Contents

I. Introduction about DHG Pharmaceutical Joint Stock Company.........................................2

1.1. General information..............................................................................................................2
1.1.1. Business information.....................................................................................................2
1.1.2. Listing information........................................................................................................2
1.2. Milestones.............................................................................................................................2
1.3. Main business scope.............................................................................................................3
1.4. Contact..................................................................................................................................3
1.5. Financial statement details for the years 2020 - 2022..........................................................3
1.5.1. Balance sheet.................................................................................................................3
1.5.2. Income Statement..........................................................................................................5
1.5.3. Statement of Cash Flow.................................................................................................6
II. Analysis......................................................................................................................................8
2.1. Sources and uses of cash.......................................................................................................8
2.2. Standardized Financial Statement.........................................................................................8
2.2.1. Common-Sized Balance Sheet......................................................................................8
2.2.2. Common-Sized Income Statement..............................................................................11
2.3. Financial ratio.....................................................................................................................12
2.3.1. Liquidity ratio..............................................................................................................12
2.3.2. Long-term solvency ratio.............................................................................................12
2.3.3. Turnover ratio..............................................................................................................13
2.3.4. Profitability ratio..........................................................................................................15
2.3.5. Marketability ratio.......................................................................................................15
III. Dupont analysis.....................................................................................................................16
IV. Conclusion and recommendation........................................................................................17
V. Reference.................................................................................................................................19
I. Introduction about DHG Pharmaceutical Joint Stock Company
1.1. General information
1.1.1. Business information
Name: DHG Pharmaceutical Joint Stock Company
Abbreviation: DHG Pharma
Industry: Pharmaceuticals
Date of incorporation: 02/09/2974
Authorized capital: 1.307.460.710.000 VNĐ
Business license: 1800156801
Tax code: 1800156801
1.1.2. Listing information
Listing date: 21/12/2006
Exchange: HOSE
Chartered capital: 1,307,460,710,000 VND
Listed shares: 130,746,071 VND
Shares outstanding: 130,746,071 VND
1.2. Milestones
 02/09/1974: Hau Giang Pharmaceutical Joint Stock Company was formerly known as
2/9 Pharmaceutical State-owned Enterprise, was established under the Southwest
Health Department.
 1975: Renamed as Tay Cuu Long Pharmaceutical Company.
 1976: Renamed as Pharmaceutical Company under Hau Giang Health Service
Department.
 1976-1979: Pharmaceutical Company is splited into 03 separate units: 2/9
Pharmaceutical enterprise, Pharmaceutical Company and Medicine Material Company
under Decision 15/CP of Government.
 1979: 03 above units wered merged into Hau Giang Pharmaceutical Union Enterprise.
 2004: Equitized and transformed into Hau Giang Pharmaceutical Joint Stock Company
with an initial charter capital of VND80 billion.
 2006: Listed on HCM Stock Exchange (HOSE).
 16/09/2010: Charter capital was increased to 269,129,620,000 VND

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 03/08/2011: Charter capital was increased to 651,764,290,000 VND
 25/06/2012: Charter capital was increased to 653,764,290,000 VND
 27/06/2014: Charter capital was increased to 871,643,300,000 VND
 28/07/2017: Charter capital was increased to 1,307,460,710,000 VND
1.3. Main business scope
 Manufacturing and trading pharmaceuticals, medical materials and equipment,
functional food and cosmetics, and providing relevant healthcare services.
 Exporting and importing pharmaceutical production equipment, drug materials,
medicines and medical facilities under regulations of Ministry of Public Health.
 Performing technology transfer, research and product development activities.
 Others under the business registration certificate.
1.4. Contact
Address: 288 Nguyen Van Cu Distrcit, An Hoa Ward, Ninh Kieu, Can Tho
Telephone: (84.292) 389 1433
Fax: (84.292) 389 5209
Email: dhgpharma@dhgpharma.com.vn
Website: https://www.dhgpharma.com.vn
1.5. Financial statement details for the years 2020 - 2022
1.5.1. Balance sheet
Unit: VND
ITEMS 2022 2021 2020
ASSET
A. CURRENT ASSET 4,218,772,327,716 3,720,882,994,624 3,475,797,124,506
I. Cash and cash equivalents 34,017,813,791 36,963,568,653 68,051,723,905
1. Cash 34,017,813,791 36,963,568,653 68,051,723,905
II. Short-term financial investments 2,355,000,000,000 2,110,000,000,000 2,074,000,000,000
1. Held-to-maturity investments 2,355,000,000,000 2,110,000,000,000 2,074,000,000,000
III. Short-term receivables 550,503,358,957 488,071,438,874 496,020,199,824
1. Short-term trade receivables 320,497,731,135 364,370,011,094 414,158,635,702
2. Short-term advances to suppliers 188,966,257,070 97,053,188,601 69,081,209,633
3. Short-term loan receivables 257,622,204 270,872,204 380,542,458
4. Other short-term receivables 81,417,096,027 75,634,454,278 63,309,022,728
5. Provision for short-term doubtful (40,635,347,479) (49,257,087,303) (50,909,210,697)
debts

