PXS Report (Update 05.2011)

Please read the disclaimers at the end of this report!

Sector: Construction and Construction materials

Petroleum Equipment Assembly & Metal Structure Co.,Ltd (HOSE: PXS)

TỔNG QUAN RECOMMENDATION: HOLD

Specific sector: The Company is one of three contractors in the country (all are members of Vietnam National Oil and Gas Group). The Company is now fully capable of undertaking fabrication of steel structures for petroleum construction works such as the upper blocks of exploration rigs, oil & gas pipeline systems... With the investment rate in the petroleum industry, workload in-charged by PXS will rapidly increase to meet the growing pace nowadays.

The Company will expand its business operation with investment in straight welded steel pipes plant in oil & gas port complex of Sao Mai Ben Dinh with the capacity of 60,000 tons per year to meet the increasing demand of steel pipes in local market, especially in the oil & gas industry. The project is scheduled for completion in 2011 and will create huge revenue from 2012 onwards for PXS.

Effective operation with gross profit margin increased year by year. Gross profit margin of PXS in 2009 reached 15.91%, which is high if compared with the average rate of the construction industry of about 10%.

Valuation: PXS’s share is valued at about 26,066 VND per share. The result is determined based on four valuation methods (FCFE, FCFF, P/E, P/B). The above price is equivalent to the P/E of about 9.47 times in 2009, and 8.84 times in 2010. This P/E rate is lower than the average P/E of construction industry in Vietnam now of about 12.5 -16.0 times.

Recommendation: We recommend investment in PXS with the price under 24,000 VND per share.

Target price (VND/share): 26,066

Current price (VND/share): n/a

52-week high:

52-week low:

26,800

24,700

STOCK DATA

Market: HOSE

Par value (VND/share): 10,000

No of shares: 20,000,000

Market cap (bil VND): 494

EPS 2009 (VND) 2,753

OWNERSHIP INFORMATION

KEY FINANCIAL FIGURES

Items 2008 2009 2010F 2011F 2012F 2013F 2014F 2015FTotal assets (bil VND) 91 171 367 539 903 1,314 1,657 1,994 Owerner's equity (bil VND) 50 50 226 370 651 1,002 1,303 1,619 Net revenue (bil VND) 136 192 420 588 1,200 1,600 1,864 1,957 Profit after tax (bil VND) 8 14 37 59 192 263 308 322 EPS (VND/share) 2,240 2,753 2,948 2,366 5,480 5,841 6,168 6,440 ROA 9.0% 8.0% 10.0% 11.0% 21.2% 20.0% 18.6% 16.1%ROE 16.4% 27.5% 16.4% 16.2% 30.1% 27.0% 24.5% 20.6%P/E 11.02 8.97 8.38 10.44 4.51 4.23 4.00 3.84 P/B 2.47 2.47 2.20 2.03 1.55 1.27 0.98 0.79

Source: PSI Research

PXS analysis report

www.psi.vn | [email protected] PSI’s reports are available on our website 2

SUMMERY OF FINANCIAL INFORMATION

BALANCE SHEET

2007 2008 2009 2010FCURRENT ASSETS 58,715,200,188 74,351,603,127 137,024,254,068 298,029,818,550 Cash and cash equivalents 4,006,792,276 5,021,128,619 35,332,074,301 38,865,281,731 Short-term financial investments - - - - Short-term receivables 13,113,785,588 40,891,931,531 75,276,321,126 230,205,001,960 Inventories 40,214,102,910 26,037,702,476 24,457,665,711 26,903,432,282 Other current assets 1,380,519,414 2,400,840,501 1,958,192,930 2,056,102,577 NON-CURRENT ASSETS 19,678,231,751 16,977,229,684 34,004,630,717 68,746,158,493 Fixed assets 17,932,539,071 16,746,447,902 32,204,314,551 66,765,810,710 1. Tangible fixed assets 17,651,485,399 15,999,006,189 23,100,414,393 56,859,277,008 2. Financial leased fixed assets - - - - 3. Intangible fixed assets - - 1,077,564,715 1,077,564,715 4. Construction in progress 281,053,672 747,441,713 8,026,335,443 8,828,968,987

