Company+Visit+Note+EVE+ICB+3722+BSC+15+10+2013.pdf

7/27/2019 Company+Visit+Note+EVE+ICB+3722+BSC+15+10+2013.pdf

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Bank for Investment and Development of

Vietnam Securities Joint Stock Company

Consumer Goods ICB 3722October 15, 2013

COMPANY VISIT NOTE

Everpia Vietnam JSC EVE

Website: http://www.bsc.com.vn - Bloomberg: BSCV

EVERPIA THE NUMBER ONE IN BEDDING BUSINESS

Everpia - the number one Company in the middle-end Bedding

business segment with high profit margin 33% and 39% (Bedding

and Padding). Besides holding 25% market share in the middle-end

bedding business segment, in 2013, the Company has increased its

market share to 31% in padding business. Thanks to strong brand

advantages, large distribution system, the Company's profit margin

maintained at a high level and stable.

Padding sales performance increased 36% over the same period

2012, while Bedding revenue decreased slightly. According to the

Company, accumulated 3Q, Padding revenue reached VND257 billion,

much higher than that of last year and nearly reach the number of the

main products Bedding of VND264 billion.

Update Business performance in the first 9 months.Total revenue of

the first 9 months 2013 reached VND522 billion, increased 11% compared

to the same period in 2012. Profit before tax was estimated at VND81

billion, and VND59 billion of profit after tax.

Improve capacity and develop products. The Company said that it will

bring to market a number of new product lines such as Towel & Home

textile, Furniture with brandname Everon. The new products will take

advantage of the 600 retail outlets system nationwide. Besides, the newfactory was opened in Hung Yen (5 km from the old factory) rising the

Company's capacity to meet the increasing demand of padding

production. In addition, the Company is also negotiating with a partner,

one of the four leading manufacturers of spring mattresses to implement

the spring mattresses projects in Dong Nai (Mattpia factory)

Outlook 2013 and 2014. According to our assessment, Everpia wil l not

benefit directly from the prospect of TPP. However, if the agreement is

signed, Everpia will gain benefits indirectly from more competitive inputs

and more satisfactory padding demand growth.

Fundamental Information 2009 2010 2011 2012 1H2013

Net Revenue (billion VND) 424 564 799 680 333

% growth y-o-y 27% 33% 42% -15%

Total Asset (billion VND) 417 669 850 899 921

Total Equity (billion VND) 335 574 690 721 732

Charter Capital (billion VND) 107 153 234 280 280

After Tax Income (billion VND) 86 102 151 75 40

% growth y-o-y 68% 19% 47% -50%

Period - end EPS (VND/share) 7,944 6,686 6,447 2,664 1,428

Book Value (VND/share) 31,231 37,420 29,506 25,762 26,157

Gross Profit Margin 41.8% 42.0% 39.7% 34.3% 36.8%

ROS 20.2% 18.1% 18.9% 11.0% 12.0%

ROE 25.5% 17.8% 21.8% 10.3% 5.5%

ROA 20.5% 15.3% 17.7% 8.3% 4.3%

TRADING GRAPH

TRADING INFORMATION

Outstanding (mil shares) 27.5

Market Capitalization (bil ) 577

Book Value (bil ) 732

Foreign Ownership (%) 47.37%

Current Price (/share) 21,100Avg 10 days (shares) 9,387

Lowest price 52 Wk () 26,110

Highest price 52 Wk () 17,250

The Exchange rate USD/VND~ 21,000

ANALYST

Luong Thu Huong

Equity Analyst

Email: [email protected]

Tel:+ 84439352722

Tran Thang Long

Head of Research


Tel:+ 84439352722


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Company Visit Note Everpia Vietnam JSC - EVE

Website: http://www.bsc.com.vn - Bloomberg: BSCV 2 of4

UPDATED PERFORMANCE Q3/2013

In October 2013, we had a chanceto visit Hung Yen Factory of EverpiaVietnam JSC (EVE), and recoredsome important informationregarding to the business and

prospects of Everpia.

