Group 6 investing stocks and lessons learned (1)

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<b>BANKING ACADEMY OF VIETNAM </b>

<b>FACULTY OF FOREIGN LANGUAGES </b>

<b>Securities market GROUP ASSIGNMENT</b>

<b> TOPIC: INVESTING IN STOCKS AND LESSONS LEARNED </b>

<b>Instructor: Mr. Tran Anh Tuan </b>

Group 6:

Trịnh Thị Ph°¡ng Thảo (24A7511995) TrÁn Thị Uyên (24A7512008) Tr°¡ng Thành Tuệ (24A7510037) Lê Thị Huyền (24A7511480) Chu Hạnh Quyên (24A7511760) D°¡ng Thị Song Trà (23A7510137)

Ha Noi, 16th May 2024

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TASK ASSIGNMENT TABLE AND CONTRIBUTION LEVEL OF TEAM MENBERS

No.Student ID Name Content of work Level of contribution 1 24A7511995 Trịnh Thị Ph°¡ng Thảo - Contributing ideas

- Making content of opening part, part I, IV, V

100%

2 24A7511480 Lê Thị Huyền - Contributing ideas - Making content of partII, VIII, IX and conclusion

100%

3 24A7511760 Chu Hạnh Quyên - Contributing ideas - Making content of part III, VI, VII

100% 4 24A7510037 Tr°¡ng Thành Tuệ - Contributing ideas

- Making slides ^100%5 24A7512008 TrÁn Thị Uyên - Contributing ideas

- Presenting ^100%6 23A7510137 D°¡ng Thị Song Trà - Contributing ideas

- Presenting ^100%

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Table of Contents

<small>INTRODUCTION ... 1 </small>

<small>CONTENT ... 1 </small>

<small>I, Analyzing the Vietnamese stock market at the time of investment ... 1 </small>

<small>II, Choose a stock code to invest in, state the reason for your choice, and provide brief information about the investment securities company ... 2 </small>

1.The stock code HPG belongs to "Hoa Phat Group Joint Stock Company" ... 2

2.The stock code BSR belongs to "Binh Son Refining and Petrochemical Joint Stock Company" ... 4

<small>III, Steps to open a trading account at a securities company, contracts, and relevant documents ... 5 </small>

<small>IV, Fundamental Analysis in Stock Investment ... 8 </small>

1. The financial figures for "Hoa Phat Group Joint Stock Company" for each quarter: . 102.The financial figures for Binh Son Refining and Petrochemical Company Limited by quarter: ... 11

<small>V, Short-Term Investment Strategy ... 12 </small>

1.Define Short-term Goals ... 12

2. Research company information, news, and events that may impact stock prices in the short term and investment strategy ... 12

<small>VI, Liquidity and Costs of Securities and Investment ... 13 </small>

<small>VII, Present the investment results ... 18 </small>

1.The trading process: ... 18

2.Results after trading stocks: ... 18

<small>VIII, Advantages and disadvantages of investing in stocks ... 20 </small>

<small>IX, Recommendations or guidelines for beginners or those interested in investing in the stock market ... 20 </small>

1.Detailed steps for investing in stocks for beginners ... 20

2.Some recommendations and tips for beginners ... 21

<small>CONCLUSION ... 22 </small>

<small>REFERENCES ... 23 </small>

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INTRODUCTION

Currently, in the increasingly developing process of industrialization and modernization, the development of information technology is closely linked to the economy and has made significant contributions to the development of each country. One of the bright spots in the economic development associated with information technology is the stock market, which plays an important role by creating conditions for capital formation, allowing investors to participate in the development of companies, and serving as an indicator of the overall economic situation globally and specifically in Vietnam. The stock market is where buyers and sellers trade publicly listed company stocks. It serves as a platform for investors to buy and sell stocks, representing ownership rights in a company. The stock market provides companies with access to capital by allowing them to issue shares to the public in exchange for funds. Conversely, investors can buy and sell these stocks on the stock market to potentially earn profits from capital gains and dividends. This facilitates the concentration of domestic and foreign capital for socio-economic development projects. From 2005 to the present, the stock market in Vietnam has made significant progress, serving as an effective capital mobilization channel for enterprises and attracting the attention of many. However, the development of the stock market in Vietnam has also faced fluctuations and been impacted by factors such as the global economic situation, the effects of COVID-19, financial and political market fluctuations, and other uncertainties that create instability in the stock market.