TOTAL ASSETS 78,393,431,939 91,328,832,811 171,028,884,785 366,775,977,042

LIABILITIES 51,916,027,842 41,328,832,811 121,028,884,785 140,604,027,042Current liabilities 51,916,027,842 40,998,998,411 117,712,130,085 137,583,893,7421. Short-term loans - 6,084,851,009 21,978,055,261 24,175,860,787 2. Payables to suppliers 5,365,548,078 7,718,552,456 16,805,908,845 37,247,409,689 4. Advances from customers 1,862,120,412 1,858,747,185 25,948,995,200 28,543,894,720

Non-current liabilities - 329,834,400 3,316,754,700 3,020,133,300 1. Long-term loans and debts - - 2,986,920,300 2,986,920,300

OWNER'S EQUITY 26,477,404,097 50,000,000,000 50,000,000,000 226,171,950,000Owner's equity 26,433,591,037 50,000,000,000 50,000,000,000 224,329,200,0001. Chartered capital 23,087,277,059 50,000,000,000 50,000,000,000 200,000,000,0009. Undistributed earnings 3,346,313,978 - - 22,855,000,000

Other funds and owner's equity 43,813,060 - - 1,842,750,000Minority interest - - - - TOTAL RESOUCES 78,393,431,939 91,328,832,811 171,028,884,785 366,775,977,042

PROFIT & LOSS2007 2008 2009 2010F

1. Total revenue 86,683,958,419 136,186,256,276 191,545,092,520 420,000,000,000 2. Sales deductions - - - - 3. Net sales 86,683,958,419 136,186,256,276 191,545,092,520 420,000,000,000 4. Cost of goods sold 77,284,752,873 115,864,736,547 161,077,226,787 357,000,000,000 5. Gross profit 9,399,205,546 20,321,519,729 30,467,865,733 63,000,000,000 6. Financial income 71,032,254 876,762,457 427,717,674 21,000,000,000 7. Financial expense 1,529,745,611 525,533,913 827,919,096 1,680,000,000

In which: interest expense - 525,533,913 827,919,096 1,680,000,000 8. Selling expense - - - - 9. General and administrative expense 4,639,401,298 11,290,907,533 14,761,899,367 33,600,000,000 10. Net operating profit/(loss) 3,301,090,891 9,381,840,740 15,305,764,944 48,720,000,000 11. Other income 108,223,168 174,153,823 966,040,241 840,000,000 12. Other expenses 63,000,081 35,897,675 539,836,286 420,000,000 13. Other profit/(loss) 45,223,087 138,256,148 426,203,955 420,000,000 14. Profit/(loss) before tax 3,346,313,978 9,520,096,888 15,731,968,899 49,140,000,000 15. Current corporate income tax - 1,332,813,564 2,562,878,137 12,285,000,000 16. Deferred corporate income tax - - (596,382,025) - 17. Share of profit/(loss) in associates - - - - 18. Profit/(loss) after tax 3,346,313,978 8,187,283,324 13,765,472,787 36,855,000,000 Minority interest - - - - Profit after tax of shareholders of parent company 3,346,313,978 8,187,283,324 13,765,472,787 36,855,000,000 Basic earnings per share (VND) 1,449 2,240 2,753 2,948

Source: PXS, PSI Research

PXS analysis report


INVESTMENT POSITIVES

The Company has operated in oil and gas industry for a long time. With over 30 years experience in the field of mechanical engineering and construction specialized in petroleum projects, PXS increasingly proved its capacity in making the installation rig base. PXS has been assigned by Vietsovpetro to act as contractor for 60% to 80% of rig base manufacturing demand and the steel structure of the rig. Especially, PVC-MS has been entrusted and assigned by the Ministry of Defense to make fabrication and installation of almost all the DK stand (18/20 stands).

Competitive advantages are thanks to the highly specialized operation of the Company. The Company is one of three local contractors (all are members of Vietnam National Oil and Gas Group) fully capable of undertaking structural steel fabrication works, especially oil and gas pipeline construction projects and upper block base of oil and gas rigs.

Growth potentials of oil and gas construction industry remain high. In order to Implement the strategy to reach out to the sea to exploit petroleum reserves in Vietnam's continental shelf, Vietnam starts to implement processing and manufacturing self-raising drilling rig, deep water rig ( above 100m in the water ) and PXS is the local contractor to carry out this project.

