KHÓA LUẬN VỀ HÀNG TỒN KHO TÀI SNAR CỐ ĐỊNH CÔNG TY CỔ PHẦN CẢNG ĐÀ NẴNG

THE UNIVERSITY OF DANANG
UNIVERSITY OF ECONOMICS

GRADUATION PAPER

Title: The efficiency of capital utilization
at Danang Port Joint Stock Company

Student’s name: DINH TRAN KIEU THIEN
Academic advisor: NGUYEN NGOC TRA

Danang, 2020


THE UNIVERSITY OF DANANG
UNIVERSITY OF ECONOMICS

GRADUATION PAPER

Title: The efficiency of capital utilization
at Danang Port Joint Stock Company

Being a graduation paper submitted in partial fulfillment of

the requirements for the degree of

Bachelor of Business Administration

in Danang University of Economics

Student’s Name: DINH TRAN KIEU THIEN

Class: 42K16-CLC
Specilization: FINANCIAL MANAGEMENT
Academic advisor: NGUYEN NGOC TRA

Danang, 2020


ACKNOWLEDGEMENT
I would like to express my gratitude and appreciation to all those who gave me the
possibility to complete this thesis. Foremost, a special thanks to my advisor Mr.
Nguyen Ngoc Tra for his assistance and suggestions throughout my thesis.
During these four months of internship, I worked in the Accounting Department at
Danang Port Joint Stock Company. I learnt a lot of tasks related to accounting and
finance. I am grateful to Mr. Nguyen Ngoc Tam who is the accounting manager, he
created a chance for me to practise here.
Besides, I would like to acknowledge with much appreciation the crucial role of the
staff in the Accounting Department at Danang Port Joint Stock Company, who gave
the permission to use necessary materials to complete my thesis.
Last but not least, I would like to thank my family for their constant source of
inspiration.

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ABSTRACT
The thesis analyses the efficiency of capital utilization at Danang Port Joint Stock
Company from 2015 to 2019. The ultimate goal of most companies is to maximize
profits. Thus, businesses constantly innovate, improve the quality of merchandise and
goods provided. Besides, firms regularly evaluate the business operations to make
financial solutions and decisions for achieving this goal. Hence, it is an essential issue

to evaluate the performance of the company.
The purpose of the thesis is to estimate, investigate and analyse the efficiency of
capital utilization at Danang Port Joint Stock Company which is based on a theoretical
framework about capital and analyse the efficiency of capital utilization at firms. In
addition, this thesis gives recommendations to improve the efficiency of capital
utilization at the company.

The thesis uses two basic methods to evaluate the

efficiency of capital utilization at Danang Port Joint Stock Company including:
financial ratio analysis and the Dupont analysis. Besides, this study uses data
collection and data analysis methods through the balance sheet and the income
statement over the period of 5 year. In addition, statistical method, general analytical
method and comparative method are also used in this thesis with Microsoft Excel to
analyse precise financial ratios.
In result, Danang Port Joint Stock Company got achievements related to the capital
management and utilization. Business activities of the company were more efficient
and better developed compared with main competitors in transportation and
warehousing industry in Vietnam. The company proved its position in the market
related to transportation and warehousing or support activities for the transportation
industry in Vietnam. Nevertheless, the company still has drawbacks related to the
management cash and cash equivalents and the collection of account receivable,
especially overdue receivables. Hence, I give some useful recommendations for the
company to improve its capital utilization.

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Keywords: capital utilization, efficiency, Dupont analysis, financial ratios analysis,
transportation and warehousing industry.

TABLE OF CONTENTS
ACKNOWLEDGEMENT..............................................................................................i
ABSTRACT..................................................................................................................ii
TABLE OF CONTENTS..............................................................................................iii
LIST OF FIGURES.....................................................................................................vii
LIST OF TABLES.........................................................................................................x
LIST OF ABBREVIATIONS.......................................................................................xi
INTRODUCTION.........................................................................................................1
CHAPTER 1

THEORETICAL FRAMEWORK RELATED TO CAPITAL AND

THE EFFICIENCY OF CAPITAL UTILIZATION AT THE COMPANY.....................3
1.1

Definition, characteristics, functions of capital at the company.......................3

1.1.1

Definition of capital...................................................................................3

1.1.2

Characteristics of capital............................................................................3

1.1.2.1

Importance of enhancing the efficiency of capital utilization.................3

1.1.2.2

Factors affecting the efficiency of capital utilization at company...........3

1.2

The literature review of the efficiency of capital utilization at the company....4

1.3

The methods of the thesis.................................................................................5

1.3.1

Comparative method..................................................................................5

1.3.2

Financial ratio analysis..............................................................................5

1.3.3

The Dupont analysis..................................................................................5

1.4

Financial ratios analysis about the efficiency of capital at company................7

1.4.1

Operating profitability ratios......................................................................7

1.4.2

Operating efficiency ratios.........................................................................7
3


1.4.3

Evaluating internal liquidity......................................................................7

