according to the government's management schedule, such as education and healthcare services

The index of fuel prices used in production recorded an increase of 6.79% in 2022 compared to 2021, while the import price index of goods also increased by 8.56% during the same period This directly impacted the production price index of many economic

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sectors For agriculture, forestry, and fisheries products, the production price index increased by 3.89% compared to the previous year Meanwhile, the production price index for industrial and service products was 4.24% and 3.69%, respectively These areas all experienced higher increases than the average inflation index in 2022, which was 3.15%

The Ministry of Finance estimates that the Consumer Price Index (CPI) for the average of 2023 may increase in the range of 3.2% to 3.6% Similarly, the General Statistics Office and the State Bank of Vietnam also forecast the average CPI to range from 3.3% to 3.6% This demonstrates consensus in predicting the expected inflation rate

in 2023, with data fluctuating within a range of 0.3%

2.2.4, Interest Rate in VietNam:

In the current period, the banking sector needs to effectively implement the government's policies to reduce lending interest rates, cut unnecessary fees to support businesses and individuals in recovering and developing production and _ business Additionally, it should continue to direct credit sources to priority sectors and areas of production and business, ensuring safe and efficient credit operations It is important to tightly control credit mto sectors with high inherent risks, and create conditions for businesses and individuals to access bank credit

2.2.5 Budget deficit in VietNam:

The challenges arising from the real estate and banking markets have had a negative impact on the state budget balance in Vietnam in 2023 The estimated budget deficit for

2023 is around 16.4 billion USD

In 2023, the projected budget revenue is expected to exceed 1.62 million billion VND, with the estimated budget deficit at 4% of GDP—an improvement compared to the initial estimate by the Ministry of Finance at the beginning of the year (4.42% of GDP) Compared to 2022, this year's budget deficit is expected to increase by about 0.4% Based

on the GDP scale in 2022 (409 billion USD), the estimated budget deficit in 2023 1s nearly 16.4 billion USD

In 2023, the National Assembly approved the total central budget borrowing of 621.015 billion VND Of this amount, 430.5 brillion VND is allocated to offset the central budget deficit (equivalent to 4.18% of GDP), and 190.515 brillion VND is allocated to repay the principal

For budget expenditures, the total state budget expenditure in September 2023 is projected to be 156.1 billion VND The cumulative expenditure in the first 9 months of

2023 is estimated at 1,239.4 billion VND, equivalent to 59.7% of the annual budget estimate and an increase of 14.1% compared to the same period last year By the end of the third quarter of 2023, the estimated state budget deficit is 15.6 billion VND, marking a significant reversal from the surplus of 53 billion VND reported in the previous month Additionally, the government has approved loans to re-lend official development assistance (ODA) and foreign concessional loans with a total value of 23.394 billion VND The government is actively mobilizing funds from domestic sources, ODA, and concessional loans from foreign donors, expecting to implement nearly 94% of the plan approved by the National Assembly, with an approximate amount of 604.379 billion VND

2.3 Monetary policy and fiscal policy analysis in Vietnam:

2.3.1 Fiscal policy analysis in Vietnam:

Support policies for the economy in recent years have reached an unprecedented scale, accounting for about 8.3% of GDP, much higher than mn countries of similar economic size Fiscal policies, in particular, play a crucial role Various tax exemptions, reductions, and deferrals have been implemented, amounting to VND 530 billion from

2021 to the present Fiscal policies contribute to macroeconomic stability and inflation control Specifically, Vietnam's fiscal policy for the 2021-2023 period has been effective

in restraining inflation, with an average inflation rate of 4%, while many economies around the world are grappling with high inflation This policy helps ensure sustamable consumer spending, avoiding long-term pressure and economic recession It could be a factor contributing to future stock price growth

2.3.2 Monetary policies in VietNam:

With the guidance and coordination of the Government, the Prime Minister, and the implementation of various measures and policies by the State Bank of Vietnam (SBV), monetary policy has made significant contributions, strengthening the foundation of the macroeconomy This includes contributing to keeping inflation under control at a low level (average 3.15%), achieving high economic growth (8.02%), and projecting credit growth to be around 14.5% Particularly, in November, the U.S Department of the Treasury removed Vietnam from the list of countries being monitored for currency manipulation, acknowledging the high praise for the SBV's monetary policy management and exchange rate

