14 June 2013
Everpia Vietnam – Appeal from intrinsic value
In the context of economy faced many difficulties and challenges in the first half 2011: inflation, the increasing significantly of inputs and production costs, hence, many companies had profit decline, some are unprofitable and had to tighten production scale. Everpia (EVE -HSX) further confirms stable growth rate with profits increase by 164% over the same period in 2010
Proactive Strategy
According to the General Statistics Office of Vietnam, in the 1st half of 2011, the average price index has increased 16.03% compared to the same period last year, nearly three times in comparison with GDP growth rate at the same period. In that context, interest rates were continuous adjustment, accompanied by interest expense sometimes was up to 24 percent to 25 percent per year. Meanwhile, raw materials in the world market, especially fiber price was also erratic fluctuation, in 1st half 2011 the average of fiber price increased 30 percent against that of the same period. This affects on price of products, services, liquidity and business efficiency of enterprises.
Having a thorough grasp of market as well as forecasting, since late 2010, EVE had actively imported fabric and fiber materials enough to meet production requirements in 2011. In particular, EVE focused on investment with high Equity to reduce bank lending rate, and flexibility in orders management, reduced in-process inventory, reduced inventory at agents. According to Mr. Lee Jae Eun, Everpia’s Chairman and CEO, the development of sales activities in the direction toward market wide, spread all over agent system, support to deploy media activities, marketing, and upgrading agents’ scale and interior has brought good results for production operation and trading bedding goods.
In the first six months in 2011, Everpia has achieved excellent performance, in which, revenue reached VND 336.4 billion, increasing 91.7% in compare to the first half of 2010, whereby net profit reached VND 73.7 billion, increasing 164% as compared with over the same period. Thus, following the plan of year 2011, revenues and profits of the company have completed 46.8% and 56.7% respectively (see table at the end). With these performance results, EVE is a fully reasonable stock for value investors put in their portfolios.
Potential Growth
The company has officially converted into a Joint Stock Company since 2007 with total charter capital of VND 48 billion. Since then, the total company’s charter capital has increased nearly fivefold, reached over VND 230 billion, equal to USD 14.37 million. Everpia Vietnam has expanded from one factory in Hanoi (Duong Xa – Gia Lam) to two factories of which placed in Bien Hoa Industrial Zone, Dong Nai in 2010 and the other is being situated in Northern (Hung Yen) and will soon start operations in February 2012. In 2010, company sales reached VND 567 billion, increased 33.5 percent against that of 2009. Everpia Vietnam owned extensively sales channel in domestic market with over 400 agents, accounting for 30 percent market share in bedding appliances market in Vietnam.
Entering the bedding season (last six months), commonly accounts for 65 percent of total sales of a year, besides EVERON brand which has been warmly known by national consumers, a new brand namely ARTEMIS (a premium bedding brand, officially entered the market in November 2010) has also received attention and great support from customers. With production capacity and current distribution system, EVE expected that total revenue in the last 6 months will achieve VND 463 billion. Thus, the Board of Everpia Vietnam has decided to increase the sales profitability plan in 2011 of which, revenue target moves from VND 719 billion to VND 800 billion, and profit moves from VND 130 billion to VND 160 billion which is 41.1 percent increase of revenue, and 56.4 percent increase of profit from 2010.
Besides purchasing land, buildings (new factory in Hung Yen will start to operate in February 2011), and investing in production lines modernization, EVE continues to intensify sales system, expand business, apply technology, and improve management capacity and quality control. In 2011, the online business system – POS are being expected to deploy and install at all agents in Ha Noi and the company will complete the installation in all provinces in Vietnam (including Ho Chi Minh City) till June 2012. The POS will help the company manages production, distribution, tracking orders, and receiving feedbacks from market for each product, hence having initiative in production planning and sales to meet market demand, limit inventory to maximize profits.
Co-operation for Sustainable Development
With the advantage of the brand is widely known, EVE has been receiving great interests from investment funds and large financial institutions at local and abroad such as Red River Holdings (France), Vietnam Japan Fund (Japan), and FPT Capital and so on. They are professional investment organizations who plan to hold shares having good value and long-term growth potential.
The expansion of co-operation with prestigious partners at home and abroad helps EVE can use every possible means to develop and expand production and business activities, ample financial capacity ensures projects are implemented affectively and on time. Selecting right partners in both size and capacity is one of the strategic steps of Everpia which helps to raise company status in consumers market in particular and in financial market in general, creating favorable condition for company’s staffs to learn and develop their business skills and bring great benefit to shareholders.
