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8/13/2019 PVX Report (Update 12.2010)

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Plea se rea d the di scl aime rs at the end of this repo rt

Sector: Industry | Construction & Building Materials

PVX PetroVietnam Construction Joint-stock CorporationThe Companys share is priced at 35,700 VND/ share.

OVERVIEW RECOMMENDATION: BUY

Revenue and profit from construction activities increase sharply: PVXs average revenue from 2007-2009 increases 128% and profit

about 230% per year. In 2010, it is estimated that revenue increases72% and profit about 157%. We assess that PVX will achieve itsrevenue target.

PVX is the biggest construction company specialized in gas andoil industry in Vietnam: Due to the nature of Petroleum industry,the Corporation is the EPC general contractor for huge works of

petroleum industry such as: Ca Mau Gas-Electrical-Protein project,LPG storage, manufacturing rig base, Vung Ang Thermal Power ...The average investment rate for infrastructure of oil and gas industryis from 16,000 to 20,000 billion VND per year, which will creategreat opportunities for PVX to dominate completely the constructionand installation service segment in the industry and increase revenue,

profit in the coming time. Potentials from big real estate projects: Beside the traditional

activities, PVX is now the investor as well as the indirect investorthrough its subsidiaries, associates in many real estate projects suchas Hoai Duc Petroleum Urban Area - Ha Noi (190ha), PetroleumUniversity Area - Vinh Phuc (72ha), My Dinh 5-star hotel complex -Ha Noi (3.82 ha), Vung Tau Petroleum urban area (69.4 ha), TanVien eco-tourism area - Ha Noi (1,024ha), Ha Long eco-tourism area(1,024ha) ...

Valuation: PVX Stocks are priced based on four methods FCFE,FCFF, P/E and P/B. The price is determined at around 35,700

VND/share. This price is equivalent to P/E in 2010 at about 8.36times; this P/E is relatively attractive compared to other companiesoperating in the same sector in Vietnam and Southeast Asia.

Expected price: 35,700

Transaction price: 23,700

52 week high:

52 week low:

34,130

15,400

STOCK DATA

Market: HNX

Par value: 10,000

No of shares: 250,000,000

Market cap (bil VND): 7,500

EPS 2009 (VND) 1,383

OWNERSHIP INFORMATION

PVN 41.21%

Loc Viet FundManagement JSC

4.16%

PVFC 3.74%

Others 50.89%

KEY FINANCIAL FIGURES

2007 2008 YoY 2009 YoY 1H/2010 HoH

Revenue (mil VND) 726,816 1,808,500 148.8% 4,072,114 125.4% 2,828,812 99.5%Gross profit (mil VND) 36,106 170,377 371.8% 418,497 145.6% 359,089 178.9%

Profit after tax (mil VND) 17,799 82,020 360.8% 207,519 153.0% 370,345 520%Owners equity (mil VND) 1,500,000 1,500,000 0% 1,500,000 0% 2,500,000 66%ROA 2.09% 2.29% 9.5% 4.05% 76.8% 5.85% 431%ROE 9.87% 5.43% -44.9% 13.04% 140.1% 14.04% 401%

EPS (VND) 1,187 1,272 7.2% 1,383 8.7% 2.416 507%

Source: PVX


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Stock analys is report-PVX

when the scale construction of PVX increased to certain level, the construction workswithin the Group do not grow in line with PVX scale, then, PVX will have tocompete with other units outside the Group and the competition is more fierce.

REVIEW BUSINESS PERFORMANCES

General Overview of PetroVietnam Construction Joint Stock Corporation(PVX): PVX, previously known as United Petroleum Construction enterpriseestablished in 1983, the enterprise changed its name to PetroVietnam Design andConstruction Company (PVECC) in 1995, and then the Company was changed toPetroVietnam Construction Joint Stock Corporation with the charter capital of 150

bill ion VND in 2005. Since 2007, the Corporation operat es under the parent -subsidiary company model in which the parent company is PetroVietnamConstruction Corporation (PVX) formed on the basis of conversion andreorganization of the companies with PVNs capital contribution. In 2008, PVXincreased its capital from 150 billion VND to 1,500 billion VND, and increased to

2,500 billion VND in 2010.Main business activities of PVX are: construction, mechanical engineering,

producing materials for construction, infrastructure, real estate and financialinvestment.

Business activities of the Company:

Construction activities often contribute over 90% of the total revenue structure ofPVX, in which mainly from the companies within PVN. PVXs revenue is expectedto increase rapidly in the coming years when industrial production and real estate

business were strongly invested in order to shift the revenue st ructure in 2015.

Graph 1, 2: Revenue structure

Source: PVX

Construction activities of PVX grow rapidly in the future.

PVX currently has a lot of ongoing construction projects, which mainly come from thecompanies within PVN. Revenue structure from construction accounts for 80% of the

Revenue s t ruc tu re o f 2009 Expected Revenue s t ructure

upto 2015


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revenue structure. Construction revenue in petroleum industry accounts for 34% of totalconstruction revenue, industrial construction accounts for 20% and civil construction is 46%.Revenue structure from construction activities will gradually change when PVX becomemain contractors, general contractors for the EPC projects.

During the period 2010-2015, PVX will rapidly change the revenue structure. Up to 2015,

revenue from petroleum offshore construction accounts for 15% of total revenue structure,equivalent to approximately 5,250 billion VND. Revenue from construction of refinery

plants & petroleum factories accounts for 20% of total construction revenue, equivalent toapproximately 7,000 billion VND. Revenue from constructing storage system, transporting

petroleum products accounts for 10% of total revenue, equivalent to VND 3,500 billion.

Graph 3, 4: Revenue structure of construction activities

Source: PVX

PVX is also one of three largest EPC contractors in Vietnam together with Song Da holdingsand Vietnam Machinery Erection Corporation (Lilama), which will help PVX improve thecapacity of design and construction of larger projects in Vietnam as well as in the region inthe future. Together with the enhanced design works and construction capacity, PVX isstriving to become one of the largest EPC contractors in Vietnam in the near future,

particularly in offshore oil & gas construction projects and petrochemical refineries,chemical production, power plants, oil storage and pipeline ...

Currently, PVX has signed large contracts with the construction value of more than VND12,500 billion. These contracts have been implemented in the 2008-2011 period and a seriesof new investment projects from the Group, in which PVX will be the main contractor aregoing to be deployed based on the implementation progress of other PVXs members.