Regarding interest rates, given the rapid global interest rate increases and nsing inflationary pressures domestically, the SBV has made considerable efforts to maimtain interest rate stability during the first 9 months of the year by keeping policy interest rates unchanged Additionally, in the context of exchange rates, the SBV has flexibly managed the situation amidst significant fluctuations in the international market Since October

2022, the SBV decided to adjust the USD/VND exchange rate band from +3% to +5% to create leeway for exchange rate flexibility, stabilizing market sentiment These flexible management measures have helped the Vietnamese dong depreciate against the USD by about 3.56%, which is lower than many other currencies worldwide

3.1 General overview of the industry:

3.1.1 The Impact of the Covid-19 Pandemic on Global Logistics: Unlike 2020, when the Covid-19 pandemic spread in China, paralyzing economies across Europe and North America, by 2021, these major economies were on the path to recovery and reopening due to widespread vaccination campaigns However, in Asia, a strong resurgence of Covid-19 occurred in countries such as Thailand, Indonesia, the Philippines, Malaysia, Vietnam, and India This resurgence created new bottlenecks 1n the global supply chain, once again threatening and hampering the post-Covid-19 economic recovery Promising countries in the 'China + I' strategy, like Vietnam, Indonesia, or

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Thailand, experienced a widespread outbreak, leading to lockdowns and halting operations in industrial zones, causing disruptions in production This could potentially slow down the anticipated transition of the supply chain as previously envisioned

3.1.2 The import-export situation and logistics industry in Vietnam: 3.1.2.1 Export and Import:

Overall in the nine months of 2023, the total import-export turnover of goods reached $497.66 billion USD, marking an 11% decrease compared to the same period last year Specifically, exports reduced by 8.2% and imports by 13.8%

Hình 1.14: Xuất, nhập khẩu hàng hóa 9 tháng năm 2023

a turnover of $70.9 billion USD, but with an 18% decline in the surplus exported to the United States Meanwhile, China maintained its position as the largest import market, with a tumover of $79.1 billion USD, witnessing a 26.6% reduction in the surplus imported from China Despite the general difficulties and challenges faced by logistics service businesses in 2023, the market exhibited notable shifts towards new trends and business models in logistics services, both globally and within Vietnam The predominant trend in the 2023 logistics market was the shift towards services offered by shipping companies, with an increasing number of these companies engaging in providing warehouse and road transport services Domestic shipping companies like Vsico and GLS also expanded their investment portfolio with new projects focused on warehouses and road transport This reflects the need for diversifying revenue sources and optimizing business efficiency amidst a significant decline in maritime business

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Kim ngạch xuắt, nhập khẩu hàng hóa Tốc 46 tang/giam

(Ty USD) so voi cùng kỳ năm trước (%)

Trung Hoa Ky Han ASEAN EU Nhat Trung HoaKỳ Han ASEAN EU Nhật Quốc Quốc Bản Quốc Quốc Bản

@ XK hang hoa E1 NK hàng hóa

Nguồn: Tổng cục Thống kê

3.1.2.2 The current status of the logistics industry in Vietnam:

In 2023, logistics service enterprises began to delve deeper into the concept of green logistics or sustainable development, aligning with the general trend of the entire Vietnamese economy towards balancing net emissions It is expected that this will be a prominent trend in the coming years as countries worldwide start implementing carbon footprint measurements for imported goods However, currently, only a few logistics service enterprises have undergone digital transformation beyond level 3, mainly concentrated in large-scale enterprises such as Tan Cang Sai Gon, Gemadept, Viettel Post, Vietnam Post, DHL, FedEx, and port companies under the Vietnam Maritime Corporation Nevertheless, 90% of logistics enterprises in Vietnam are still m the digitalization phase, indicating that digital transformation in this industry is in its early stages and has not received adequate investment

Hình 7.6: Cấp độ CĐS của các doanh nghiệp dịch vụ loqistics Việt Nam hiện nay

Nguồn: Ban Biên tập Báo cáo Logistics Việt Nam 2023

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In summary, Vietnam's logistics industry faces several challenges: the direct impact

of reduced manufacturing and import-export activities in 2023 on the demand for logistics services; escalating customer demands for service quality, which exert significant pressure, particularly as the capacity and scale of logistics service providers remain limited Information and data regarding logistics fall short of meeting the needs of both regulatory agencies and businesses Despite the recognition and attention given to digital transformation, its practical implementation is still in its early stages due to challenges related to funding, human resources, and managerial experience