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IV. Inventories 1,250,833,919,138 1,072,605,509,022 826,585,429,976
1. Inventories 1,251,913,300,453 1,073,963,422,414 827,650,041,659
2. Provision for devaluation of (1,079,381,315) (1,357,913,392) (1,064,611,683)
inventories
V. Other short-term assets 28,417,235,830 13,242,478,075 11,139,770,801
1. Short-term prepayments 12,401,507,959 6,603,126,396 4,042,674,685
2. Value added tax deductibles 16,015,727,871 4,516,420,536 7,078,253,656
3. Taxes and other receivables from the 0 2,122,931,143 18,842,460
State budget
B. NON-CURRENT ASSETS 949,414,175,129 893,634,073,316 966,974,205,664
I. Long-term receivables 822,061,880 642,061,880 244,240,000
1. Other long-term receivables 822,061,880 642,061,880 244,240,000
II. Fixed assets 787,387,089,074 767,930,673,967 845,372,226,657
1. Tangible fixed assets 585,574,876,927 562,150,489,910 635,287,762,316
Cost 1,481,802,489,56 1,395,439,826,90 1,395,646,660,19
0 3 2
Accumulated depreciation (896,227,612,633 (833,289,336,993) (760,358,897,876)
)
2. Intangible assets 201,812,212,147 205,780,184,057 210,084,464,341
Cost 252,779,142,186 252,779,142,186 252,779,142,186
Accumulated amortization (50,966,930,039) (46,998,958,129) (42,694,677,845)
III. Investment property 14,308,981,880 14,654,470,364 14,999,958,848
Cost 17,304,956,819 17,304,956,819 17,304,956,819
Accumulated depreciation (2,995,974,939) (2,650,486,455) (2,304,997,971)
IV. Long-term assets in progress 92,596,259,917 69,507,677,936 66,472,781,314
1. Construction in progress 92,596,259,917 69,507,677,936 66,472,781,314
V. Long-term financial investments 3,860,000,000 7,838,324,934 8,621,437,680
1. Investments in subsidiaries 13,742,460,000 13,742,460,000
2. Investment in in associates
3. Equity investments in other entities 24,108,379,057 24,108,379,057 24,282,104,800
4. Provision for impairment of long- (20,248,379,057) (30,012,514,123) (29,403,127,120)
term financial investments
VI. Other long-term assets 50,439,782,378 33,060,864,235 31,263,561,165
1. Long-term prepayments 34,594,969,043 15,525,924,704 15,232,901,753
2. Defferred tax assets 15,844,813,335 17,534,939,531 16,030,659,412
TOTAL ASSETS 5,168,186,502,845 4,614,517,067,940 4,442,771,330,170
LIABILITIES AND EQUITY
C. LIABILITIES 876,649,599,388 824,506,970,274 878,652,181,871

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I. Current liabilities 811,536,702,268 757,700,006,863 815,621,370,458
1. Short-term trade payables 364,379,191,011 201,219,543,333 252,270,552,909
2. Short-term advances from customers 44,183,901,316 24,082,624,119 20,694,112,030
3. Taxes and other payables from the 37,036,207,791 34,408,305,142 38,150,477,839
State budget
4. Payables to employees 170,724,651,834 162,249,988,636 155,266,843,391
5. Short-term accrued expenses 24,364,389,787 39,619,329,167 38,817,541,041
6. Short-term unearned revenue 34,043,466,112 49,608,540,605 49,532,335,735
7. Other current payables 1,844,519,967 2,701,326,368 1,583,049,307
8. Short-term loans 114,723,409,074 207,391,176,993 212,271,519,448
9. Bonus and welfare funds 20,236,965,376 36,419,172,500 47,034,938,758
II. Long-term liabilities 65,112,897,120 66,806,963,411 63,030,811,413
1. Long-term provision 58,827,249,515 57,297,571,580 50,102,720,849
2. Scientific and technological 6,285,647,605 9,509,391,831 12,928,090,564
development fund
D. EQUITY 4,291,536,903,457 3,790,010,097,666 3,564,119,148,299
I. Owner's equity 4,291,536,903,457 3,790,010,097,666 3,564,119,148,299
1. Owner's contributed capital 1,307,460,710,000 1,307,460,710,000 1,307,460,710,000
Ordinary shares carrying voting rights 1,307,460,710,00 1,307,460,710,00 1,307,460,710,00
0 0 0
2. Share premium 6,778,948,000 6,778,948,000 6,778,948,000
3. Investment and development fund 1,958,932,899,782 1,668,641,014,030 1,479,946,644,695
4. Retained earnings 1,018,364,345,675 807,129,425,636 769,932,845,604
Retained earnings accumulated to the 29,909,699,603 30,057,945,259 29,581,625,459
prior year end
Retained earnings of the current year 988,454,646,072 777,071,480,377 740,351,220,145
TOTAL LIABILITIES 5,168,186,502,845 4,614,517,067,940 4,442,771,330,170
AND EQUITY