Company operates effectively with increasing gross profit margin year by year. Gross profit margin of PXS in 2009 reached 15.91%, which is high rate if compared with the average construction industry about 10% in general.

In the future the Company will expand its business operations with investment in straight welded steel pipes plant in Sao Mai Ben Dinh oil services port its capacity of 60,000 tons per year in order to meet growing demand for steel pipes in the country, especially in the oil industry.

INVESTMENT RISKS

Risk of raw materials fluctuations will affect business performance of the Company as the cost of goods sold accounts for highest proportion in the total business operation expenses of PXS. Changes in prices of input materials like steel and materials for welding, cutting... affect the implementation of the Company’s profit plan. Implementation of projects of straight welded steel pipes plan in Sao Mai Ben Dinh will help the company more active and reduce dependence on input materials when the plant comes into operation. In addition, PVC-MS may also face with difficulties when investors lack capital to settle the amount of work performed and handed over.

Risks of dependence on customers: operating in highly-specialized sector, activities of the Company is limited by the development of oil and gas industry, mechanical manufacturing sector within the industry.

BUSINESS PERFORMANCE ASSESSMENT

PXS operates in mechanical engineering, construction and installation specialized

PXS analysis report


oil and gas industry. The main activity of the Company is the construction and manufacturing of more than half of the onshore fixed rig bases, the upper structure, load-bearing beam, airport ... for oil and gas exploitation, the DK bases served for national security. PXS’s traditional products are drilling structure, tanks, technological piping and pipelines for oil and gas industry. Most bases, upper block for oil and gas projects in Vietnam are manufactured by PVC-MS.

Revenue of PXS mainly comes from construction activities, accounting for more than 99% of revenue from goods and services in 2009. With over 30 years experience operating in this industry, the Company is one of the leading enterprises in manufacturing and installing rig bases and the rig's steel structures in Vietnam. The Company is contracted about 60% to 80% base manufacturing demand and steel structure of the rig as the gold Tuna base, Oriental upper structure, rig RP2 heliport and other projects of Oil and gas industry such as ensuring to provide 2-3 million m3 of gas per day, pipe works of Thi Vai port, Phu My Fertilizer Plant, the package project at Dung Quat oil refinery, onshore pipelines of PM3 Ca Mau Project ... Especially, the Company has been entrusted by the Ministry of Defense to make the fabrication and installation of almost all the DK stand (18/20 stands). In 2009, the Company signed more than 55% of its contract with Vietsovpetro and more than 22% with the parent companies - PetroVietnam Construction Joint Stock Corporation (HNX: PVX).

Table 1 - Revenue structure of the Company

99.2% 99.3%

95.1% 95.1% 95.1%

0.6% 0.2%

4.8% 4.8% 4.8%

0.1% 0.5% 0.2% 0.2% 0.2%

92%

93%

94%

95%

96%

97%

98%

99%

100%

2008 2009 2010F 2011F 2012F

Other income

Finacial income

Revenue from goods & services


Like other companies operating in construction industry, cost of goods sold always accounts for high percentage, at about 85% of the total operation expenses of PXS. General and administrative expenses also account for a large proportion of about 8%, in the future the company could implement strict expense management to improve

PXS analysis report


margins. Financial expense is not much, this means that Company use less debt and financed by itself

Table 2 – Expense structure of the Company

86%

88%

90%

92%

94%

96%

98%

100%

2007 2/1/2008 to 31/12/2008

1/1/2009 to 30/11/2009

1/12/2009 to 31/3/2010

89.2%85.1% 84.1% 85.7%

1.8%

0.4% 0.4% 0.4%

5.4%8.3% 7.7% 8.2%

0.1% 0.0% 0.3% 0.0%

Other exp/ Revenue G&A exp/ Revenue Selling exp/ Revenue

Financial exp/ Revenue COGS/Revenue


Main raw materials for the Company's operations are building materials. The Company mainly manufactures and installs stands, bearing beam and the upper block of the rig with the main investors - Vietsovpetro, accounting for nearly 80%. All construction materials are provided by Vietsovpetro, the input materials of the Company is now sub-materials accounting for about 8% -10% of the project, therefore materials changes recently do not have significant impact to business results of the Company.