To gain a better understanding of the current context, effective investment tools and methods, important aspects, or strategies to mitigate risks in investing, we have decided to conduct a research study on stock (equity) investment.

CONTENT

I, Analyzing the Vietnamese stock market at the time of investment

The current stock market in Vietnam is experiencing various fluctuations and challenges due to internal and external factors. After a period of decline due to the impact of the COVID-19 pandemic in early 2020, the market has shown a strong recovery but has seen sharp corrections from its peak in July 2021. Mr. Le Trong Minh - Deputy Editor-in-Chief of Investment Newspaper summarized opinions from analysts, policy agencies, and businesses participating in the online seminar "Identifying stock market opportunities in the second half of 2021" with the observation: "There are positive and optimistic factors alongside risks, but certainly, the stock market still offers many opportunities and prospects ahead. If we seize the market opportunities early and take a long-term view, the chances of success are very high." All fluctuations in the Vietnamese stock market can impact our country's economy as it is a crucial channel for capital mobilization and a potential investment avenue for the public. Additionally, a significant factor driving the market is the smooth and stable operation of the trading system provided by FPT, which has helped alleviate order congestion and provided

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investors with more confidence in trading. The stock market has the ability to generate high liquidity, concentrate capital distribution, and match capital deadlines with economic development needs. Through the stock market, the government can mobilize financial resources without inflationary pressures, especially when state investment capital in certain sectors is limited. The Vietnamese stock market has supported the privatization of state-owned enterprises effectively. Moreover, it collaborates with the banking credit system to create a more balanced and efficient capital market structure in Vietnam, providing strong support for the economy. However, the market capitalization of the Vietnamese stock market is increasing, creating opportunities but also posing challenges for investors. New policies and regulations from regulatory authorities can impact investor sentiment and market activities. The economic recovery post-COVID-19 also affects the business operations of listed companies on the stock market. To succeed in the current Vietnamese stock market environment, investors need to carefully monitor and evaluate influencing factors, apply suitable investment strategies, and manage risks prudently. Flexibility and patience are crucial factors for achieving success in stock market investment.

II, Choose a stock code to invest in, state the reason for your choice, and provide brief information about the investment securities company

<b>1.The stock code HPG belongs to "Hoa Phat Group Joint Stock Company"</b>

a. Information about the business - Established in 1992.

- Branches: manufacturing and trading in steel and iron.

- 5 main business segments: steel (construction steel, hot-rolled coil (HRC)), steel products, agriculture, real estate, household appliances. Among them, the steel production segment accounts for more than 90% of HPG's revenue.

- President: Mr. Tran Dinh Long (born February 22, 1961), he holds a degree in economics from the National Economics University and is the second richest person on the stock market. - Current price: 28,650 per share

b.Reasons for choice

- Business results recovered strongly:

 In the complex context of the global economy along with the recovery of Vietnam's economy in 2024, investing in industry groups with economic recovery is most necessary. Furthermore, the steel industry has created a long-term bottom, Hoa Phat Group has a leading position in the industry, has a large market share and high reputation in the industry, so investing in Hoa Phat now is very feasible.

 Hoa Phat's revenue has increased again (in 2023, Hoa Phat announced to reopen its 4 blast furnaces => output increased). The group's net revenue and net profit reached 34,400 billion VND and 2,970 billion VND, respectively, this is also the quarter with the best business results in the last 6 quarters.

 Expectations for 2024 are that HPG's consumption volume will improve due to an anticipated increase in demand from domestic construction activities. Solutions to alleviate the challenges in the real estate market aimed at safe, healthy, and sustainable development (Chinhphu.vn) are expected to stimulate the demand for

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infrastructure construction. According to a report by the World Steel Association, global steel demand is expected to increase again in 2024.

- Strong capital structure:

 As of December 31, 2023, total loan debt increased by 13% compared to the

beginning of the year (the purpose of the loan is to increase investment and put Dung Quat 2 into operation).