3.1.3 The recovery of the logistics industry after the Covid-19 pandemic:

In 2023, according to Precedence Research, the global logistics market reached nearly $9 billion USD, and it is anticipated to rise to $18.23 billion USD by 2030

Nguồn: Precedence Research

The logistics and warehouse service market continues to experience high demand growth, with an annual compounded growth rate of 4.1% (according to the IT Contract Logistics Report, 2023), reaching a market scale of nearly 300 billion euros in 2023 The primary market drivers are in the Asia-Pacific region Meanwhile, North America and Europe, despite recovering from the Covid-19 pandemic, still maintain a stable growth rate of around 10% per year due to the quality of infrastructure and strong connectivity between transportation modes

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335,057

284,458 |

Nguồn: IT Contract Logistics Report, 2023

3.2 The industry’s sensitivity to the business cycle:

3.2.1 The logistic industry's degree of operating leverage (DOL): The total revenue from 2021 to 2022 of Transimex Logistic Joint Stock Company increased by 57,298,430,747 VND, a 55.5% rise compared to 2021

In 2021, the Earning Before Tax (EBT) was 6,021,296,938 VND, with interest

expenses for the year at 297,945,213 VND Consequently, the EBIT for the company in

2021 was 6,319,242,151 VND

By 2022, the Earning Before Tax (EBT) reached 16,290,938,979 VND, and the interest expenses for the year were 627,661,328 VND, leading to an EBIT of 16,918,600,307 VND

From these figures, the company's operating leverage (DOL) concerning the economic cycle can be calculated at 1.10% Therefore, the conclusion drawn regarding Transimex Logistic JSC's DOL 1s that if revenue increases by 1%, the company's EBIT will increase by 1.10%, and vice versa

3.2.2 The logistic industry's degree of financial leverage (DFL):

In 2022, Transimex Joint Stock Company reported an Earning Before Tax (EBT) of 16,290,938,979 VND The interest expense for the year amounted to 627,661,328 VND, resulting in an EBIT (Earnings Before Interest and Taxes) of 16,918,600,307 VND The company's financial leverage effect (DFL) in 2022 was 1.04% A DFL greater than | implies that the company's net profit fluctuates more in response to changes in EBIT If

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the company's sales increase, the profit after taxes could potentially rise more significantly; however, if sales decrease, the financial risk could elevate

3.3 Industry life cycle:

Over the course of more than 30 years, Vietnam's logistics service sector has transitioned through its initial development stages However, in recent years, the logistics industry in Vietnam has been affected by the global economic downturn as well as the impact of the Covid-19 pandemic By the beginning of 2023, the logistics industry can be delineated into two phases: Recession and Recovery

3.3.1 Declining phase:

This period spans from the end of 2022 until the conclusion of the second quarter of

2023 The primary cause is the global economic downturn, particularly in major trading partners such as the United States, the European Union, China, among others, which are key trading partners of our country The GDP growth of these economies has decreased compared to pre-Covid-19 pandemic levels, leading to a decline in consumption and import-export turnover The logistics industry is profoundly affected by international trade activities and global demand Our country's total 1mport-export turnover notably decreased over three consecutive quarters from the fourth quarter of 2022 to the second quarter of 2023, with respective reductions of 6.9%, 13.8%, and 16.1% This decline is considered the lowest in many years and is even weaker than the period during the Covid-

19 pandemic in Vietnam

3.3.2 Recovery phase:

Starting from the third quarter of 2023, in conjunction with the domestic economic recovery, international trade activities gradually regained momentum Import and export began to rebound from July, demonstrating a positive growth rate from September through October The recovery of both the U.S and Chinese economies made significant contributions to the logistics industry during this period According to the General Statistics Office (GSO), freight transportation increased by 14.4%, reaching 1,888.3 million tons, with a turnover of 402 billion tons/km in the first 10 months of the year The

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highest growth rates were observed in maritime and road transportation, with increases of 19.8% and 13.3%, respectively, compared to the same period last year