Graph1: Shareholder Ownership

From a FDI Company to a listed Company (1993 to 2013). Everpia starting

point was the Hanoi branch of Viko Moolsan Ltd. established in 1993, in the

year 2003, Hanoi branch was split with the new name Viko Glowin Hanoi Ltd.

In 2006, the Company changed its name to Everpia Vietnam Company

Limited. In 2007, the Company transformed into a joint stock company andwas listed in Dec 2010, Ho Chi Minh Stock exchange EVE.

Concentrated Ownership Structure. Board of directors and the relevant

persons hold 37.4% shares of the Company, standing behide is Red River

Holding (13.8%), Tien Phong Bank (10.6%),... Shares number of Vietnamese

private shareholders accounted only 11.3% of the outstanding shares.

Therefore, EVE has very low levels of liquidity, not suitable for the short-term

trading investors.

Prospects from TPP (Trans-Pacific Partnership Strategic Agreement).

According to our assessment, Everpia will not benefit directly from the

prospect of TPP. However, if the agreement is signed, Everpia will gain

benefits indirectly from more competitive inputs and more satisfactory padding

demand growth.

Core business activities. The Company's main product lines include

bedding, padding, quilting, among which bedding accounted for 40.8% and

padding accounted for 31% of revenue in first 9 months of 2013. These

products primarily serve middle and high-end segment. The market for

bedding in 2012, 2013 experienced a slight decrease in size; however leading

enterprises including Everpia still remained quite good revenue and profit.

Graph2: Bedding sales performance Graph3: Padding sales performance

Graph4: Bedding Market shareBedding. Everpia now holds 25% of market share of middle-end bedding

market. The two biggest competitors hold 18% and 15% of market share,

respectively. The Company also orient their brand into high-end and mid-end

segments (Everon, Artemis, Edenlin ...)

In 2012, 2013 the Company coped with various difficulties as the market was

strongly influenced by the domestic economic downturn. However, because

there was an increase in the demand of hotels, so revenue from bedding has

declined slightly compared to 2012. According to estimated accumulated 3Q

data, revenue from bedding is about VND264 billion and fall 5.6 % yoy.

Consumption season of bedding products is the period from September toFebruary of the next year; hence, the Company is promoting sales through its

agents. The Company also plans to invest more in marketing mainly to

326.080 407.909

558.549

473.956

163.283

42.13%

41.62% 39.76%

30.68% 33.69%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

0

100

200

300

400

500

600

2009 2010 2011 2012 1H-2013

Bedding Revenue (VNDbn) Bedding gross profit margin

98

160

243

212172

41% 41%

38.70%

40.98%

39.14%

37%

38%

39%

40%

41%

42%

0

50

100

150

200

250

300

2009 2010 2011 2012 1H-2013

Padding Revenue (NVDbn) Padding gross profit margin

EVERPIA25%

CompanyA

18%

CompanyB

15%

CompanyC

8%

Others34%


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Graph5: Bedding sales mix bygeography

Graph6: Padding Market share

improve the capacity of existing agents (not to open more agents). Everpia

currently has more than 600 agents across the country which mainly

concentrated in large cities and Northern markets.

Profit margin of bedding products has maintained at high level (about

33.69%). Thanks to the advantage of strong branding, wide distribution

network and being facilitated in the import of raw materials from Korea, the

Company's profit margin has still remained higher than the market average.

Padding.According to estimated data from the Company, accumulated 3Q

revenue from padding reached VND257 billion and increased 36% compared

to that of the same period. In 2013 the Company has gained market share of

competitors. Consequently, EVE has recently taken the lead in the whole

market with 31% of market share. Producing season of padding is the period

from March to August, which is very suitable for the production of core

product (bedding) September to February. Padding market mainly serves

export orders and is expected to grow 5-10% per year. The Company's profit

margin of padding has stabilized at a high level over the past few years andreached 39% in the first 6 months of 2013. The Company also holds the

exclusive right to produce some kind of lightweight cotton such as Invista

brand and Thermolite brand apart from Dexfil brand of Everpia

Future business development plan. Besides the two traditional products

(bedding and padding), the Company is developing three new products on

the basis of exploitation of production advantages as well as agent system.