PXS’s revenue in 2009 strongly increased over 2008, from 136 billion to 191 billion increasing over 40%. This is a great effort of the Company, as year 2009 was a difficult period of global economic recession and the oil industry was seriously affected.

More than 99% of PXS’s revenue structure currently are from construction and installation activities, revenue from services rendered accounts for lower proportion; however, in the future PXS’s revenue structure is likely to change, the proportion of construction will account for only about 30% -40% from 2012 onwards, the rest will come from steel pipe manufacturing (the project is being implemented at Sao Mai Ben Dinh Petroleum Port Complex) and some other projects.

By the end of first quarter 2010, the company announced its impressive revenue, reaching more than 112 billion equal to more than 58% of revenue plan in 2009 and nearly 27% of 2010 plan. The Company is highly likely to achieve its revenue plan

PXS analysis report


of 420 billion this year If input materials do not change much.

Table 3 – Revenue and profit of the Company

-

200,000,000,000

400,000,000,000

600,000,000,000

800,000,000,000

1,000,000,000,000

1,200,000,000,000

1,400,000,000,000

2/1/2008 đến 31/12/2008

1/1/2009 đến 30/11/2009

2010F 2011F 2012F

Doanh thu LNST


SECTOR ASSESSMENT

Both Organisation of Petroleum Exploring Countries (OPEC) and International Energy Agency (IEA) predicted that global crude oil demand will increase in the future along with the recovery of world economy. Besides, Vietnam is one of the emerging countries of the region which have positive growth and increasing oil demand in Vietnam in the future will be an important catalyst for the development of this sector.

Firstly, the export turnover of Vietnam's crude oil has increased significantly due to the increase in both export volumes and prices. With 3 new mines discovered in 2009, oil and gas reserves of Vietnam have increased to 127 million tons. Oil exports contribute mainly to the state budget revenues (over 20% of state budget revenues from crude oil exports, contribution to GDP around 17%). In the 2009 – 2015 period, PetroVietnam National Oil and Gas Group (PVN) will invest about $ 19 billion to expand oil processing and refinery to gradually meet the domestic demand.

Secondly, the demand for oil products was estimated to increase by 8% and enterprises in Vietnam have gradually met this demand. When Dung Quat oil refinery, Nghi Son oil refinery and factory No. 3 Long Son go into operation, Vietnam will partly meet the demand for oil products, about 40% in 1 - 2 years and 70% in 6-7 years.

Thirdly, the gas and liquefied natural gas market are still potential; demand for gas products, chemicals and fertilizers is increasing, especially in the industrial park, with an estimated increase of 10% per year.

Fourthly, the technical services (drilling and drilling rigs), transportation services, finance, petroleum insurance served for oil and gas service sector also increased,

Reve nue Prof i t af t er tax

PXS analysis report


with expansion of oil exploration and exploitation activities in both domestic and international. Growth ability of the oil industry is still in the context of the economic situation in the country as well as in the world. In coming years, Vietnam will still have to import crude oil affected by fluctuations in world oil prices. In the difficult context, the decline in global oil consumption will affect the oil export revenue of Vietnam (the value of oil exports has increased recently due to increasing world oil prices). On the other hand, Vietnam is now a net importer of gasoline. Therefore, the increasing gasoline expenses along with gasoline demand up 14 - 15% per year will be challenges for the oil industry in the short term.

Moreover, oil and gas exploitation is exploitation of natural resources, which will be gradually exhausted, some big oil mine as the White Tiger oil mine are running low. Therefore, the potential of oil and gas industry depends on the ability to search for a new mine; the possibility of cooperation with other countries in the Americas and the Middle East to explore and exploit; creating the ability to develop petroleum derivatives products such as electricity, fertilizer, gas, petrochemical ...