THREAT OF A 3,

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3.4.1 Threat of new entrants:

The legal barriers for entry into Vietnam's logistics industry are relatively low Vietnam adheres to commitments regarding the liberalization of logistics services within the WTO and ASEAN integration, presenting numerous opportunities and challenges for the logistics sector This sector is considered a crucial pillar, contributing 4.5% to GDP growth in 2022 Some types of logistics services do not demand high initial capital investment, which means there are opportunities for small businesses with low assets and investments to enter this market

The majority of businesses entering the logistics market are new players; they are still in the developmental phase, exploring ways to exploit and introduce new business models These enterprises understand the need to identify their unique advantages to penetrate the market

Presently, existing logistics companies are also potential competitors, offering similar services to some extent Hence, price competition in logistics services is currently

intense

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In this era of Industry 4.0, integrating technology into logistics systems enhances business operations’ efficiency However, competition from industries with greater potential in technology remains the biggest challenge E-commerce companies are expanding into warehouse and delivery services Some collaborate with logistics companies to enhance services, creating new competitive models

In summary, companies in the logistics field need to constantly update their technology and seek unique advantages to maintain and strengthen their position in the logistics market The level of threat from new competitors for companies in the logistics industry averages around 3/5 points

3.4.2 Bargaining power of buyers:

The fundamental potential customer segments include manufacturing businesses, e- commerce enterprises, manufacturers, and distributors Their purchasing behavior tends to lean towards long-term commitment By excelling, it's entirely possible to earn their trust and secure long-term contracts However, there is significant competition among logistics companies in the same field The majority of revenue for these logistics companies comes from providing transportation and delivery services to their customers

Maintaining a positive relationship with customers and offering value-added services can help retain customers and prevent them from switching to other providers Logistics businesses in Vietnam face relatively lower pressure compared to foreign companies Within logistics services, there are two main customer groups: retail customers and large customers typically distributors Large customers tend to exert higher pressure on providers regarding pricing, timing, service quality, etc Vietnam's logistics companies primarily serve the retail customer group and domestic customers rather than large customers, hence facing relatively lower pressure Nevertheless, the retail customer demands for service quality are progressively increasing 1n line with market trends

The negotiating power of customers in the logistics industry is highly regarded, reaching a rating of 5/5 points

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3.4.3, Bargaining power of suppliers:

The act of retaining current suppliers, diversifying FDI sources, and enhancing infrastructure and labor productivity will assist the company in maintaining a positive negotiation power with suppliers As for the global supply chain, there has been more diversity, no longer solely reliant on the primary trade partner, China, as it was in the past

A shift from globalization to regionalization is occurring, necessitating clear recognition because Vietnam is part of this supply chain, presenting both opportunities and accompanying challenges

Vietnamese logistics enterprises face significant pressure from suppliers due to resource constraints In the transportation sector, shipping companies hold substantial leverage over customers Meanwhile, most Vietnamese logistics businesses lack physical infrastructure, primarily relying on outsourcing with small service scales, making it difficult to negotiate effectively with suppliers

Supplier diversification is the future trend of logistics, but Vietnam encounters a major challenge in its labor force China is losing efficiency in the supply chain, and Vietnam needs to swiftly respond to seize the opportunity India poses as a strong competitive rival; thus, Vietnam needs to enhance competitiveness by attracting FDI, improving infrastructure, reducing delivery times, and elevating the quality of 'Made in Vietnam’ products

The negotiation power of suppliers in the logistics sector is rated at 4/5 points

3.4.4, Threat of substitute products or service:

The logistics industry is highly diverse, offering numerous products and services tailored to specific customer requirements and business models One of the significant competitive pressures in the logistics field 1s the transformation driven by technology companies, particularly in the 5PL e-commerce segment These enterprises, such as Amazon, Alibaba, Viettel, and FPT, possess technological advantages, creating strong competition with traditional logistics firms The digitization of the logistics sector is a

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crucial trend, optimizmg supply chain operations and efficiently handling large transaction volumes

Digital technology aids in automating transportation processes, warehouse management, and utilizing data for intelligent decision-making, enhancing flexibility, productivity, and cost reduction Through digitization, logistics companies can offer faster, more optimized, and competitively priced services, bolstering trust among customers and partners The trend toward sustainability, or 'green logistics,’ 1s also gaining priority, aiming for sustainable development and reducing emissions in the logistics industry