Outpu t va lue o f PVCs cons t ruc t ion in 2008 Plan fo r s t ruc tu re o f PVCs ac t iv i t i es in 2008


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www.psi .vn | research@psi .vn

PSIs reports are avail able on our website 5

Table 1: Some major construction projects, PVX have deployed in recent years and 2010

No Pro jec t sAmount

(b i l VND)

1 Polypropylene EPC Plastic Plant Dung Quat 557,0002 Cu Lao Tao Petroleum storag e 351,8523 Leveling the infrastr ucture of Nghi Son Refinery 345,5604 Petroleum Institute 809,0685 Nghe An Petroleum Building 451,6986 Phu My Hung Petroleu m finance trade center project 570,0007 Thai Binh 2 thermal power leveling site, roads in the

pr oj ect383,309

8 Nhon Trach 2 combined cycle power plant project 1,277,9759 Dinh Vu synthetic polyester factory 1,103,85010 Interior Ministry headquart er building 395,05811 North ethanol biofuels plant 1,171,70512 Vung Ang 1 Thermal Power 1,900,000

Source: PVX, PSI Research

Assessing new investment situation in the petroleum industry

With its strategy considering Vietnam National Oil & Gas Corporation as a central for thedevelopment, PVX is associated with the orientation and the development of the PVN.Currently, PVN are deploying a large number of investment projects in many fields such as

petrochemical, fertilizer production, textiles, electrical, mechanical manufacturing,transportation, real estate, ... the list of investment projects up to nearly 70 billion dollars,which are the main market for PVX to develop strongly in the future.

Table2: List of major projects that PVN plans to invest in the near future

No Pro jec t sAmount

(mi l USD) Implemen ta t ion p rogress

Project to expand the deployment of o i l & gas1 Chim Sao, Lan Do, Diamond, Hai Su Den, Hai

Su Trang, white rhinoceros mine2011

2 White Leopard, White Lion, Hai Thach- Jupiter 20123 Su Tu Nau, Thang Long, Kim Long, Ca Voi, Ac

Quy Mine2013

4 Dong Do, Thien Ung Mine 20145 Block B-O Mon gas pipeline 1,000 Implementing 2009-20116 South Con Son 2 gas pipeline Operation in 20147 Pipeline connecting East- South West

Pet rochemica l , p rocess ing and o i l t rea tmen t ,b io fue l s p ro jec t s .

25 ,008 ,2

1 Dung Quat refinery plant 3,053 Finished stage 1,implementing supportingworks

2 Dung Quat expansion refiner y plant 1,159 Implement from 2011-20163 Long Son oil refinery (refin ery plant No.3) 7,000

8 ,000Implement from 2016 - 2020

4 Ng hi Son re finery plant ( re fi ne r y No 2) 6 ,000 Imp leme n t fr om 2008-2 0145 Ca Mau Protein plant 900,2 Finished 50% of construction

volume, estimated to operatein 2012

6 Dung Quat undergr ound oil repositor y 340 Finished pre-FS project,implementing from 2010-2016

7 Long Son underground oil repositor y 310 Designing 1/500,


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implementing from 2009-20158 Ng hi Son und er grou nd oi l repo s itor y 300 Fi n ish ed Pre-FS pr oject ,

Implementing from 2010-20169 Vung Do oil undergr ound storage 400 Finished Pre-FS project,

Implementing from 2010-201610 Phu Tho biofuel plant 60 Implementing from 2009-201 211 Dinh Vu Polyester f iber plant Hai Phong 325 Implementin g from 2009-201 212 Quang Ngai biofuel plant 80 Implementing from 2009-201 2

13 Binh Phuoc biofuel plant 81 Implementing from 2010-201 214 Southern petrochemical complex 4,000 Implementing from 2009-

2014, In Long Son-Vung Tauindustrial zone

15 FSO floating warehous e in POC East Sea 350 Implementing from 2010-201 2Elec t r i c Pro jec t s 10 ,808

1 Nh on Tr ach 2 Th er ma l pow er 700 Imp leme n ting fr om 200 9-2 0112 Vung Ang 1 Thermal power plant 1,588 Implementing from 6/20093 Quang Trach 1- Quang Binh thermal power

pl ant1,500 Implementing from 2011

4 Luang Prabang hydro power plant 1,800 Implementing from 20115 Thai Binh 2 thermal power plant 1,669 Implementing from 20106 Long Phu 1 Soc Trang Thermal power plant 1,463 Implementing from 20107 Song Hau 1 thermal power plant 1708 Implementing from 20118 Hua Na hydro power plant 230 Implementing from 3/20089 Dakdring hydro power plant 150 Implementing from 2010

10 Phu Quy electric plant Implementing from 2010Por t Pro jec t 933 ,2

1 Phuoc An port 846,6 Implementing from 2010-201 22 PVTRANS Internation al port 37,3 Implementing from 2011-201 53 Hon La- Quang Binh Port 21,2 Expanding the port, phase 2

and expected to finish in 20104 Ng hi Son- Th an h Hoa Por t 28 ,1 op er at in g 150 % capacit y and

intend to expandReal es t a t e p ro jec t s (men t ioned in rea l es t a t e

rev iew)Source: PVN, PSI research

Beside construction activities in the petroleum industry, PVXs members also participated inconstruction activities outside the industry. The civil and industrial construction sector nowaccount for 60% of total construction revenue structure; However, construction activitiesspecialized in petroleum industry will increase rapidly in the near future, therefore the

proportion of construction and installation specialized oil and gas industry will increase in thecoming years, at least up to 2015. This enables PVX to improve gross profit marginsignificantly thanks to specialized construction activities, industrial installation and the profitmargin is often over 10% compared to gross profit margin from civil construction activities

around 7-8%.

Residential construction activities result from projects developing real estate, in which PVXsmember companies are investors, as well as the member companies participate in jointventure, capital contribution and participation for bidding. However, the bidding for

participation of civil construction works will not occur strongly at least until 2015 due to thefact that the projects of PVN and its member companies are large enough for PVX and itsmember units to work for a long time.


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Assess ing Vie tnams construc t ion market

In recent years, Vietnam construction industry contributes significantly to the economicgrowth, output value of construction is estimated at nearly USD 6 billion in 2009,representing approximately 5.2% of the total GDP of Vietnam. Although the industry scale in

GDP is not much but has created momentum for development in the industry such as realestate, producing building materials, basic materials as well as all for other sectors when thereis a need to expand production.