FINANCIAL ANALYSIS

2007 2008 2009 2010FLiquidity ratios

Current ratio 1.13 1.81 1.16 2.17Quick ratio 0.36 1.18 0.96 1.97

Capital ratiosLiabilities/Total assets 66% 45% 71% 38%Liabilities/Owner's equity 196% 83% 242% 62%

Efficiency ratiosTotal asset turnover - 1.60 1.46 1.56Receivable turnover - 5.04 3.30 2.75Payable turnover - 2.92 2.36 3.21Inventory turnover - 3.50 6.38 13.90

Profitability ratiosProfit after tax/Net sales 3.86% 6.01% 7.19% 8.78%Profit after tax/Owner's equity 12.64% 21.41% 27.53% 26.69%Profit after tax/Total assets 4.27% 9.65% 10.49% 13.71%Net operating profit /Net sales 3.81% 6.89% 7.99% 11.60%

Share ratiosEarning per share 1,449 1,637 2,753 1,843 Book value 11,449 10,000 10,000 11,216


Liquidity of the company is very good. The current ratio and quick ratio of PXS have value greater than one, to ensure minimum requirements to fulfill enterprise debt obligations when it’s due. The liquidity ratio decreases because the Company raised

PXS analysis report


capital from short-term debt in 2009, increasing 189% (from 74.35 billion to 137 billion) while the total current assets increased only 84% (from 40.99 billion to 118.31 billion). For enterprises operating in the construction industry, the construction contracts often have seasonal characteristics, especially at year end the increase in raising capital from short-term not only helps the Company meet capital needs but only reduces the cost of capital. The adjustments which reduce liquidity ratios are perfectly suitable to the characteristics of the sector.

Capital structure of PXS in 2009, the enterprise has increased capital from loans, including short-term and long-term loans. Especially, the Company's debt ratio increased from 45.25% to 70.87%, followed by the debt on equity increased from 82.66% to 154.56%. As stated above, in 2009, the Company has raised more than $ 5 billion from the loan contract for 5-year period with PetroVietnam Finance Joint Stock Corporation with preferential interest rate from 8% / year to 10.5% a year. In addition, the Company has also raised huge capital from the short-term debt such as payable to suppliers and advance from customers. This is capital with much lower cost compared with owner’s equity and loans from credit institutions. Therefore, the debt ratio increased however, capital mobilization of the Company was well performed from the short-term resources such as payable to suppliers and advance from customers, which maintains a healthy financial situation while ensuring adequate capital supply for business operations.

For operational capacity, the inventory turnover of PXS in 2009 increased from 3 to 6 times increasing 100% compared with 2008. According to audited financial statements of the company, from 2008, the average inventory turnover of the Company decreased from more than 33.13 billion to 27.25 billion, down 24% compared with 2008; while cost of goods sold increased nearly 39%, from 115 billion to 161 billion. These data gave very clear explanation for the increase of the inventory turnover, that is, in 2009, the Company has promoted the progress of construction and hand-over of projects, reducing capital accumulation in inventories (primarily in work-in-progress) helping to increase capital turnover.

The profitability ratio of PXS showed the efforts of the Company in 2008 – 2009

period. In 2009, net sales increased over 41%, profit after tax also increased more

than 68%, from 8.18 billion to 13.7 billion VND. Therefore, the profit rate and

profitability rate on owner’s equity increased significantly, from 6.01% to 7.19% and

16.37% to 27.53% respectively.

PXS’s asset structure is mainly short-term assets, accounting for more than 80% of total assets of the Company. Short-term assets mostly are short-term receivables, accounting for more than 60% short-term assets. Short-term receivables of the company are mainly receivables according to the progress of construction contracts (over 60% of accounts receivable), which is also specific characteristics in the asset structure of construction companies. The Company has no short-term financial

PXS analysis report


investments as at the end of 2009, which helps companies avoid risks of capital market with a lot of movements over time.

ADMINISTRATIVE AND HUMAN RESOURCES MANAGEMENT

PXS leadership is much experience staffs in the construction industry in general and oil and gas construction in particular. Board of Management and Board of Directors of the Company have many years in positions ranging from technical to management in the industry. The average age of BOM is 45 years old, showing that the Company is run by a team of experienced executives, which has been confirmed in a long time. This is the strength of the company.

As at 01/03/2010, the total number of employees is 802 staffs.