1.5.2. Income Statement

Unit: VND
ITEMS 2022 2021 2020
1. Gross revenue from goods sold and 5,181,739,797,774 4,522,008,123,146 4,206,732,382,220
services rendered
2. Deductions 505,723,789,947 518,844,205,371 451,113,070,896
3. Net revenue from goods sold and 4,676,016,007,827 4,003,163,917,775 3,755,619,311,324

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 services rendered
4. Cost of sales 2,418,521,064,699 2,082,259,824,914 1,944,243,042,082
5. Gross profit from goods sold and 2,257,494,943,128 1,920,904,092,861 1,811,376,269,242
services rendered
6. Financial income 137,142,907,707 122,927,139,276 140,312,355,301
7. Financial expenses 101,162,960,616 100,163,749,092 120,578,659,294
Interest expense 12,558,694,966 12,080,103,631 14,029,596,510
8. Selling expenses 913,204,497,923 802,955,208,315 699,298,275,858
9. General and administration 268,212,758,590 257,166,882,284 302,867,557,275
expenses
10. Operating profit 1,112,057,633,706 883,545,392,446 828,944,132,116
11. Other income 9,673,632,221 1,931,180,500 5,852,677,208
12. Other expenses 22,117,946,991 20,725,055,928 11,961,520,267
13. Loss/Profit from other activities (12,444,314,770) (18,793,875,428) (6,108,843,059)
14. Profit before tax 1,099,613,318,936 864,751,517,018 822,835,289,057
15. Current corporate income tax 109,468,546,668 89,184,316,760 86,210,837,298
expense
16. Deferred corporate tax 1,690,126,196 (1,504,280,119) (3,726,768,386)
expense/income
17. Net profit after corporate income 988,454,646,072 777,071,480,377 740,351,220,145
tax
18. Basic earnings per share 7,318 5,719 5,443

1.5.3. Statement of Cash Flow

Unit: VND
ITEMS 2022 2021 2020
I. CASH FLOWS FROM OPERATING ACTIVITIES
1. Profit before tax 1,099,613,318,936 864,751,517,018 822,835,289,057
2. Adjustments for:
Depreciation and amortization of 81,001,086,959 83,876,191,955 88,226,977,934
fixed assets and investment
properties
Provisions (16,073,768,863) 7,185,116,299 18,032,361,625
Foreign exchange gain arising (6,894,188,664) (428,421,247) 100,676,355
from translating foreign currency
items
Gain from investing activities (112,318,649,197) (107,818,015,508) (138,239,915,669)
Interest expense 12,558,694,966 12,080,103,631 14,029,596,510

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3. Operating profit before 1,057,886,494,137 859,646,492,148 804,984,985,812
movements in working capital
Change in receivables 34,205,818,824 22,427,410,406 69,654,941,065
Change in inventories (177,949,878,039) (246,313,380,755) (101,120,046,803)
Change in payables 160,320,946,149 (32,417,885,879) 170,618,105,542
Change in prepaid expenses (15,714,025,517) (1,749,149,711) 12,429,581,311
Interest paid (12,557,573,654) (12,049,912,729) (14,279,236,632)
Corporate income tax paid (100,998,733,008) (99,613,058,758) (78,840,918,985)
Other cash outflows (43,908,442,589) (36,526,894,741) (38,317,458,516)
Net cash generated by operating 901,284,606,303 453,403,619,981 825,129,952,794
activities
II. CASH FLOWS FROM INVESTING ACTIVITIES
1. Acquisition and construction of (233,991,633,058) (24,562,126,487) (88,805,051,465)
fixed assets and other long-term
assets
2. Proceeds from sale, disposal of 3,334,204,498 2,277,272,726 5,238,101,817
fixed assets and other long-term
assets
3. Cash outflow for lending and (3,770,000,000,000) (2,980,000,000,000 (3,198,000,000,000
time deposits ) )
4. Cash recovered from lending 3,525,000,000,000 2,944,109,670,254 2,892,053,651,065
and time deposits
5. Cash recovered from 3,205,772,441 84,720,000 8,629,332,200
investments in other entities
6. Interest earned, dividends and 118,722,503,640 101,418,077,380 132,672,070,885
profits received
Net cash used in/generated by (353,729,152,479) 43,327,613,873 (248,211,895,498)
investing activities
III. CASH FLOWS FROM FINANCING ACTIVITIES
1. Proceeds from borrowings 737,940,850,410 794,683,347,097 736,698,389,686
2. Repayment of borrowings (830,608,618,329) (799,563,689,552) (789,093,721,992)
3. Dividends and profits paid (457,611,248,500) (522,984,284,000) (522,984,284,000)
Net cash used in financing (550,279,016,419) (527,864,626,455) (575,379,616,306)
activities
Net decreases in cash (2,723,562,595) (31,133,392,601) 1,538,440,990
Cash and cash equivalents at the 36,963,568,653 68,051,723,905 66,489,589,298
beginning of the year

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 Effects of changes in foreign (222,192,267) 45,237,349 23,693,617
exchange rates
Cash and cash equivalents at the 34,017,813,791 36,963,568,653 68,051,723,905
end of the year