Despite facing threats from technological business transformations and the diversity within the logistics sector, companies in the logistics field are actively adopting digital technology and expanding their services to maintain competitiveness Development and enhancement plans in 2023 are positive factors The threat posed by substitute services to the existing services offered by companies in this sector is relatively high, rated at 4/5

points

3.4.5 Degree of rivalry:

The reality indicates that Vietnamese logistics enterprises are currently lagging due

to weaknesses such as relatively high service costs and somewhat lower service quality in the face of intense market competition

Vietnam has around 89% of domestic logistics enterprises However, despite the dominance in quantity, these local enterprises only hold about 30% of the market share The remaining share belongs to foreign enterprises because Vietnamese companies mainly operate on a smaller scale, facing limitations in terms of capital, workforce, international operational experience, and the lack of integration within the supply chain between logistics service providers and import/export businesses

According to the Vietnam Logistics Business Association (VLA), many Vietnamese companies like Transimex, Sotrans, and Tan Cang Sai Gon have evolved into major logistics firms, providing 3PL services and demonstrating international competitiveness

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The Vietnamese government has actively directed efforts to enhance mechanisms, policies, and infrastructure within the logistics sector Thanks to these initiatives, Vietnam's logistics industry is expanding and improving its capabilities

As per the World Bank's ranking, Vietnam stands at 64/160 countries in terms of logistics development and ranks 4th in the ASEAN region, following Singapore, Malaysia, and Thailand Agility's assessment for 2022 positioned Vietnam 11th among the top 50 emerging global logistics markets The logistics sector in Vietnam is rapidly growing at an annual rate ranging from 14-16%, with an estimated scale of about $40-42 billion USD per year

To sum up: The level of competition within the logistics industry in Vietnam appears

to be high, primarily due to competition among leading companies The rapid development of Vietnam's logistics industry significantly contributes to this competitiveness Therefore, the level of competition is rated at 4/5 points

4, COMPANY ANALYSIS AND STOCK VALUATION:

4.1 COMPANY ANALYSIS:

4.1.1 Transimex Logistic Joint Stock Company introduction: Transimex Logistic Joint Stock Company (Transimex Logistics Corporation) is a joint-stock transport company that evolved from the transformation of the Foreign Trade Delivery and Transportation Limited Liability Company, originally part of the Transportation Division of TRANSIMEX-SAIGON Company (now known as Transimex Corporation Joint Stock Company)

About the company’s history on the stock market in 2022:

e January 10, 2022: Delisted from UpCoM to be listed on HNX

¢ January 20, 2022: First trading day on HNX with a price of VND 11,400 per share

e June 2, 2022: Transimex Transport Jomt Stock Company changed its name to Transimex Logistics Jomt Stock Company

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After more than 10 years of establishment and development, the company has continuously grown in both scale and quality, improving the efficiency of business operations and gaining increasing trust from customers both domestically and intemationally With an annual growth rate ranging from 10% to 12%, the company 1s among the top enterprises in the domestic transportation sector in Vietnam

+ Partner network: the company still

maintains a stable amount of goods

from key customers such as SLV,

Pepsico, Nestle, , customers from the

parent company's department,

customers of partner companies

+Transportation optimization: The

company always optimizes shipping

routes to minimize transportation

distances and travel time

+ Diversify business types for small

truck fleets: applying technology to

vehicle coordination, cruise control for

smell truck fleets, container trucks are

the most efficient in terms of NNL, the

fastest and safest delivery time to

customers

+ Invest in advanced and

environmentally friendly solutions:

use clean fuels, find renewable energy

to use such as solar and wind energy

in operation

+ Minimize noise and air pollution:

The company minimizes noise and air

pollution by using advanced

technology and reducing the speed of

vehicles

WEAKNESSES

- Time constraints: During the

transportation of goods, delivery time

glitches may occur due to uncontrollable factors such as weather, treffic accidents, or

complicated customs processes

- Frequent supply chain disruptions:

changes in energy and trensportation prices, or even fluctuations in international markets can significantly impact @ company's operations