The growth rate of the industry is very high at over 10% per year for the past time and in thefuture. They are the favorable conditions for the Company to develop in the future. Growthspeed of the construction industry depends on the growth rate of total social investment,fluctuations in raw material prices and the real estate market. In recent years, both local andinternational investment has strongly grown with the average rate of 6% per year, investmentoften accounts for 34% of annual GDP.

In 2010, the estimated growth rate is about 3% equivalent to 624,392 billion VND, totalconstruction value of about 125,500 billion VND, growing rate of the construction industry.This year, it is estimated at 23.93% thanks to the recovery of the economy and strongrecovery of the construction sector.

Graph 5, 6: Value and growing rate of construction and investment in Vietnam

Source: BMI, PSI Research

In 2010, prices of input materials have strongly fluctuated especially in steel prices; the

continuous increasing and decreasing price have a strong impact on the progress ofconstruction. While the cement price in the market is relatively stable or increases slightly,cement price is strongly fluctuated in southern market, where there is limited supply but a lotof demand.

79,617

95,969101,266

125,500

148,817

170,277

191,051

211,493

232,642

12.01%

0.37%

5.52%

23.93%

18.58%

14.42%

12.20%10.70%10.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

-

50,000

100,000

150,000

200,000

250,000

2007 2009 2011F 2013F 2015F

Xy lp ( t ng)

437,702

531,987564,432

624,392696,406

776,326863,210

954,1331,011,381

24.20%

3.80%

1.00%3.00%

4.50%6.00%6.00%6.00%6.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000Tng vn u t ( t ng) Tng tr ng (%)


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Table 3: Price movement of input materials

Input materials T6-07 T12-07 T6-08 T12-08 T6-09 T12-09 T6-10cement PC40 (VND/kg) 1,055 1,120 1,400 1,000 1,065 1,100 1,250% movement 6.2% 25.0% -28.6% 6.5% 3.3% 13.6%Constructionsteel(VND/kg)

10,300 15,900 18,900 13,000 11,500 12,000 14,000

% movement 54.4% 18.9% -31.2% -15.0% 8.6% 16.7%Source: PSI Research

Assessing the projects implemented by PVN and the development potentials of constructionindustry and the position of PVX, we develop a revenue plan for construction activities in thefuture as in the chart below. Revenue strongly increases in the period 2009-2011 thanks to

business expansion of PVXs member companies as well as PVX working as a generalcontractor for EPC projects and a series of new projects started in the 2009 -2011 period.

Graph 7: Forecast revenue from construction in the coming years

Source: PVX,PSI forecast

Table 4: Forecast revenue COGs and gross profit in construction activities

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Construction ( milVND) 694,117 1,754,000 3,731,410 6,230,000 14,760,000 17,250,000 17,360,000 17,440,000 17,500,000CoGS (mil VND) 662,262 1,591,155 3,387,444 5,607,000 13,284,000 15,525,000 15,624,000 15,696,000 15,750,000Gross profit (milVND) 31,855 162,845 343,966 623,000 1,476,000 1,725,000 1,736,000 1,744,000 1,750,000

Source: PVX,PSI forecast

Mechanical activity - industrial production

Currently industrial production activities account for 1.5% of total revenue structure of PVX.However, with the expansion of mechanical operations, pipeline production, steel industry,cement, building materials and production ... the proportion of the industrial manufacturingsector will increase rapidly in the overall revenue structure of PVX in the future and isexpected to account for 30% of total revenue by 2015.

The reason for revenue restructuring mainly comes from PVNs deployment of new oil, gasmines. In the development plan from 2010-2015, there will be 14 new mines and the demand

-2,000,0004,000,0006,000,0008,000,000

10,000,00012,000,00014,000,00016,000,00018,000,00020,000,000

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Xy lp ( Tr ng) Gi vn (Tr ng) LN gp (Tr ng)


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to manufacture base for rigs, oil-gas pipelines, superstructure block, rig and piping systems inoil refinery plan is very high. Demand for pipeline is up to 292,179 tons for the 2010-2015

period and 298,271 tons for the 2016-2025 period.

Recently, the pipeline system of Vietnam-PM3 Ca Mau has been implemented with thelength of 298km. The imported cement-covered pipe system for petroleum storage- Cu LaoTao is 2.8 km long. Producing and manufacturing the pipeline project will help PVX toexpand its business to mechanical engineering, producing construction materials for the

petroleum industry.

Now PVX has some strategic development plans such as: cement plans, especially 12/9cement plant, Nghi Son refinery plant- Thanh Hoa as well as industrial, constructiondevelopment plan in Nam Thanh-Bac Nghe economic zone and in the North. The cementand steel demand is still very high as PVX and its member companies are implementingmany projects specialized in petroleum and real estate field.

In addition, PVX established mechanic plant for building new rig and repairing water drillingrig (up to 350m deep), manufacturing superpower structure, oil and gas pipe manufacturing

plant, oil and gas valve manufacturing plant, tank manufacturing plant, pipe wrap insulationfactory ... The projects also focus on the new built ships, specialized ships containing oil,

petroleum products, storage & warehouse for petroleum, petroleum transshipment port...

On July 15 2010, the petroleum pipe coating plant was officially inaugurated and put intooperation with the first pipe system of 1.5 km and diameter pipe 16 " for Nhon Trach 2 gassupply chain for power plant. Pipe coating plant is now producing 30km pipe with thediameter of 12 " for the Hai Su Trang (White Rhino) - White Tiger projects, a gas pipelinefor Lot B - O Mon, gas pipelines Thien Ung- North Con Son 2 with the signed value over

$250 million.

With the expansion to mechanical engineering services, PVS and PVX will be the 2 unitsdominating the mechanic market in the petroleum industry in Vietnam and for the projectsthat PVN are investors.

Table 5: Some major construction projects are underway

Project name Area(ha)

Capital(bil VND)

Progress

Mechanic manufacture and material for construction plant- Nghi Son- Thanh Hoa

10 148 Started 3/2010 and finished in 2010

Petroleum steel pipe manufacturing plant- Sao Mai-Ben Dinh- Vung Tau

8,5 1,490 Capacity 100,000 ton/year, started in 2010

Pipe coating plant- Phu My 1 industrial zone 15 517,44 Finished and operated 2010, total contract valueUS 250mil

Steel structure and concrete plant, Binh Phu, ThachThat, Ha Noi.