II. Analysis
2.1. Sources and uses of cash
(Detailed data are presented in this sheet).
Unit: VND
ITEMS 2020-2021 2021-2022

Total Source of cash 407,865,466,352 766,268,482,658

Total Use of cash 407,865,466,352 766,268,482,658

Total Source and Use of cash in the year 2021-2022 virtually doubled the figure
for 2020-2021, which is about 766 billion and 408 billion respectively. It can be inferred
that DHG’s ability of generating and application of cash in 2021-2022 was stronger than
the previous year. An increasing high level of source of cash in 2021-2022 stemmed from
significant growth in short-term trade payables and investment and development fund,
which increased by 163,159,647,678 VND and 290,291,885,752 VND respectively.
There are something notable. The increase in trade payables proves that the
company is appropriating customer capital. This is a positive signal, but this ratio also
needs to be strictly controlled because it depends on the short-term liquidity of the
company. In addition, a considerable rise in funding for the investment and development
fund is wholly favorable, moving in the right direction, which strengthens DHG Pharma
position as a pharmaceutical research and development company. The detailed figure can
be founded in a separate excel sheet.
2.2. Standardized Financial Statement
2.2.1. Common-Sized Balance Sheet
(Detailed data are presented in this sheet).
ITEMS 2020 2021 Change 2021 2022 Change

ASSETS
A. CURRENT ASSET 78.23% 80.63% 2.40% 80.63% 81.63% 1.00%

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I. Cash and cash equivalents 1.53% 0.80% -0.73% 0.80% 0.66% -0.14%

1. Cash 1.53% 0.80% -0.73% 0.80% 0.66% -0.14%

II. Short-term financial investments 46.68% 45.73% -0.96% 45.73% 45.57% -0.16%
III. Short-term receivables 11.16% 10.58% -0.59% 10.58% 10.65% 0.07%
IV. Inventories 18.61% 23.24% 4.64% 23.24% 24.20% 0.96%
V. Other short-term assets 0.25% 0.29% 0.04% 0.29% 0.55% 0.26%
B. NON-CURRENT ASSETS 21.77% 19.37% -2.40% 19.37% 18.37% -1.00%
I. Long-term receivables 0.01% 0.01% 0.01% 0.01% 0.02% 0.00%
II. Fixed assets 19.03% 16.64% -2.39% 16.64% 15.24% -1.41%
1. Tangible fixed assets 14.30% 12.18% -2.12% 12.18% 11.33% -0.85%
2. Intangible assets 4.73% 4.46% -0.27% 4.46% 3.90% -0.55%
III. Investment property 0.34% 0.32% -0.02% 0.32% 0.28% -0.04%
IV. Long-term assets in progress 1.50% 1.51% 0.01% 1.51% 1.79% 0.29%
V. Long-term financial investments 0.19% 0.17% -0.02% 0.17% 0.07% -0.10%
1. Investments in subsidiaries 0.31% 0.30% -0.01% 0.30% 0.00% -0.30%
2. Investment in in associates 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
3. Equity investments in other
0.55% 0.52% -0.02% 0.52% 0.47% -0.06%
entities
4. Provision for impairment of long-
-0.66% -0.65% 0.01% -0.65% -0.39% 0.26%
term financial investments
VI. Other long-term assets 0.70% 0.72% 0.01% 0.72% 0.98% 0.26%
1. Long-term prepayments 0.34% 0.34% -0.01% 0.34% 0.67% 0.33%
2. Defferred tax assets 0.36% 0.38% 0.02% 0.38% 0.31% -0.07%
100.00 100.00
TOTAL ASSETS 100.00% 0.00% 100.00% 0.00%
% %
LIABILITIES AND EQUITY
C. LIABILITIES
I. Current liabilities 18.36% 16.42% -1.94% 16.42% 15.70% -0.72%
1. Short-term trade payables 5.68% 4.36% -1.32% 4.36% 7.05% 2.69%
2. Short-term advances from
0.47% 0.52% 0.06% 0.52% 0.85% 0.33%
customers
3. Taxes and other payables from
0.86% 0.75% -0.11% 0.75% 0.72% -0.03%
the State budget
4. Payables to employees 3.49% 3.52% 0.02% 3.52% 3.30% -0.21%
5. Short-term accrued expenses 0.87% 0.86% -0.02% 0.86% 0.47% -0.39%
6. Short-term unearned revenue 1.11% 1.08% -0.04% 1.08% 0.66% -0.42%
7. Other current payables 0.04% 0.06% 0.02% 0.06% 0.04% -0.02%