- High costs: incur many costs during operation such as investing in

warehousing and costs incurred

during transportation such as customs:

fees, insurance, taxes

- Fierce competitors: competitors

have investment in technology, increase service quality, reduce prices

to gain market share

OPPORTUNITIES

©

+ Strengthening global services:

marketing, finding new opportunities

and expanding the scope of activities

to be able to compete effectively in

the international merket

4Application of new technologies:

research and apply new technologies

to optimize your operations, improve transportation efficiency and reduce costs

+ Need to develop new services: for each separate commodity: for

example, record storage services,

logistics services for pharmaceutical goods - medical products,

+ Improve transport infrastructure

and speed up customs procedures:

develop the freight market and

increase the role of air transport,

especially in key economic zones and

remote areas On the other hand, institutions such as customs procedures, administrative reform,

eccelerating the process of deep

integration continue to be strengthened andj

THREATS

~ Legal risks: highly dependent on

Vietnamese laws: Enterprise law, Securities law and legal documents,

Decrees, Circulars and documents

related to transportation and logistics activities

- Competitive risk: facing many competitors with lerge copital scale,

high technology level and long

operational experience in the

Industry In addition, there are foreign

companies with strong financial

potential and developed science and technology

~- Raw material price risk: fluctuations

in oil and gasoline prices on the world market can affect ¢ company’s profit

margin and service prices

- Human resource risk: lack of Qualified human resources, ICT,

English to meet requirements in the context of industry 4.0

—A —

4.1.3 Competitive strategy:

To achieve the goal of becoming a leading company in the comprehensive logistics industry and contribute to expanding Vietnamese goods to international and regional markets, Transimex has outlined the following business strategies:

@ Enhance the exploitation of existing infrastructure: Utilize current facilities such as Cang ICD Transimex, TMS DC Distribution Center, Transimex

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Logistics Center in Da Nang, and the Logistics Center in the High-Tech Zone, Ho Chi Minh City

@ Further intensify 3PL (Third-Party Logistics) services: Strengthen and expand activities related to providing comprehensive logistics services

@ Focus on sustainable development in core business sectors: Concentrate on expanding and sustaining the core business areas of the company

@ Expand the service network nationwide, particularly in key provinces and cities: Establish a stronger presence and coverage in important regions across the country

@ Invest in financially robust companies with strong infrastructure: Invest in companies that can complement and enhance the logistics service supply chain

@ Collaborate with industry peers: Form strategic alliances and collaborations with other companies in the same industry, fostering mutually beneficial partnerships

@ Optimize service quality to meet customer needs: Strive to meet customer requirements by optimizing service quality

@ Implement advanced management systems: Execute and apply advanced management systems both domestically and internationally

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4.1.4 Financial situation of the company:

4.1.4.1 Asset situation:

Đơn vị: triệu đồng

Tài sản ngắn hạn 37.054 86.253 232,78% 49.64% 56,49% Tài sản dài hạn 37.594 66.436 176,72% 50,36% 43,51%

Towards the end of the year, the long-term fixed assets of the company increased rapidly (around 55%) as TOT invested in additional transportation vehicles to facilitate cargo circulation Consequently, this contributed to the increase in revenue and post-tax profit The TOT leadership will continue to play a pivotal role, investing in more transportation vehicles and machinery and equipment in the coming year

4.1.4.2 Liabilities Situation:

Đơn vị: triệu đồng

Nợ ngắn hạn 11.642 80.067 687,74% 100,00% 97,7%

Nợ dài hạn - 1.875 - - 2,29% Téng nợ phải tra 11.642 81.942 703,84% 100% 100%

Based on the above indicators, 1t is evident that the total liabilities of the company in

2022 have experienced significant fluctuations compared to 2021 The main reason for

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this fluctuation is the reopening policy of buying and selling after the prolonged Covid period from 2020-2021, which weakened the global economy As the demand for cargo transportation from customers continues to rise, companies need to increase their capital structure, leading to an increased demand for short-term borrowing to meet business operational needs

Short-term liabilities accounted for approximately 97.7% in 2022, representing the majority of the total liabilities This 1s mainly due to the substantial increase in short-term payables to suppliers and short-term borrowings The short-term payables to suppliers are primarily payments made by TOT to Transimex Corporation - the parent company, and related parties to support its transportation activities Additionally, long-term debts of TOT were incurred during the period for investing in fixed assets such as machinery and transportation vehicles, generating additional profits for TOT and its shareholders