1 148,53 Concrete mixing station 380,000 ton/year,starting in 2010

12/9 cement plant, Nghe An 814 Started in 2009, expected to finish in 2011,capacity 560,000 ton/year

PVC-FECON concrete Plant, Kim Bang- Ha Nam 2,5 300 Started in 2/2010, expected to finish in 12/2010,



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The revenue growing rate will increase rapidly in the coming years thanks to a lot of projectssuch as cement production, industry steel pipe, oil-coated pipe, rig base manufacturing, upper

block, base platform, floating storage, mechanical engineering in the petroleum industry.This graph below is PVXs revenue growth in the future:

Graph 8: Revenue forecast for industrial production activities


Table 6: Forecast revenue- CoGS and profit in mechanics and industrial

production

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Mechanics- industrialproduction ( mil VND) - - 60,518 415,000 1,980,000 3,450,000 6,160,000 7,840,000 8,050,000CoGS (mil VND)

- - 49,793 340,300 1,584,000 2,760,000 4,928,000 6,272,000 6,440,000Gross profit (mil VND) - - 10,725 74,700 396,000 690,000 1,232,000 1,568,000 1,610,000


Assessing real estate business in Vietnam

Vietnam is a country with a young population and highest economic growth rate in theregion. With the population of 85.7 million people (on 1/4/2009) and 43% of the populationin Red River Delta (19.5 million) and the Cuu Long (17.1 million), where the populationdensity is highest in Vietnam, especially in big cities. Also according to statistics, the

population living in cities in 2009 increased to 25.3 million people, accounting for 29.6% ofthe total population. Rapid urbanization rate recently has strongly affected real estate

business in the region.

Population of Hanoi is 6.4 million people; the population living in urban areas is 40.8%. HoChi Minh City's population is 7.1 million people and the population in urban areas is 83.2%.In some other provinces such as Ba Ria - Vung Tau, the population is 994,837 people, ofwhich the urban population reached 49.7%, the population of Quang Ninh province 1.1million people and in the urban reached 19.6%.

GDP per capita in Vietnam recently has increased sharply up to over $ 1,040 per person, and

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

9,000,000

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

C kh ch to( Tr ng) Gi vn (Tr ng) LN gp (Tr ng)


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especially in big cities like Hanoi (GDP per capita reached 2,000 USD), in Ho Chi Minh city(GDP per capita reached $ 2,800), in Ba Ria - Vung Tau (GDP per capita reached 4,000USD), in Quang Ninh (GDP per capita reached $ 1,500)... These are the areas in which PVXtargets to implement real estate projects.

In the real estate business, PVX plans to develop in five areas including: urban development -

houses for sales, trading centers, office rental, hotel - resort and infrastructure for industrialzone.

House and department for sales activities

The most attracting activities for the company and real estate investors recently areapartments for sales, total number of sold apartments during period 2004-2009 reached42,778 units, mainly in two largest cities, Ho Chi Minh City and Hanoi. Apartment priceshave fluctuated dramatically in recent years, luxury apartment prices in Ho Chi Minh City in2008-2009 decreased 50% and slightly recover in 2010, while the apartment prices arealmost stable, demand for mid-level apartments and popular class with the price less than

USD 1,500 m2 in Hanoi is relatively high, especially for apartments priced below USD1,000/m2.

Table 7: The number of apartments sold in Hanoi & Ho Chi Minh recently

Class 2008 2009 2010FHigh grate & luxury 6,008 7,292 15,911mid-level 7,141 10,290 15,787

popular 2,068 6,186 5,130Total 15,217 23,768 36,828

Source: CBRE

There are 73% of mid-level and popular class apartments sold at the starting prices from

USD700-900/ m2 in Hanoi in the first quarter of 2010, of which supply is mainly from HaDong, Hoai Duc accounts for 71% of the market. Now, the new urban areas projects aremainly in two areas both in quantity and total supply thanks to the advantages of urbantransport, planning and development of the capital, urban migration in Hanoi and thehousing market in Hanoi are quite exciting in the past few years.

Similar to the real estate market in Ho Chi Minh city, the cheap apartments from USD 700-900 m2 are very attractive to customers, while the apartments priced from USD 1,500 m2or more are quite difficult to sell, the apartment market in Ho Chi Minh is fairly quiet. Inthe future, the housing market will be very attractive for the Corporation to develop real

estate projects, especially development projects in Hanoi and Ho Chi Minh.Office for lease activities

Office leasing market is currently facing with supply excess because a lot of office for lease projects have operated or are going to operate, while the economy is not strongly recovered,leading to slightly increase in rental demand. According to statistics, the supply of officerental in Hanoi now has 14 grade A office buildings with the area of 137,000 m2, with 37grade B office buildings with the area of 330,000 m2 and 57 grade C buildings with the area


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of 200,000 m2. It is estimated that a lot of projects in the west of Hanoi will come intooperation in 2010-2011 such as Sentinel Place and Grand Plaza (60,000 m2), KeangnamLandmark Tower (90.000 m2), Song Da Twins (50,000 m2), EVN Tower (16,000 m2),Mipec Tower (23,000 m2), Southern Peal (65,000 m2) leading to supply excess about150,000 m2, the space rate of grade A office can increase to 18%, while class B to 11%.

The situation in Ho Chi Minh city is similar to Hanois with excess supply due to a series ofnew projects in operation. The space rate has increased 15.6% with grade A, 11.4 % withgrade B and 14% with grade C in quarter 1/2010 and the rent has fallen to 31% over the same

period in 2009. Supply increase is expected in grade A and grade B 110,000m2 & 75,000 m2respectively.

Trading center activities

Trading center business, particularly large, luxurious ones in the center are still scarce and therent increase dramatically recently. Trading center area in the center of Hanoi is 49,197m2and in the peripheral area is 54,379 m2. It is expected that complex buildings in the west of

Hanoi are put into operation in the coming time, the supply will increase and the price willdecrease slightly, especially Grand Plaza project and Keangnam Landmark Tower.

The rent in Ho Chi Minh City has increased to USD108.8 m2, especially the trading centersin the city up to USD200 m2 such as Vincom Center. Supply continues increasing in thefuture, however at the moment, the demand for trading centers in Ho Chi Minh is still high.