9
 8. Short-term loans 4.78% 4.49% -0.28% 4.49% 2.22% -2.27%
9. Bonus and welfare funds 1.06% 0.79% -0.27% 0.79% 0.39% -0.40%
II. Long-term liabilities 1.42% 1.45% 0.03% 1.45% 1.26% -0.19%
1. Long-term provision 1.13% 1.24% 0.11% 1.24% 1.14% -0.10%
2. Scientific and technological
0.29% 0.21% -0.08% 0.21% 0.12% -0.08%
development fund
D. EQUITY 80.22% 82.13% 1.91% 82.13% 83.04% 0.91%
I. Owner's equity 80.22% 82.13% 1.91% 82.13% 83.04% 0.91%
1. Owner's contributed capital 29.43% 28.33% -1.10% 28.33% 25.30% -3.04%
Ordinary shares carrying voting
29.43% 28.33% -1.10% 28.33% 25.30% -3.04%
rights
2. Share premium 0.15% 0.15% -0.01% 0.15% 0.13% -0.02%
3. Investment and development
33.31% 36.16% 2.85% 36.16% 37.90% 1.74%
fund
4. Retained earnings 17.33% 17.49% 0.16% 17.49% 19.70% 2.21%
TOTAL LIABILITIES AND 100.00 100.00
100.00% 0.00% 100.00% 0.00%
EQUITY % %
Regarding DHG’s assets, current asset accounts for 78.23% of total asset in 2020,
increasing by 3.4% to 81.63% in 2022. Owning a significant source of short-term assets
demonstrates the company's ability to maintain uninterrupted production while also being
able to quickly respond to changes in both production and business operations. In detail,
cash and short term investment experienced a small portion of decline while short-term
receivables, inventories and other short-term asset marginally grew. The percentage of
trade receivables (10.65%) and inventories (24.2%) indicates that the company had
enough amount of goods that can satisfy the market demand. However, the company
should create a detailed business plan to avoid having an excessive amount of stale
inventory as well as policies to control the time of appropriating capital from customers.
Non-current asset constitutes 18.37% of total asset in 2022, recording a gradual decrease
over the period shown. This proportion is at an acceptable level, however DHG should
consider to at least maintain this level to keep up assets benefiting the company in the
long run.
In the aspect of equity, the table shows that the proportion of owner’s equity was
all above 80% in 2020-2022, going through an increasing trend. This figure gives the
business resource assurance without having to worry about the need for financial
leverage. All items in the short-term debt decreased except short-term trade payables and

10
short-term advances from customers, which demonstrates that the company is
appropriating capital from suppliers.
Long-term liabilities rose also assumes the company’s ability to appropriate fund.
Additionally, it represents DHG’s reputation among clients, partners, and customers.
2.2.2. Common-Sized Income Statement
(Detailed data are presented in this sheet).
Change Change
ITEMS 2020 2021 2021 2022
(20-21) (21-22)
1. Net revenue from goods sold and 100.00
100.00% 100.00% 0.00% 100.00% 0.00%
services rendered %
2. Cost of sales 51.77% 52.02% 0.25% 52.02% 51.72% -0.29%
3. Gross profit from goods sold and
48.23% 47.98% -0.25% 47.98% 48.28% 0.29%
services rendered
4. Financial income 3.74% 3.07% -0.67% 3.07% 2.93% -0.14%
5. Financial expenses 3.21% 2.50% -0.71% 2.50% 2.16% -0.34%
Interest expense 0.37% 0.30% -0.07% 0.30% 0.27% -0.03%
5. Selling expenses 18.62% 20.06% 1.44% 20.06% 19.53% -0.53%
6. General and administration expenses 8.06% 6.42% -1.64% 6.42% 5.74% -0.69%
7. Operating profit 22.07% 22.07% 0.00% 22.07% 23.78% 1.71%
8. Other income 0.16% 0.05% -0.11% 0.05% 0.21% 0.16%
9. Other expenses 0.32% 0.52% 0.20% 0.52% 0.47% -0.04%
10. Loss/Profit from other activities -0.16% -0.47% -0.31% -0.47% -0.27% 0.20%
11. Profit before tax 21.91% 21.60% -0.31% 21.60% 23.52% 1.91%
12. Current corporate income tax
2.30% 2.23% -0.07% 2.23% 2.34% 0.11%
expense
13. Deferred corporate tax
-0.10% -0.04% 0.06% -0.04% 0.04% 0.07%
expense/income
14. Net profit after corporate income tax 19.71% 19.41% -0.30% 19.41% 21.14% 1.73%
Overall, the proportion of net profit after corporate income tax to net revenue saw
an upward trend in the period 2020-2022 from 19.71% to 21.14% with only a slight
decline recorded in 2020 - 2021. It is explained by a decrease in the cost of goods sold
and a much more rapid increase in operating profit. In detail, cost of goods sold declined
0.29% in 2021-2022, which implies well-controlled production costs. Financial expenses,
selling expenses and administration expenses also witnessed a fall, which is 0.34%,
0.53% and 0.69% respectively through the figure measured in the period 2021 - 2022.