Proactive Strategy
According to the General Statistics Office of Vietnam, in the 1st half of 2011, the average price index has increased 16.03% compared to the same period last year, nearly three times in comparison with GDP growth rate at the same period. In that context, interest rates were continuous adjustment, accompanied by interest expense sometimes was up to 24 percent to 25 percent per year. Meanwhile, raw materials in the world market, especially fiber price was also erratic fluctuation, in 1st half 2011 the average of fiber price increased 30 percent against that of the same period. This affects on price of products, services, liquidity and business efficiency of enterprises.
Having a thorough grasp of market as well as forecasting, since late 2010, EVE had actively imported fabric and fiber materials enough to meet production requirements in 2011. In particular, EVE focused on investment with high Equity to reduce bank lending rate, and flexibility in orders management, reduced in-process inventory, reduced inventory at agents. According to Mr. Lee Jae Eun, Everpia’s Chairman and CEO, the development of sales activities in the direction toward market wide, spread all over agent system, support to deploy media activities, marketing, and upgrading agents’ scale and interior has brought good results for production operation and trading bedding goods.
In the first six months in 2011, Everpia has achieved excellent performance, in which, revenue reached VND 336.4 billion, increasing 91.7% in compare to the first half of 2010, whereby net profit reached VND 73.7 billion, increasing 164% as compared with over the same period. Thus, following the plan of year 2011, revenues and profits of the company have completed 46.8% and 56.7% respectively (see table at the end). With these performance results, EVE is a fully reasonable stock for value investors put in their portfolios.
Potential Growth
The company has officially converted into a Joint Stock Company since 2007 with total charter capital of VND 48 billion. Since then, the total company’s charter capital has increased nearly fivefold, reached over VND 230 billion, equal to USD 14.37 million. Everpia Vietnam has expanded from one factory in Hanoi (Duong Xa – Gia Lam) to two factories of which placed in Bien Hoa Industrial Zone, Dong Nai in 2010 and the other is being situated in Northern (Hung Yen) and will soon start operations in February 2012. In 2010, company sales reached VND 567 billion, increased 33.5 percent against that of 2009. Everpia Vietnam owned extensively sales channel in domestic market with over 400 agents, accounting for 30 percent market share in bedding appliances market in Vietnam.
Entering the bedding season (last six months), commonly accounts for 65 percent of total sales of a year, besides EVERON brand which has been warmly known by national consumers, a new brand namely ARTEMIS (a premium bedding brand, officially entered the market in November 2010) has also received attention and great support from customers. With production capacity and current distribution system, EVE expected that total revenue in the last 6 months will achieve VND 463 billion. Thus, the Board of Everpia Vietnam has decided to increase the sales profitability plan in 2011 of which, revenue target moves from VND 719 billion to VND 800 billion, and profit moves from VND 130 billion to VND 160 billion which is 41.1 percent increase of revenue, and 56.4 percent increase of profit from 2010.
Besides purchasing land, buildings (new factory in Hung Yen will start to operate in February 2011), and investing in production lines modernization, EVE continues to intensify sales system, expand business, apply technology, and improve management capacity and quality control. In 2011, the online business system – POS are being expected to deploy and install at all agents in Ha Noi and the company will complete the installation in all provinces in Vietnam (including Ho Chi Minh City) till June 2012. The POS will help the company manages production, distribution, tracking orders, and receiving feedbacks from market for each product, hence having initiative in production planning and sales to meet market demand, limit inventory to maximize profits.
Co-operation for Sustainable Development
With the advantage of the brand is widely known, EVE has been receiving great interests from investment funds and large financial institutions at local and abroad such as Red River Holdings (France), Vietnam Japan Fund (Japan), and FPT Capital and so on. They are professional investment organizations who plan to hold shares having good value and long-term growth potential.
The expansion of co-operation with prestigious partners at home and abroad helps EVE can use every possible means to develop and expand production and business activities, ample financial capacity ensures projects are implemented affectively and on time. Selecting right partners in both size and capacity is one of the strategic steps of Everpia which helps to raise company status in consumers market in particular and in financial market in general, creating favorable condition for company’s staffs to learn and develop their business skills and bring great benefit to shareholders.
| Business Performance in 1st half 2011 | Financial Targets |
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EVE – Everpia Profit 2010: 102.3 billion Profit 1st half 2011: 73.7 billion Planned Profit 2011: 160 billion P/E: 6.13 P/B: 1.42 Dividend yield: 5.49% |