Graph 9,10: Revenue, supply for trading centers in Ho Chi Minh City

Hotel- resort activities

Hotel business has recently prospered with the increase in number of tourists thanks to theeconomic recovery. However, recently the on-going projects related to villas and resorts arethe most impressive and attractive to investors. Eight projects were offered for sales in 2008:Tuan Chau Residences, The Montgomery Links, Mui Ne Domain, Ho Tram Sanctuary, LongThanh Gofl, Long Hai Laguna, Con Dao Evasion Hideaway, and Sea Link Phan Thiet with atotal of 1,882 villas. Three projects offering in 2009 were Hyatt Regency Residences, OceanView Villa, Phan Thiet Castles Hill with 174 apartments, 196 villas and 124 ground landsfor villas. In 2010, there are some new projects offering such as Cat Ba amanita, The FirstResort & Villas, Ecopark, Hill Grand Arena, Six Senses Saigon River...


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Hotel market in the first quarter of 2010 has also prospered compared with the same period;room reservation rate in the hotel now is 40-60% of its capacity. The number of hotel roomsin five star hotels is 2,830 with average booking rate of 62.3%, the number of rooms in 4-starhotels are 1,404 with an average booking rate of 49.25% and number of room in 3-star hotelis 1,828 with average booking rate of 58.92%. Tourists coming to Vietnam in 2010 can reach

5.5 million people. The number of 4-5 star hotel rooms in Hanoi increased sharply in 2010and the supply from Chamvit (600 rooms), Crown Plaza (386 rooms), IntercontinentalKeangnam (383 rooms). In Ho Chi Minh, it is expected to have 3,506 rooms more for the

period 2010-2013 from the hotels such as the Liberty 6 (year 2010 - 144 rooms), GoddenTower (2010 - 120 rooms), Saigon Givral (year 2010 - 209 rooms), New Pacific (2011 - 120rooms), Grand Extension (2011 - 170 rooms)...

Infrastructure for industrial park

By the end of 2009, there were 249 industrial parks approved for operation with the area of63,173 hectares in which land available for lease is 38,858 hectares, accounting for 61.5% ofthe total area and 174 industrial parks were put into operation with an area of 38,804 ha and74 ones are in compensation and clearance process with an area of 14,792 ha. The averagefilled rate of industrial parks is 48% in Vietnam nowadays.

Industrial parks have attracted 3,600 foreign investment projects with the total registeredcapital of USD 46.9 billion and 3,200 local projects with registered capital of VND 254,000

billion. Industrial zones are mainly located in Ho Chi Minh City, Binh Duong, Dong Nai,Vung Tau, Long An, Hanoi, Vinh Phuc, Hung Yen, Hai Duong and Bac Ninh ... The landrent in industrial parks also varies according to the regions. The highest rent is in Ho ChiMinh City and Hanoi with the average of 2.5 USD/m2/year, while in other provinces theaverage rent is about 1.0 - 2 USD/m2/year.

With economic growing rate now, the industrial zone business will continue to developespecially in the industrial centers such as Binh Duong, Dong Nai, Vung Tau, Long An, TienGiang, Hung Yen, Bac Ninh, Hai Duong, Vinh Phuc... Because in big cities like Ho ChiMinh, Hanoi, industrial zones are gradually replaced by the urban area and plants intend tomove to the nearby city with sea transport convenient for exports.

Industrial zone-real estates activities of PVX

Currently infrastructure- real estate business only accounts for nearly 5% of PVXs revenuestructure. Therefore, with the expansion of infrastructure for industrial zone and real estate

business will enable PVX to increase revenue, profit strongly from its potential business.

Table 8: Some industrial parks and real estates PVN and its member company

implementing:

No Project name Investedcapital

(bilVND)

Area(ha)

Implementation progress

1 Petroleum University Urban area-Vinh Phuc

4,000 72,21 Plann ing has been appr oved 1 / 500 andstarted phase1 in late 2010; phase 1 from2010-2013, phase 2 f rom 2014-2019


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2 Hoai Duc urban area- Hanoi 2,000 190 Ph as e 1: in fr ast ru ctu re le ve li ng wor thVND 450 billion has approved 1 / 2000 andis expected to approve the plan 1 / 500 in2010 and the project was started in 2011.

3 5 star hotel complex in My Dinh 7,373 3,82 Th e pr oj ect o f PV N is lo cat ed in th e MyDinh with the area of 25ha and it isexpected to be completed in quarter 4 /

20124 Petroleum urban area in Vung Tau 1,500 69,4 Th e pl an 1 / 50 0 wa s ap pr oved an d it i s

expected to s tart in late 2010, lasting from2010-2020

5 Office, trade and resident in 30/4Street, Vung Tau

920 1,61 Start ed in quar ter 1 / 2010 and expect edcompletion in 2012

6 Trading center, office, high-graderesident in Cot Dong Ho, Ha Long

800 1,02 Start ed on 3/2/ 2010 , the project is expec tedto be completed in 2012, s tarted to recordrevenue in 2010

7 Ha Long cultural eco-tourism urbanarea

1,500 1,130 Compl etin g plan 1 / 2000 and its expect edto be approved in Q3 2010, s tarted latequarter 4 / 2010 and completed in 2020, the

pr oj ect is locat ed in Ha long ecot ou r is m arewith 8,000 ha wide.

8 Tan Vien high-grade eco-tourismarea

825 1,024 Phas e 1 of the proje ct plan s to inve st 825 bil lion VN D, the pr oject is in the proc essof compensation, s ite clearance. The

pr oj ect s tar t ed in quar ter 2 / 201 0 andschedule for completion in 2020

9 Tien Giang Petroleum industrial park 1,217 3,560 Pl ann in g wa s co mpl ete d 1/ 20 00 , th e pro j ectis in the completing process and start in2011

10 Hoang Mai Industrial park 850 340 Im pl eme nt ed Ph as e 1 an d fi ll in g ra te is up30%, particularly KOBE steel company haslong-term lease of 40ha, implementing the

pr oj ect 's secon d ph ase and comp leted inDecember 2 014

11 Dong Hoi industrial park 5,562 1,436 St art ed in Ma y 20 10 , sc he du le d fo r

completion in December 2015

12 Hoa Cam industrial park stage 1, 2 362 266 C omp le te d P ha se 1 an d f il li ng r at e isnear ly 100%, prepar ing to i mplement Phase2 of the project

13 New urban area Chi Linh- Cua Lap 4,000 69 Appr ove d pl an 1 / 500 an d pr epar ing t os tar t

Source: PVX, PSI forecasts

1. Petroleum University project in Vinh Phuc Urban Area is implemented in centertown- Vinh Yen Town, one of the six satellite urban areas around Hanoi, with a totalinvested capital of more than VND 4,000 billion and the expected profit of about

VND 1,000 billion in the future. There are 23 new urban area projects in real estatemarket implemented in Vinh Phuc, Vinh Yen Town, Me Linh with a planned area of1,154.48 ha , the new residential area of 251.3 hectares. Apart from PetroleumUniversity project, there are other similar projects including: Dam Coi Urban Area TMS Land with the area of 151 hectares (invested capital 2,200 billion VND), urbanarea of Ha Tien Temple - Lac Hong Construction JSC with the area of 59.7 ha (298

billion VND invested), new urban area in Ha Phong - Ha Phong Joint StockCompany with an area of 37.06 hectares (57 million dollars invested), new urban


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area in Quang Minh Long Viet by Long Viet Construction & Investment JointStock Company with an area of 45 hectares (600 billion VND invested).