11
This demonstrates that the business has mitigate unnecessary expenses to yield potential
growth.
In addition, decrease in interest expense also demonstrated that DHG Pharma
became less dependent on financial leverage, instead making profit based on
2.3. Financial ratio
2.3.1. Liquidity ratio
Industry
Liquidity ratio Unit 2020 2021 2022 average
Current Ratio Times 4.26 4.91 5.20 2.20
Quick Ratio Times 3.25 3.50 3.66 1.40
Cash Ratio Times 0.08 0.05 0.04 0.59
NWC to Total Assets % 59.88% 64.21% 65.93%
Interval Measure Days 412.05 416.18 413.58
It is evident that the current ratio of DHG was above the industry average and
witnessed an increase in the 2020-2022 periods. This reflects the current assets that the
company currently had sufficient to pay off its short-term debts without trading off its
long-term assets that generate revenue. Additionally, quick ratio is also a positive
indicator when demonstrating that the business's liquidity is still strong, DHG even
should not be concerned about selling off inventory to pay bills on time. However, the
cash ratio was relatively low and tended to go down. It is appropriate if the current
financial and economic condition is steady; otherwise, there is a chance that the company
is likely to become insolvent. Therefore, in order to meet its payment requirements, DHG
should increase its cash capital.
The NCW to Total Assets had a tendency to increase with 58.88% in 2020 rising to
65.93% in 2022. It reveals that the company's business operations are fairly steady that
the company’s current assets were sufficient to cover its current liabilities, allowing the
company to continue to invest in other areas.
The interval measure ratio indicates the financial strength of the company, which is
the number of days that a company will survive with its current assets. In this case, the
interval measure of DHG recorded highest in 2021 (416.18 days), followed by a slight
decrease to 413.58 days in 2022. By successfully optimizing expenses and efficient use
of assets, the company can manage to run on the available resources for the longest
period of time.

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2.3.2. Long-term solvency ratio
Industry
Long-term solvency ratio Unit 2020 2021 2022 average
Total Debt Ratio % 19.78% 17.87% 16.96% 18.40%
Debt/Equity Times 0.25 0.22 0.20 0.33
Equity Multiplier (EM) Times 1.25 1.22 1.20
Long-term Debt Ratio % 1.74% 1.73% 1.49% 1.27%
Coverage ratio
1. Times Interest Earned Ratio Times 59.65 72.58 88.56 15.20
2. Cash coverage Times 59.59 72.71 88.65 113.08
Total debt to total assets experienced a downward trend, with the ratio declining
from a peak of 19.78% in 2020 - above the industry average - to 17.87% and 16.96% in
the two years that followed. This indicates that total debt was well-controlled that DHG
Pharma had enough funds to meet its current debt obligations and could provide a return
on its investment.
Debt to equity ratio of DHG Pharma also declined over the period shown and all of
the figure were below industry average. It is evident that the company has already placed
a priority on lowering financial costs, particularly the interest expense that is shown in
the Income Statement above. Because the business could support itself without taking on
excessive debt, financial strain was reduced, which in turn improved business results.
Decreasing equity multiplier over time implies that the company has gradually
fewer debt-financed assets. That is usually seen as a positive because its debt servicing
costs are lower, which means that they will not have to generate more cash flow to
sustain a healthy business.
A year-over-year decrease in a company's long-term debt ratio (1.74% in 2020 to
1.49% in 2022) suggests that DHG Pharma is gradually relying less on debt to grow its
business. This figure, however, is still slightly over the industry average, therefore the
business need to take action to better manage its long-term debt ratio.
A high times interest earned ratio demonstrates company’s ability to pay all
interest expense on its debt obligations. Given the conditions, DHG Pharma's interest
earned ratio increased significantly over the course of the time and was far higher than
the industry average. The figure for 2022 was nearly 6 times greater than industry
average, which is a profoundly positive sign.