Table 4 - Labor structure of the Company By sex Quantiy (person) Percentage (%)

Male 750 93,52Female 52 6,48

By duration of labor contract Quantity (contract) Percentage (%)Unlimited time labor contract 422 52,621-3 year labour contract 324 40,39Less than 1 year labour contract 56 6,99

By qualifications Quantiy (person) Percentage (%)Postgraduate 1 0,12University 148 18,45Collegue 19 2,37Vocation 16 2,00Technical worker 595In which: international certificate 200Skilled worker 23 2,86Average wage per person VND 6,800,000

74,18


In general, the Company pays much attention to the key staffs by selecting and training to ensure the long-term development of human resources. As operating in the particular sector, the Company employs qualified technical workers to meet the high international standards, accounting for 74.18%, nearly 20% having university degrees and post graduate education, nearly 4.3% is college and vocational levels, the rest were skilled workers.

SOME PROJECTS AND CONTRACTS OF THE COMPANY

PXS analysis report


No Projects Location Time Total invested capital (bil VND)

1 Metal structure manufacturing yard Sao Mai Ben Dinh Maritime Base

2010 - 2011 912

2 Condominium - Office Building Complex

02 Nguyen Huu Canh, Vung Tau

2009 - 2011 274

3 Oil and gas steel pipe Factory Sao Mai Ben Dinh Maritime Base

2009 - 2011 1,450

4 Tien Giang 18h metal structure manufacturing yard

Tien Giang Petroleum Service Base

2009 - 2012 551

5 Capacity improvement for Construction equipment

- 2010 40


No Project in progress Location Time Contract value (bil VND)

1 Expansion of Can Tho Petroleum Storage (Phase 2)

Tra Noc 2 Industrial Park – Phuoc Thoi Ward. – O Mon Dist. – Can Tho City

7/2009 to 4/2010 40

2 Provide concrete piles in advance for building Nhon Trach 2 power plant

Hamlet 3, Phuoc Khanh Commune, Nhon Trach Dist, Dong Nai Province

11/2009 to 5/2010 38.2

3 Chế tạo kết cấu thượng tầng RC-1 VSP Port – Vung Tau City 12/2009 to 5/2010 2.5

4 Manufacturing rig base BK-15 of Bach Ho mine

VSP Port – Vung Tau City 12/2009 to 4/2010 24

5 Manufacturing bearing beams, the upper block structure, installation and connection of the skids on the upper block BK15 in Bach Ho mine


6 Provide supplies, equipments, construction and installation of Thai Binh Petroleum Entrepot

Vu Thu – Thai Binh Province Dec-09 7.1

7 Processing and manufacturing RC3 rig base - Dragon Mine

Vietsopetro manufacturing port – Vung Tau City

12/2009 to 7/2010 27

8 Processing and manufacturing upper block of RC3 rig - Dragon Mine

Vietsopetro manufacturing port – Vung Tau City

12/2009 to 7/2010 24

9 Manufacturing steel Structure for Nhon Trach 2 Power plant

Nhon Trach Dist – Dong Nai Province

3/2010 to 2/2011 70

10 Processing and manufacturing rig base of Dai Hung mine



Most of PXS’s contracts were completed in 2010, and it is expected to create about 420 billion revenue for the company this year. In addition, real estate project in Vung Tau which is expected to put into operation since 2011 will also create considerable revenue. The revenue structure of the company is well diversified thanks to income from straight welded steel pipes plant project, PXS acts as an investor in the form of

PXS analysis report


associates in which PXS contributes 30-40% of total investment in the project. When the project is completed, it will help the company reduce its dependence on raw materials as part of the product will be used for the construction contracts of the Company.

FINANCIAL FORECAST

Based on collected information on business operations of PXS, the development forecasts of construction industry and plan to develop petroleum sector, we forecast a result of business activities of PXS prudently as follows:

Revenue in 2010, we rely on the results of the signed and new-signed contracts as well as revenue record schedule of construction contracts, cost of goods sold of construction sector is relatively stable ... The revenue from other businesses will increase from 2011 when the oil and gas steel pipe plant project goes into operation as well as a renovation project to upgrade machinery and equipment this year.

Income from financial activities is calculated based on the amount of cash on hand, cash at bank on the estimated balance sheet. Financial expenses are based on short-term and long-term loans on the estimated balance sheet.

The detailed assumptions:

Revenue growth rate in 2010, 2011 and 2012 follows the Company’s plan; from 2013 onwards revenue growth stabilizes at 5% per year. Cost of goods sold/ revenue ratio will be at 85%.