2. Petroleum Urban Area in Hoai Duc - Ha Noi: This project is very potential asland in the west of Hanoi, especially in Hoai Duc district is very attractive toinvestors. With planned area of 190 ha and the initial expected capital of 450 billion

VND for first stage, and for the whole project of about 2,000 billion VND. Weestimate it will generate approximately VND 3,500 billion profit for PVX afterfinishing projects. In the west of Hanoi, there are hundreds of new urban area

projects, notably North An Khanh urban area project (Vinaconex - Posco E & C),South An Khanh Urban area project (SUDICO), My Dinh new urban areas, VanCanh new urban area, Highway 32 new urban area ... and these projects are saleablevery quickly and generate great profits for the investors.

3. Some other projects: These projects implemented by its subsidiaries and associatedcompanies could also bring big profits such as Vung Tau Petroleum Urban Area, ChiLinh- Cua Lap new urban area, eco-tourism area in west of Ha Long, Tan VienEcology area, Tien Giang Petroleum industrial park...

With its existing projects and coming projects, PVX is very potential in real estate business, particularly from its member companies such as: PetroVietnam Premier Recreation JSC(PVR), PetroVietnam Nghe An Construction JSC (PVA), Petroleum Industrial & CivilConstruction Co., Ltd (PXI), and the associated companies of PVX.

We forecast revenue growth from infrastructure for industrial and real estate business of PVXas the table below:

(However, the real estate projects of PVX primarily in the first phase of investment, so we do

not have enough information to determine the NAV of each project in order to accurately

assess the value of NAV per Share to determine the best price of PVX)

Graph 11: Forecast revenue from infrastructure- real estate business

-1,000,0002,000,0003,000,0004,000,0005,000,0006,000,000

7,000,0008,000,0009,000,000

10,000,000

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Kinh doanh BS ( Tr ng) Gi vn (Tr ng) LN gp (Tr ng)


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Source: PVX, PSI forecast

Graph 9: Forecast revenue-CoGS and gross profit in infrastructure- real estate

business

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Real estate business (mil

VND)

- - 187,285 210,000 900,000 1,840,000 3,920,000 6,080,000 8,750,000

CoGS (mil VND) - - 133,008 147,000 630,000 1,196,000 2,548,000 3,952,000 5,687,500

Gross profit (mil VND) - - 54,277 63,000 270,000 644,000 1,372,000 2,128,000 3,062,500


Financial investment activities

With equitization of PVXs member companies recently and the reorganization of companiesoperating in the construction sector - real estate business material production forconstruction - mechanical manufacturing has helped PVX increase the financial investmentin its subsidiaries, associated companies and long-term investments and capital withdrawalfrom some member companies which generate a lot of financial income in 2009-2010.

The Company has the advantages of implementing works within the Group, therefore it cancollect money easily and use the idle cash for investment. This is one of the major advantagesof PVX compared with other units in this sector.

Table 10: List of companies with capital contribution of PVX

Subsidiary Company code Owners equity( bn)

% of PVXContribution

1 Cong ty CP Xay lap Dau khi Mien Trung PXM 150.00 51.00%2 Cong ty CP Xay lap Duong ong Be chua Dau khi PXT 200.00 51.00%3 Cong ty CP Xay dung Cong nghiep va Dan dung Dau khi PXI 300.00 51.00%4 Cong ty CP Ket cau Kim loai va Lap may Dau khi PXS 200.00 51.00%5 Cong ty CP Xay lap Dau khi Ha Noi PVC - HN 100.00 55.00%6 Cong ty CP Thi cong Co gioi va Lap may Dau khi PVC - ME 200.00 51.00%

associated companies 1 Cong ty CP Xay lap Dau khi Sai Gon PVC-SG 130.00 30.77%2 Cong ty CP Phat trien Do thi Dau khi PVC - CM 100.00 30.00%3 Cong ty CP Quan ly va Phat trien nha Mien Nam PV SBD 55.00 40.00%4 Cong ty CP Thiet ke Quoc te Heerim PVC PVC-HEERIM 20.00 50.00%5 Cong ty CP Kinh doanh Dich vu cao cap Dau khi Viet

NamPVR 300.00 35.60%

6 Cong ty CP Quan ly va Phat trien nha Dau khi PV Building 55.00 40.00%8 Cong ty CP dau tu xay dung va kinh doanh dich vu nha

Dau khi - SSGPVC-SSG 6.00 25.00%

9 Cong ty CP BDS Tai chinh Dau khi Viet Nam PVFC Land 500.00 30.80%10 Cong ty TNHH Vietubes Viettubes 33.70 29.94%11 Cong ty CP Tu van Dau tu va Thiet ke Dau khi PVE 80.00 40.50%12 Cong ty CP BDS Dau khi Petrowaco 100.00 30.00%13 Cong ty CP Dau tu Ha tang Do thi Dau khi PTL 1.000.00 28.45%14 Cong ty CP BDS Dien luc Dau khi PVL 500.00 28.00%15 Cong ty CP Co dien Dau khi PVME 10.00 26.00%16 Cong ty CP Dau tu va Xay dung khi PVID 200.00 25.50%17 Cong ty CP Be tong Du ung luc PVC-FECON PVC-FECON 150.00 25.00%18 Cong ty CP May Thiet bi Dau khi PV Machino 386.38 36.00%19 Cong ty CP Dau tu Xay lap Dau khi Hai Phong PVC HP 50.00 30.00%


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20 Cong ty CP Dau tu Thuong Mai Dau khi Song Da 150.00 25.00%Other long-term investment

1 Cong ty CP Dau tu be tong cong nghe cao SOPEWACO 80.00 12.80%2 Cong ty CP Thiet ke WORLEPARSON Dau khi Viet Nam 16.00 7.00%3 Cong ty CP Hong Ha Dau khi PHH 80.00 15.00%4 Cong ty CP Xay dung Song Hong ICG 150.00 12.00%