13
 The company's ability to pay in cash has been reinforced by a rising high
proportion of cash coverage over the time presented, but DHG's cash coverage ratio was
still below the industry standard. By making this better, the business will increase
liquidity and prevent the need to sell assets to pay creditors.
2.3.3. Turnover ratio
Inventory ratio
Industry
Inventory Ratios Unit 2020 2021 2022 average
Inventory Turnover Times 2.35 1.94 1.93 2.19
Days’ Sales in Inventory Days 155.18 188.02 188.77 166.67
In 2020, the inventory turnover ratio exceeded the industry average; nevertheless,
it gradually decreased over time, reaching 1.94 in 2021 and 1.93 in 2022. As of 2022, the
industry average for days' sales in inventory is increasing, which is a negative indicator.
DHG Pharma needs to prioritize more on developing a sales strategy that encourages
product use and prevents excessive product inventories.
Receivables turnover
Industry
Receivables turnover Unit 2020 2021 2022 average
Receivables Turnover Times 7.57 8.19 8.48 5.70
Days’ Sales in Receivables Days 48.23 44.56 43.04 64.04
The efficiency with which a business is able to collect on the credit it lends to
clients is measured by the receivables turnover ratio. Over the time depicted, DHG
Pharma's turnover of receivables increased, and all of the figures were above the industry
average. As a result, days' sales in receivables fell progressively and were all below the
industry average. This is a positive indication that the business's accounts receivable
collection process is effective and that a large percentage of its high-quality clients
promptly settle their financial obligations.
Total asset turnover
Industry
Total asset turnover Unit 2020 2021 2022 average
Total Asset Turnover (TATO) Times 0.85 0.87 0.90 0.60
NWC Turnover Times 1.41 1.35 1.37
Fixed Asset Turnover (FATO) Times 4.44 5.21 5.94 1.90
DHG’s total asset turnover grew over 2020 - 2022 periods with all the figure
captured higher than industry average. This high ratio implies the effective performance
14
of the company when it can generate more revenue in comparison to the value of its
assets.
On the other hand, NCW Turnover generally decreased in the 2020 - 2021 period
before marginally increasing in the 2021 - 2022 period. The purpose of managing NCW
turnover is to control how effectively the company uses short-term assets and liabilities to
generate sales. Given the circumstances, DHG's substandard inventory management
practices are partially responsible for the decline in NWC turnover. To ensure that every
dollar of working capital is leveraged to generate a higher dollar amount of sales, the
company should push its goods-in-stock approach.
Fixed Asset Turnover is quite an important factor in regards to manufacturing
company as DHG Pharma. The company has utilized its fixed assets to create revenue for
the company in an effective manner, as seen by the high ratio for the period illustrated,
which was around three times higher than the industry average.
2.3.4. Profitability ratio
Industry
Profitability ratio Unit 2020 2021 2022 average
Profit Margin (PM) % 19.71% 19.41% 21.14% 15.53%
Return on Assets (ROA) % 16.66% 16.84% 19.13% 14.71%
Return on Equity (ROE) % 20.77% 20.50% 23.03% 18.19%
As indicated, DHG's profit margin (PM) increased over the 2020 - 2022 period and
was consistently higher than the industry average. According to the figure, the company
was able to turn a profit of 20 cents for every dollar of sales. This is really a good
indication.
Return on Assets (ROA) ratio also experienced a growing trend with 19.71% in
2020 rising to 21.14% in 2022. The proportion on ROA remained above the industry
average. As can be observed, DHG Pharma efficiently utilized its assets to produce
profits.
In addition, Return on Equity (ROE) is a good sign when it exceeds the industry
average over the past three years, with the greatest level being recorded in 2022 at
23.03%. It shows that DHG can effectively turn a profit using its equity. In conclusion,
DHG Pharmaceutical Joint Stock Company's PM, ROA, and ROE all exhibit positive
trends, indicating that the business can generate profit with its available resources.
2.3.5. Marketability ratio
Market value ratio Unit 2020 2021 2022 Industr

15
 y
average
P/E Ratios Times 19.11 19.76 11.60 11.75
Market value per share
(Updated 31/12 each VND 104,000 113,000 84,900
year)
Earnings per share
VND 5,443 5,719 7,318
(EPS)
Market-to-book Ratios Times 3.81 3.90 2.59 2.09
Market value per share
(Updated 31/12 each VND 104,000.00 113,000.00 84,900.00
year)
Book value per share VND 27,289.84 29,011.53 32,823.45
EBITDA Ratio Times 15.68 16.94 11.32

13,139,980,000,00 14,878,900,000,00 12,603,920,000,00

The enterprise value VND 0 0 0
EBITDA VND 837,752,342,338 878,341,382,257 1,113,279,306,140
The P/E Ratio for DHG marginally climbed between 2020 and 2021, from 18.38 to
19.01, before rapidly declining in 2022, when it was below the industry average. This
was caused by rising EPS and a declining market value per share throughout the course
of the time frame. It probably signifies a reduction in the investor's forecast for future
earnings growth. However, the company is still thought of as a sound operation as the
EPS value is steadily increasing.
The P/B ratio for the stated time period is consistently larger than 1 and higher
than industry average suggesting that the market value per share is higher than its book
value per share. It means that the market has high expectations for this stock and that the
company is expected to perform well in the future. As a result, investors are willing to
invest more than the company's book value in order to acquire it. The index's 1.6 times
decline in 2022, however, implies that market expectations had stabilized to some extent.
The value of the EBITDA ratio decreases over time along with the market-to-book
ratio, indicating that the company is being valued steadily closer to book value.

III. Dupont analysis

Dupont ratio 2020 2021 2022 Industry average
PM 0.20 0.19 0.21 0.1553

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 TATO 0.85 0.87 0.90 0.60
EM 1.25 1.22 1.20
ROE 20.77% 20.50% 23.03% 18.19%
Dupont analysis shows that DHG can effectively turn a profit utilizing its equity
since the company has strong profit margin, total asset turnover and equity multiplier that
is all above the industry average and tends to increase throughout the period 2020-2022.
This contributes to growing ROE, from 20.77% in 2020 to 23.03% in 2022. The equity -
multiplier ratio fell with time, showing the company's reduced reliance on financial
leverage, which is a promising indicator since profit is generated by the company’s inner
resources via production and business activities.