 Interest costs gradually decreased thanks to interest rates maintained at low levels. At the end of the period, HPG had more than 34.4 billion VND in cash and bank

deposits, accounting for 42% of total short-term assets.

 Currently and in the future, the government will promote public investment and infrastructure construction, so steel consumption demand will increase sharply with the expectation that Dung Quat 2 factory will come into operation in the coming years and will boost profits many businesses increased quite steadily.

- Gross margin improvement:

 Thanks to the anticipated decrease in raw material prices in 2024, with predicted reductions in iron ore and coke prices, the steel industry is expected to see an increase in profit margins (according to the World Bank).

 Dung Quat 2 project helps raise HPG valuation.

 Expect the Dung Quat 2 super project to come into operation. In the first quarter of 2025, when completed, steel production capacity will produce more than 14 million tons of crude steel per year, bringing Hoa Phat into the top 10 largest steel enterprises in the world. And when the Dung Quat project is completed, Hoa Phat will become a monopoly.

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<b>2.The stock code BSR belongs to "Binh Son Refining and Petrochemical Joint Stock Company" </b>

a.Information about the business

- BSR was established in 2008 and after 10 years of operation, the company transitioned to a joint-stock company format in 2018.

- Activities: The company primarily manages the Dung Quat Oil Refinery - the first and largest oil refinery in Vietnam at that time. The company's main activities are in the petrochemical refining sector, producing and selling products such as gasoline, diesel fuel, and other petrochemical products.

- The company was first listed in March 2018 and is listed on the UPCOM stock exchange with the ticker symbol BSR.

- The total number of company shares is 3,100.5 million. The oil and gas group holds 92.1% of the company's shares, with the remaining 8% being free-floating shares on the market. - Current price: 19,000 per share.

b.Reasons for choice - Competitive Advantage:

 As one of the leading oil refining companies in Vietnam, BSR has a large scale, with a production capacity of up to 6.5 million tons of oil per year. BSR plays a crucial role in Vietnam's energy sector, particularly in meeting domestic energy needs. The Dung Quat Oil Refinery fulfills a significant portion of the domestic demand for gasoline and diesel, reducing dependence on imports and helping stabilize domestic fuel prices.

 BSR shares are considered highly speculative, but the company also has a history of stable growth.

 Global oil prices are trending upwards again. Brent oil prices are expected to rise to around $85 per barrel. This increase will help boost the sales prices of BSR's petroleum products, thereby improving the company's gross margins in the coming period.

 Demand for gasoline and gas in Vietnam is growing steadily. According to forecasts by the Ministry of Industry and Trade, the demand for oil and gas in Vietnam is expected to grow at an average rate of 5-6% per year during the 2023-2025 period. BSR also owns the largest oil refinery in Vietnam, accounting for about 30% of the country's refining market share and has a solid competitive position.

- There are positive changes:

 In the first quarter of 2024, BSR shares had positive changes, with increased price fluctuations. Currently, crude oil prices are tending to bottom from June 2023 and have reached over 80 USD/barrel. Although there were times when oil prices touched 70 USD/barrel, the tightening of supply by the OPEC group or the cessation of production in some countries helped oil prices recover.

 Dung Quat oil refinery expansion project is being implemented. This project is expected to be completed by the end of 2025 and will help increase BSR's output by 16%.

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 Government Support: As a key player in the Vietnamese energy industry, BSR regularly receives government support in terms of policy and finance. This helps enhance the stability of operations and profitability.

 Profitability: Based on financial reports, the company has demonstrated good profitability, as reflected in stable profits and cash flows.

 Dividend Yield: BSR has a history of relatively stable dividend payouts, attracting investors seeking dividend income. In a low-interest-rate environment, stocks with appealing dividend yields can be a valuable alternative option.

 Financial Transparency and Stability: BSR regularly publishes detailed and transparent financial reports, allowing investors to closely monitor the company's financial status and operations. This enhances investor confidence in the company's management and supports long-term investment decisions.

 Long-term Growth Prospects: In addition to the positive trends in oil prices

supporting profit growth, BSR's long-term outlook is also highly regarded due to the expected sustained growth in gasoline and oil consumption.