5 Cong ty CP Xi mang Ha Long 982.00 15.00%6 Cong ty CP Dau tu Xay dung KCN DK IDICO Long Son PIVLS 827.22 14.50%7 Cong ty CP Xay lap Dau khi Thai Binh Duong PVC TBD 50.00 4.00%8 Cong ty CP Dau tu & Xay lap Dau khi Kinh Bac PVC-KBC 50.00 5.00%9 Cong ty CP Xay lap Dau khi 4 PVC4 250.00 2.00%

10 Cong ty CP Xay lap Dau khi PVC Truong Son PVC-TS 60.00 5.00%11 Cong ty CP Dau tu Xay dung Cong nghiep Luyen kim va

Do thi IMICOPVC-IMICO 200.00 2.50%

12 Cong ty CP Co dien Dau khi PVM&E N/A N/A13 Cong ty CP Thiet bi noi ngoai thap Dau khi PVC-METAL 70.00 10.00%14 Cong ty CP San xuat Ong thep Dau khi Viet Nam PV PIPE 500.00 10.00%15 Cong ty CP Dau tu Dau khi Song Hong ( Nha Trang) PVIN 300.00 15.00%16 Cong ty CP Xay lap Dau khi 1 PVC - 1 250.00 2.00%17 Cong ty CP Xay lap Dau khi Viet Nam PVCI 100.00 15.00%18 Cong ty CP Dau tu Xay dung Vinaconex - PVC PVV 45.00 11.10%19 Cong ty CP Dau tu Dau khi Song Hong ( Nha Trang) PVIN 300.00 15.00%20 Cong ty CP Dau tu Xay lap Dau khi Hoa Binh PVC 5 50.00 10.00%

Soruce: PVX, PSI research

PVX invested in subsidiaries, associated companies and long-term investment with anamount of 2,000 bil VND at the price of 10,000 VND per share. According to ourobservations, the listed stock of PVXs member often fluctuates from 22,000 to 30,000 VND

per share, therefore the average profits from financial investments are at around 2,000 billionVND.

Financial investment activities generate relatively large income for PVX. We forecast that thefinancial income of PVX depends on capital withdrawal from its member, receiving dividendfrom the capital contribution and the short-term deposit.

Table 11: Revenue-expense from financial activities of PVX

Financial investment 2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Revenue (mil VND) 18,192 44,174 140,835 834,283 814,386 583,560 691,414 817,497 953,878

Financial exp (mil VND) 16,016 29,026 37,601 107,787 226,560 294,400 358,400 442,469 494,213


Graph 12: Revenue-expense from financial activities in coming years


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Comparing business activities of PVX with some listed construction enterprises

2007-2009 period witnessed quick growth of PVX revenue with an average increase of128.83% per year, much higher compared to other companies in the industry.

Performance indicators of the Company are lower compared with the average one of thisindustry. ROE, ROA, profit margin of the company is average compared to other largecompanies in the construction industry in Vietnam. Gross profit margin, net income /revenue, ROE are at the average rate for the period 2007- 2009, as the Company startsequitization & restructuring in 2007. In 2009, profitability of PVX was equivalent with largeand listed enterprises in the industry such as VGC, CTD ...

Graph 13, 14, 15, 16: Compare business activities with some construction

companies

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2007 2008 2009 2010F 2011F 2012F 2013F 2014F 2015F

Doanh thu (Tr ng) Chi ph ti chnh (Tr ng)


19/24


20/24





Financial forecast

Revenue, CoGs, profit assumptions:Based on collected information on PVXs business operations and forecasts on thedevelopment of construction industry, industrial production and infrastructure for industrial

parks, real estate business, planning & development of oil and gas sector as well as thedevelopment of real estate market in Hanoi, Ho Chi Minh City, Vung Tau and Quang Ninh... We prudently forecast the result of PVXx business activities as follows:

We rely on the signed contracts as well as progress billing of the construction contract for ourrevenue forecast in 2010. Cost of goods sold is relatively stable and tends to decrease, assome input materials the Company have itself: stone for construction stone, cement...

Year 2010 will be the start year for the period 2010-2015 to accelerate in mechanical activityand industrial production to increase revenue in revenue structure of PVX. These activitiesare relatively favorable as oil and gas industry develops its exploration and exploitation inVietnam as well as some places like Russia, Venezuela, Egypt ... and to manufacture thelargest base for oil rig, tanks, LPG and oil storage equipments. The Company has startedindustrial production works such as cement plants 12/9, concrete factory PVC-FECON, TienGiang engineering service port, straight welded steel pipe factory

Profit from infrastructure- real estate business is boosted by PVXs focus on developing key

812,424 853,285

3,822,294

5,648,5035,303,086

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

2006 2007 2008 2009 Q1/2010

Total assets ( VND mil)

150,000 150,000

1,500,000 1,500,000 1,500,000

-200,000400,000600,000800,000

1,000,000

1,200,0001,400,0001,600,0001,800,0002,000,000

2006 2007 2008 2009 Q1/2010

Share capital ( VND mil)

342,117726,816

1,808,500

4,073,122

1,052,077

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2006 2007 2008 2009 Q1/2010

Revenue (VND mil)

15,494 17,799

82,020

228,962

121,158

-

50,000

100,000

150,000

200,000

250,000

2006 2007 2008 2009 Q1/2010

Profit after tax (VND mil)


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real estate projects: Petroleum University Urban Area - Vinh Phu, Petroleum urban area-Hoai Duc Hanoi, Petroleum Urban area - Vung Tau, 5 star hotel financial services area inMy Dinh, Hoang Mai Industrial Zone, Hoa Cam Industrial Zone ...

Income from financial activities was based on the progress of capital withdrawal, investmentin shares of its member companies and cash, cash at bank in the expected annual balance

sheet.

Revenue from associated companies, joint ventures is dividends received from its membercompanies, we appreciate this is a very large amount because there are a lot of subsidiarycompanies.Financial expenses are mainly from short-term and long-term loan on the annual balancesheet.