IV. Conclusion and recommendation

In the aspect of asset:
Over the last three years, from 2020 to 2022, DHG Pharma's total assets have tended to
rise. The company's total assets in 2021 are VND 4,614,517,067,940, up 3.87% from
2020. When compared to 2021, the rate will rise by 12% by 2022, reaching VND
5,168,186,502,845. The decline in cash and cash equivalents indicates that the company
is increasingly investing in ventures activities that do not retain much cash. However, the
business needs a strong control strategy to prevent eliminating too much liquidity.
Additionally, the company's total assets expanded throughout this time due to the
company's increased investment in machinery and long-term assets. The company's long-
term asset in progress increased by 3,034,896,622 VND (or 4.37%) in 2020 - 2021, and it
will continue to grow by 23,088,581,981 VND (or 24.93%) in 2021 - 2022.
Moreover, the business raised its inventory reserve over time, doing so by
246,020,079,046 VND (22.93%) in the years 2020–2021 and 178,228,410,116 VND
(12.25%) in the years 20–22. This demonstrates that the company's capacity to store
goods is generally strong, but given the specific requirements of a pharmaceutical
company, DHG Pharma needs to have a plan that ensures storage conditions to prevent
items from deterioration.
In the aspect of liability and equity:
It can be observed from the balance sheet as well as the common-sized balance
sheet that, throughout the period from 2020 to 2022, the company's equity always
accounted for a substantial proportion of the total capital and tended to increase. This
demonstrates a high degree of financial autonomy that can respond to capital

17
requirements. DHG can be actively engaged in achieving its goals with the aid of a secure
capital structure.
Short-term trade payables increased significantly during the years 2021–2022,
rising by 44.78% from 201,219,543,333 to 364,379,191,011. This is a good sign since
businesses can benefit from the suppliers' capital appropriation window. However, it is
apparent from the common-sized table that short-term debt always made up a sizable
share of total liabilities and equity. In 2022, long-term debt accounted for just 1.26% of
total resources, while short-term debt contributed to 15.7%. It is vital for DHG Pharma to
try to reduce short-term debt while growing long-term debt instead. The burden on the
company's payment would be lessened as a result.
In the aspect of revenue, cost and profit
From 2020 to 2022, there was an increase in the ratio of net profit after corporate
income tax to net revenue. A decline in the cost of goods sold and a significantly faster
rise in operating profit give a justification. As assessed in the period 2021–2022, financial
expenses, selling expenses, and administrative expenses all saw a decrease of 0.34%,
0.53%, and 0.69%, respectively. This illustrates the company's ability to effectively
control costs and its potential for growth. Therefore, it is advised that the business keep
minimizing expenses and growing sales to achieve profit optimization.
In the aspects of financial ratio:
Cash ratio
DHG's cash ratio for 2020 – 2022 periods is all below the 0.66 industry average,
which might put the company in financial trouble. To ensure the level of liquidity for
manufacturing and business operations, the company should decrease short-term
liabilities and promote cash and cash equivalents.
Inventory Ratio
The typical number of days in inventory is about to rise above the industry average
as a result of DHG's tendency for a lower inventory turnover ratio. A company like DHG
Pharma, which specializes in making goods that have a direct impact on consumers'
health, may find that keeping inventory on hand for an extended period of time lowers the
quality of the goods produced and raises expenses. Preservation and storage became
larger. To deal with the inventory that the company has accumulated in 2022, the
corporation should have a policy that encourages product promotion and a more realistic
production plan for the years afterwards.

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 In general, the overall evaluation of DHG Pharma's business performance is
positive. However, to secure liquidity in all situations without selling off the company's
assets, businesses need to pay close attention to raise the amount of cash and cash
equivalents. Additionally, to assure product quality and reduce unused storage expenses,
inventory management needs to be better controlled.

V. Reference
1. CafeF. Dữ liệu lịch sử. Retrieved April 12, 2023 from: https://s.cafef.vn/Lich-su-giao-
dich-DHG-1.chn#data

2. DHG. (2019). Điều lệ công ty cổ phần Dược Hậu Giang. Retrieved April 10, 2023
from: https://www.dhgpharma.com.vn/images/2019/Dieu-Le/DHG-Dieu-le-to-chuc-va-
hoat-dong-sua-doi-lan-thu-22.pdf

3. DHG. (2020). Audited Separate Financial Statements for the year ended 31 December
2021. Retrieved April 10, 2023 from:
https://www.dhgpharma.com.vn/images/2021/BaoCaoTaiChinh/DHG-Audited
%20separate%20financial%20statements%20in%202020.pdf

4. DHG. (2021). Audited Separate Financial Statements for the year ended 31 December
Vietstock. DHG Pharmaceutical Joint Stock Company. Retrieved April 11, 2023 from:
https://finance.vietstock.vn/DHG/financials.htm?tab=CSTC

5. DHG. (2022). Audited Financial Statements for the year ended 31 December 2022.
Retrieved April 11, 2023 from:
https://www.dhgpharma.com.vn/images/2023/Q1/BCTC/DHG-Audited-FS-in-2022.pdf

6. Investing.com. DHG Pharmaceutical JSC. Retrieved April 12, 2023 from:

https://www.investing.com/equities/dhg-pharmaceutical-jsc-ratios

7. Simplize. DHG. Retrieved April 14, 2023 from: https://simplize.vn/co-phieu/DHG/so-

lieu-tai-chinh#chi-so-tai-chinh

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