4.1.5 Financial Ratio Analysis:

4.1.5.1 Financial Ratios for Liquidity - Liquidity Ratio:

Current Ratio = Current Assets / Current Liabilities

The current ratio is an indicator that shows how much assets a company can convert into cash to ensure the payment of short-term liabilities This ratio measures the company's ability to repay short-term debts and also assesses liquidity by dividing the current assets and short-term investments of the company by its current short-term

Quick ratio = Current Asset / Current Liabilities The quick ratio is a financial metric used to assess a company's ability to quickly pay off its short-term debts by converting short-term assets into cash without depleting the inventory The higher the quick ratio, the greater the company's ability to swiftly pay off short-term debts, and vice versa In practice, when the quick ratio of a company is > 1, its ability to quickly pay off short-term debts is considered high, and conversely

After deducting inventory, the quick ratio of the company over the years has been greater than 1, indicating a high liquidity and readiness to pay off debts when due Although there was a growth trend between 2018-2019 and 2020-2021, this ratio declined

in 2022 due to a significant increase in short-term assets and short-term debts

4.1.5.2 Activity ratio:

Receivables Turnover Ratio = Net Sales / Average Accounts Receivables

This index is used to evaluate the efficiency of recovering the accounts receivable of

a business When the average collection period is high, it indicates that the company is recovering its accounts receivable quickly and efficiently, and vice versa

Inventory turnover ratio = Cost of good sold / average inventory

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The financial index used to assess the effectiveness of inventory management within

a business A high average inventory turnover indicates that the business is recovering inventory quickly and efficiently, and conversely

at 392.95 (in 2022), This indicates that the inventory is gradually circulating into the market Logistics stands out as one of the highly promising markets

Asset turnover = Net Sales / The average of total assets

The financial metric used to evaluate the efficiency of a company’s asset utilization

in generating revenue, or in other words, the number of times a company's assets are converted into revenue within a specific period of tim

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in the last 5 years, showing that Transimex Logistic is not using assets effectively But by

2021, this number has increased to a significant level when one dollar of business assets generates 1.41 revenue To make this significant change, Transimex increased company revenue from 72 billion VND to nearly 160 billion VND (2019-2022) In addition, the main option is effective inventory management Transimex has implemented this measure

by minimizing inventory, typically in 2022 the amount of unexported goods will reach a 5-year low of about 253 million amount of inventory

4.1.5.3 Capital structure and financial risk:

Long-term debt to total assets ratio = Long-term liabilities / Total Assets

The measure assessing the proportion of total company assets funded by creditors The higher this ratio, the greater the use of other people's money to generate profits

Liabilities to equity ratio = Liabilities /Owners equity

Chỉ số tài chính dùng để đánh giá mức độ sử dụng đòn bây của một công ty cho biết mức độ rủi ro liên quan dén cach thức thiết lập và vận hành cấu trúc vốn của công ty Tỷ

lệ này có thê được sử dụng đề đánh giá khả năng thanh toán nợ của công ty Tỷ lệ D/E cảng cao thì công ty sử dụng đòn bây tài chính càng nhiều đồng nghĩa với mức độ rủi ro

Equity to total capital ratio = Owners equity / Total equity

The equity ratio over total capital is used to measure the stability of capital increase

In addition to the capital contributed by shareholders and capital reserves, equity also contributes to creating reserves for equity and surplus (including retained earnings of the company) This capital source does not need to be repaid, so the higher this ratio, the more favorably a company is evaluated Essentially, this ratio serves a similar purpose to the debt ratio in assessing

2022, the lending rates remained high, impacting the equity-to-total-capital ratio Therefore, TOT needs to minimize reliance on equity at the lowest possible level to mitigate risks for the company

4.1.5.4 Operating profit indicators:

ROS = EAT / Net Sales

The Return on Sales (ROS) ratio indicates how much profit a company makes for every one unit of net revenue earned from its business operations It represents the percentage of company profit compared to total revenue A higher ROS reflects that a company is operating efficiently and capable of generating higher profits, indicating substantial profitability