Detailed assumptions:

- Revenue growth rate in 2010 about 62%, in 2011 approximately 168%, in 2012about 30%, and from 2013 to 2015 average about 25% per year and estimated for

the long term at about 10% per year.- The rate of COGs/revenue will be at 89-90% for the period 2010-2015, and stabilize

at about 90% from 2016 onwards.- G&A expenses average 4.5% of total sales in 2010-2011 and decreased gradually to

about 4% of total revenue in 2015.- Fixed assets increased as planned, the expected average depreciation period is 5-7

years with other types of assets, straight line depreciation method- Registered capital will increase from 2,500 billion VND in 2010 billion to 10,000

billion VND in 2015- Percentage of dividend paid at 15% per year

Table 12: Forecast business performance of PVX in coming years

2010E 2011E 2012E 2013E 2014E 2015E

Construction output 8,000,000 20,000,000 26,000,000 32,000,000 36,000,000 40,000,000

Revenue (mil VND) 6,598,367 17,695,621 22,994,310 27,993,073 31,992,084 34,991,342

CoGs (mil VND) 5,898,940 15,498,000 19,481,000 23,100,000 25,920,000 27,877,500

CoGs/Revenue 89.4% 87.6% 74.7% 82.5% 81.0% 79.7%

Gross profit (mil VND) 699,426 2,197,622 3,513,311 4,893,074 6,072,085 7,113,842

Gross profit/ Revenue 10.6% 12.4% 15.3% 17.5% 19.0% 20.3%

Profit after tax (mil VND) 853,651 1,217,952 2,043,555 2,981,761 3,708,805 4,406,679

Profit after tax/ Revenue 12.9% 6.9% 8.9% 10.7% 11.6% 12.6%

ROA 9.76% 7.10% 9.31% 11.22% 11.62% 12.18%

ROE 27.71% 24.39% 28.91% 30.25% 26.63% 24.01%

Charter capital (mil VND) 2,500,000 4,000,000 5,000,000 6,000,000 8,000,000 10,000,000

EPS (VND) 4,268 3,748 4,541 5,421 5,298 4,896



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Valuation

Pricing method

We combine four methods: FCFE, FCFF, P/E, P/B to determine the expected price for PVX,these indicators are compared with the average price in construction, real estate business,

mechanical engineering and construction companies with a similar scale in Southeast Asia,the Companys share is prudently priced at 35,700 VND per share.

(PVX also may face with some risk if PVN receive some companies in Vinashin and may transfer to

PVX as the parent company. We do not have enough information about this and could not assess,calculate and include in this report)

Valuation result Price (VND)FCFE 43,093FCFF 39,109P/E 38,521P/B 22,123

Source: PSI forecast


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APPENDIX: FINANCIAL STATEMENT

2008 2009 2010F 2011F 2012F

Revenue 726,816 4,072,114 6,598,367 17,695,622 22,994,311

Cost of goods sold 690,709 3,653,617 5,898,940 15,749,103 20,464,937

Gross profit 36,107 418,497 699,427 1,946,518 2,529,374

Financial income 18,192 128,031 736,931 700,289 459,009Financial expense 16,016 37,601 107,787 226,560 294,400

Selling expense - 4,608 3,300 17,700 23,000

G&A expense 25,374 266,071 316,800 708,000 805,000

Net profit 12,909 238,247 1,008,471 1,694,548 1,865,983

Other income 4,890 26,592 126,394 8,850 11,500

Profit before tax 17,799 264,839 1,134,865 1,703,398 1,877,483

Profit after tax 17,799 228,962 948,501 1,391,645 1,532,664

TOTAL ASSET 853,285 5,608,972 9,675,605 19,031,369 24,341,597

Current Assets 756,767 3,590,395 6,609,320 14,714,262 19,035,432

Cash and cash equivalent 44,130 474,324 1,534,679 1,104,996 1,351,075

Short-term investment 524 136,553 221,268 593,400 771,085

Account receivables309,721 1,891,315 3,090,072 8,287,012 10,768,434

Inventories 319,075 971,499 1,574,196 4,221,708 5,485,835Other short-term assets 83,317 116,704 189,105 507,145 659,002Long-term assets 96,519 2,018,577 3,066,285 4,317,107 5,306,166

Long-term receivables - - - - -Fixed assets 59,119 639,239 764,987 1,085,133 1,580,605Tangible fixed assets 56,075 482,937 579,524 724,405 869,286

Cost 148,650 752,508 903,009 1,128,762 1,354,514 Accumulated depreciation (92,575) (269,571) (323,486) (404,357) (485,228)

Long-term investment 22,399 1,160,714 1,947,044 2,281,930 2,491,040Other long-term assets 853,285 5,608,972 9,675,605 19,031,369 24,341,597

TOTAL RESOURCES 853,285 5,365,629 9,108,854 18,464,618 23,774,846Short-term borrowing & liabilities 669,588 3,343,243 5,406,087 12,131,974 15,583,529

Short-term borrowings 320,297 534,858 866,672 1,416,000 1,840,000

Long-term borrowings 3,372 266,222 279,240 748,871 973,109Long-term borrowings 3,372 256,817 264,000 708,000 920,000

Owners equity 179,261 1,753,184 3,414,042 5,569,858 7,202,882

Contributed capital 150,000 1,500,000 2,500,000 4,000,000 5,000,000Retained earning 26,399 223,761 872,262 1,524,742 2,154,140

Other funds 1,064 2,980 9,485 13,916 15,327

Debt ratiosQuick ratio 0.65 0.73 0.89 0.81 0.82Current ratio 1.13 1.07 1.22 1.21 1.22Capital structure ratiosDebt/ Owners equity 375.4% 205.9% 166.5% 231.3% 229.9%Debt/Total assets 78.9% 63.9% 58.5% 67.5% 67.9%Operating ratios

Inventory turnover. 2.44 5.66 4.63 5.43 4.22Account payable turnover 7.23 9.16 6.30 7.38 5.73Account receivable turnover 5.08 12.25 9.28 10.93 8.48

Profitability ratios Net profit/ revenue (GM) 5% 10% 11% 11% 11%Operating profit/revenue 1% 4% 6% 7% 7%(Operating margin)ROA 2.1% 4.1% 9.8% 7.3% 6.3%ROE 9.9% 13.0% 27.7% 24.9% 21.2%


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DISCLAIMERS

This material has been prepared by Research department Petrovietnam Securities Joint Stock Company. Theinformation 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 estimateset forth herein changes or subsequently becomes inaccurate, except if research on the subject company iswithdrawn. 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 anoffer to buy or sell any financial instruments or to participate in any particular trading strategy in any jurisdiction oras an advertisement of any financial instruments.

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

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

Research Department

Direc tor, Research Department: Pham Thai Binh - b inh pt@psi .vn

Research Analyst : Nguyen Minh Hanh hanhnm@psi .vn

Market & Macro-economicResearch

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