General and administrative expenses account for 8% of total sales.

Fixed assets increased as planned; the depreciation period is expected 5-7 years on average with other types of assets, using straight line depreciation method.

Chartered capital will increase from VND 200 billion in 2010 to VND 500 billion in 2015.

Dividend rate will be at 7% per year until 2015; from 2016 onwards is 10% per year.

Items 2008 2009 2010F 2011F 2012F 2013F 2014F 2015FTotal assets (bil VND) 91 171 367 539 903 1,314 1,657 1,994 Owerner's equity (bil VND) 50 50 226 370 651 1,002 1,303 1,619 Net revenue (bil VND) 136 192 420 588 1,200 1,600 1,864 1,957 Profit after tax (bil VND) 8 14 37 59 192 263 308 322 EPS (VND/share) 2,240 2,753 2,948 2,366 5,480 5,841 6,168 6,440 ROA 9.0% 8.0% 10.0% 11.0% 21.2% 20.0% 18.6% 16.1%ROE 16.4% 27.5% 16.4% 16.2% 30.1% 27.0% 24.5% 20.6%P/E 11.02 8.97 8.38 10.44 4.51 4.23 4.00 3.84 P/B 2.47 2.47 2.20 2.03 1.55 1.27 0.98 0.79


PXS analysis report


Table 5 – Growth rate of the Company

0

200,000,000,000

400,000,000,000

600,000,000,000

800,000,000,000

1,000,000,000,000

1,200,000,000,000

1,400,000,000,000

30/11/2009 2010F 2011F 2012F 2013FTotal asset Owner's equity


Table 6 – Revenue, profit growth rate

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

0

200,000,000,000

400,000,000,000

600,000,000,000

800,000,000,000

1,000,000,000,000

1,200,000,000,000

1,400,000,000,000

1,600,000,000,000

1,800,000,000,000

1/1/2009 to 30/11/2009

2010F 2011F 2012F 2013F

Net Revenue Gross profit Gross profit margin


VALUATION

We use a combination of four methods: FCFE, FCFF, P/E, and P/B to determine the expected price for the PXS. The indicators are compared with the average construction industry and companies which have the same scale with PXS in Vietnam.

Method Price Rate Weighted averageFCFE (g = 7%, COE=15.2% ) 26,725 25% 6,681FCFF (g = 7%, WACC = 14.1%) 19,720 25% 4,930PE industry 10.1 times 29,779 25% 7,445PB industry 2.5 times 28,041 25% 7,010

Average Price 26066.15326 Source: PSI Research

PXS analysis report


DISCLAIMERS

This material has been prepared by Research department – PetroVietnam Securities Joint Stock Company. The information contained in this material is collected from reliable resources and has been carefully evaluated. Opinions, estimates, and projections constitute the current judgment of the author as of the date of this report. PetroVietnam Securities Joint Stock Company has no obligation to update, modify or amend this report or to otherwise notify reader thereof in the event any matter stated herein, or any opinion, projection, forecast or estimate set forth herein changes or subsequently becomes inaccurate, except if research on the subject company is withdrawn. Prices and availability of financial instruments also are subject to change without notice. This report is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction or as an advertisement of any financial instruments.

The financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives.

PetroVietnam Securities Joint Stock Company may have relationships with the subject company in this report and may have conflicts of interests with investors. This material is the property of Petrovietnam Securities Joint Stock Company. Actions such as printing, copying or modifying the content without permission are considered illegal.

PETROVIETNAM SECURITIES INCORPORATED

Research Department

Director of Department: Pham Thai Binh - [email protected]

Research Analyst: Truong Tran Dung – [email protected]

Market & Macroeconomic Research

Sector/Company analysis

Ninh Quang Hả i [email protected]

Nguyen Minh Hanh [email protected]

Truong Tran Dung [email protected]

Le Thanh Tung [email protected]

Ngo Hong Duc [email protected]

Ho Thi Thanh Hoan [email protected]

Ngo Thi Khanh Chi [email protected]

Nguyen Anh Tuan [email protected]

PXS Report (Update 05.2011)

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Transcript of PXS Report (Update 05.2011)