These new items are expected to contribute to total revenue about VND15

billion in 2013 and VND21 billion in 2014.

o EVERON spring mattress. The Company has invested in a spring

mattress factory in Dong Nai named Mattpia. However, this

investment was not effective because the technology did not meet

the requirements. The Company has acquired Mattpia and increased

the ownership proportion from 58% to 100% before cooperating with

a foreign partner. The Company said that this counterparty is one of

the four biggest spring mattress manufacturers in the world.

o EVERON bedroom furniture. The Company plan to hire production

partners to produce luxury wooden bedroom furniture under the

brand of Everon. The product will be exhibited and sold at the

Company's agents to capitalize on the sale ability of agents in major

cities.

o EVERON towel and home textile. The Company recognized that

this market was not identified in terms of branding (like bedding

market 10 years ago). EVEs products will be woman - oriented or

serve families with middle or higher income. Product is expected to

be available at agents in 10/2013.

Verdict: Thanks to the enhancement in developing a strong agent network;

branding for each product segment; targeting hotels resort; promoting

exports; application of modern management system (ERP) as well as being

affected positively from the fact that Vietnam may join the TPP in the near

future, we highly appreciate Everpias potential in the coming period.

H Ni43%

NorthernProvince

s36%

H ChMinh10%

SouthernProvince

s11%

EVERPIA31%

CompanyA

30%

CompanyB

13%

Company

C8%

Others18%


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DISCLAIMER

The information, statements, forecasts and projections contained herein, including any expression of opinion, are

based upon sources believed to be reliable but their accuracy completeness or correctness are not guaranteed.

Expressions of opinion herein were arrived at after due and careful consideration and they were based upon the best

information then known to us, and in our opinion are fair and reasonable in the circumstances prevailing at the time.

Expressions of opinion contained herein are subject to change without notice. This document is not, and should not

be construed as, an offer or the solicitation of an offer to buy or sell any securities. BSC and other companies in the

BSC and/or their officers, directors and employees may have positions and may affect transactions in securities of

companies mentioned herein and may also perform or seek to perform investment banking services for these

companies. This document is for private circulation only and is not for publication in the press or elsewhere. BSC

accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or its

content. The use of any information, statements forecasts and projections contained herein shall be at the sole

discretion and risk of the user.

RESEARCH DEPARTMENT BIDV SECURITIES COMPANY (BSC)

Long Tran

Research Manager

longt [email protected]

Khoa Bui

[email protected]

Vit Nguyen

[email protected]

CONTACT INFORMATION

BSC Head Office

10th, 11th Floor BIDV Tower

35 Hang VoiStr Hanoi

Tel: 84 4 39352722

Fax: 84 4 22200669

Website: www.bsc.com.vn

BSC Ho Chi Minh Branch

9th Floor 146 Nguyen Cong TruStr

District 1, Ho Chi Minh City

Tel: 84 8 3 8218885

Fax: 84 8 3 8218510

Sales & Advisory

Minh Phan

Tel: 0439352722 (155)


Institutional Sales & Advisory

Anh Nguyen

Tel: 0439352722 (175)


BIDV Securities Company (BSC)

No part of this material may be (i) copied, photocopied or duplicated in any form by any mean or (ii) redistributedwithout the prior written consent of BIDV Securities Company (BSC).
mailto:[email protected]:[email protected]://www.bsc.com.vn/http://www.bsc.com.vn/mailto:[email protected]:[email protected]

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Company+Visit+Note+EVE+ICB+3722+BSC+15+10+2013.pdf