III, Steps to open a trading account at a securities company, contracts, and relevant documents

Steps to open a trading account at a securities company Step 1: Register to open an account

Visit the website: start opening an account and fill in the following information: - Enter full name (with accents)

- Phone number - Personal email - Referral ID

-Then click on the "REGISTER" button.

Step 2: Upload ID card

Take photos of the front and back of your ID card, then:

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- Upload the photo of the front of your ID card - Upload the photo of the back of your ID card - Then click on the "CONTINUE" button.

Step 3: Confirm information

Double-check the accuracy of the information, then tick the box "I confirm that the

personal information provided above is accurate and agree to the terms & conditions related to the securities account at VPS." Then click on the "CONTINUE" button.

Step 4: Download SmartOne app

To fully utilize VPS services, download the SmartOne app and follow these instructions: Download the Vps SmartOne app on Google Play or the App Store

Log in using the username and password provided via SMS & Email

Sign in to the app, go to the account verification section, and follow the instructions. -Account Information:

+ Full Name: Chu Hạnh Quyên + ID Card Number: 001303045568

+ Depository Account Number: 026CN95107

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+ Securities Account Number: N95107 -Transaction History Matching Orders:

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.

IV, Fundamental Analysis in Stock Investment

To be able to invest effectively, we need to carefully analyze data such as:

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Our team will use fundamental analysis in stock investment because it focuses on evaluating the true value of a company based on fundamental business factors such as revenue, profit, financial structure, and future prospects. This method helps investors understand the

company's business operations and avoid the influence of short-term market fluctuations. By conducting fundamental analysis, investors can determine the actual value of a stock and make investment decisions based on a solid foundation.

<b>There are some general concepts: </b>

- Net revenue is the total amount of money received after deducting expenses related to various deductions (including: import and export taxes, returned revenue, sales discounts, trade discounts, etc.).

- Gross Profit is the amount of money received after deducting costs related to the production and sale of products/services from the company's revenue source.

- Net profit after tax is an important indicator for the development of a business. This is the remaining amount after deducting expenses and income tax.

- Equity is the capital source owned or contributed by the enterprise, jointly owned with investors, shareholders, joint venture members, creating resources to put the business into operation.

- Earnings Per Share (EPS) indicates how much profit per share an investor holds annually. - Book Value per Share (BVPS) is used to determine the value of a stock based on book figures, an investor typically pays attention to this indicator to compare with the market value of the stock.

- P/E ratio measures the relationship between market price (P) and earnings per share. P/E shows how much higher the current stock price is compared to the earnings from that stock, or how much an investor has to pay for one dollar of income.

- Return On Sales (ROS) is the profit margin on revenue. This index shows the profit rate based on the actual revenue of the business, evaluating how much profit a dollar of business revenue will bring.

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- Return On Assets (ROA) indicates how much profit a company generates from one dollar of assets.

- Return On Equity (ROE) indicates how much profit is generated from one dollar of equity. This ratio depends on the business season and also on the scale and risk level of the company.

<b>1. The financial figures for "Hoa Phat Group Joint Stock Company" for each quarter: </b>

- Increasing net revenue across quarters in 2023 indicates that the company has the ability to pay for various fees.

- The rise in Gross Profit from the second quarter of 2023 to the first quarter of 2023 shows that the profit after deducting costs related to the production and sale of products is

increasing, indicating a potential increase in dividend payments to shareholders.

- The net profit after tax for each quarter is increasing, reflecting the business performance and financial capacity for market development and investment, which is at a stable level. - Although short-term asset indicators and total assets are increasing, the short-term liabilities or short-term debts are also increasing. However, overall, the owner's equity is increasing from quarters in 2023 to 2024, indicating investors' confidence in Hoa Phat Company.

<b> - The increase in Earnings Per Share (EPS) in the quarters from 2023 to 2024 indicates that </b>

this is a good time to invest in the company as a higher EPS means higher income per share. - The rise in Book Value per Share (BVPS) from 2023 to 2024 shows that the book value of a share is increasing, indicating a high profit potential when selling.

- The decrease in P/E ratio from the third quarter of 2023 means that the stock prices are expected to decrease, limiting the potential for high dividend growth in the future.

- The slight increase in Return On Sales (ROS) and Return On Equity (ROE) indicates a high profit margin based on revenue or owner's equity, providing profit potential for investors.

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