CHAPTER 2

ANALYSIS ON THE EFFICIENCY OF CAPITAL UTILIZATION

AT DANANG PORT JOINT STOCK COMPANY......................................................7
2.1

Introduction of Danang Port Joint Stock Company..........................................7

2.1.1

Formation history and development process of company..........................7

2.1.2

Organizational structure of company.........................................................8

2.1.3

The competitors of company...................................................................10

2.2

Operation situation and business activities.....................................................12

2.2.1

Net sales of merchandise and services of Da Nang Port Joint Stock

Company situation...............................................................................................12
2.2.2

Expenses of Da Nang Port Joint Stock Company situation......................13

2.2.3

Net profit after tax of Da Nang Port Joint Stock Company situation.......14

2.3

The structure of assets and resources at Da Nang Port Joint Stock Company 14

2.3.1

The structure of assets at Da Nang Port Joint Stock Company................14

2.3.2

The structure of resources at Da Nang Port Joint Stock Company..........15

2.4

Evaluating situation of assets utilization at Danang Port Joint Stock Company
16

2.4.1

The situation of non-current asset utilization at Danang Port Joint Stock

Company.............................................................................................................. 16
2.4.2

The situation of current assets utilization at Danang Port Joint Stock

Company.............................................................................................................. 18
2.5

Financial ratio analysis about the efficiency of capital at Danang Port Joint

Stock Company........................................................................................................20
2.5.1

Evaluating of the efficiency of capital by operating profitability ratios...20

2.5.1.1

Return on sales (ROS) ratio..................................................................20

2.5.1.2

Return on asset (ROA) ratio.................................................................22
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2.5.1.3

Return on equity (ROE) ratio...............................................................24

2.5.1.4

Gross Profit Margin..............................................................................26

2.5.2

Evaluating of the efficiency of capital by operating efficiency ratios......29

2.5.2.1

Total asset turnover ratio......................................................................29

2.5.2.2

Fixed asset turnover ratio.....................................................................31

2.5.3

Evaluating of the efficiency of capital by evaluating internal liquidity....33

2.5.3.1

Current ratio.........................................................................................33

2.5.3.2

Quick (or Acid-Test) ratio.....................................................................36

2.5.3.3

Cash ratio.............................................................................................38

2.5.3.4

Inventory turnover................................................................................40

2.5.3.5

Inventory turnover period.....................................................................42

2.5.3.6

Receivable Turnover.............................................................................44

2.5.3.7

Receivable turnover in days.................................................................46

2.6

Overall evaluating of the efficiency of capital utilization at Danang Port Joint

Stock Company from 2015 to 2019.........................................................................47
2.6.1

The analysed results of the efficiency of capital utilization at Danang Port

Joint Stock Company from 2015 to 2019.............................................................47
2.6.2

The drawbacks of capital utilization at Danang Port Joint Stock Company

from 2015 to 2019................................................................................................49
CHAPTER 3
3.1

RECOMMENDATIONS...................................................................50

Development orientations of Danang Port Joint Stock Company...................50

3.1.1

Target for the period from 2016 to 2020..................................................50

3.1.2

Vision for the period from 2020 to 2030..................................................50

3.1.3

Development plans in the future..............................................................51

3.1.3.1

Business plan........................................................................................51
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3.1.3.2

Strengthening Management Capacity...................................................51

3.1.3.3

Investment plan....................................................................................52

3.2

Proposal solutions to improve the efficiency of capital utilization at Danang

Port Joint Stock Company.......................................................................................52
3.2.1

Solution 1: Definition the need for capital of the company and building

the suitable plans..................................................................................................52
3.2.2

Solution 2: The company should have suitable policies to enhance

collecting account receivables, especially overdue receivables...........................53
3.2.3

Solution 3: The company should have measures to prevent possible risks
54

CONCLUSION...........................................................................................................55
REFERENCES............................................................................................................57
APPENDIX A Financial ratios analysis about the efficiency of capital at company...59
APPENDIX B Overview of Danang Port Joint Stock Company................................68
APPENDIX C The balance sheet of Danang Port Joint Stock Company from 2015 to
2019............................................................................................................................. 69
APPENDIX D The income statement of Danang Port Joint Stock Company from
2015 to 2019................................................................................................................90

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LIST OF FIGURES
Figure 1.1 The Dupont System (Source: DuPont Analysis by NTA).............................6
Figure 2.1 Organizational Chart (Source: Annual Report 2019, Danang Port Joint
Stock Company.............................................................................................................. 9
Figure 2.2 Net sales of merchandise and services of Da Nang Port Joint Stock
Company situation from 2015 to 2019, unit: VND.....................................................12
Figure 2.3 Expenses of Da Nang Port Joint Stock Company from 2015 to 2019, unit:
VND............................................................................................................................ 13
Figure 2.4 Net profit after tax of Da Nang Port Joint Stock Company from 2015 to
2019, unit: VND..........................................................................................................14
Figure 2.5 The structure of assets at Da Nang Port Joint Stock Company from 2015 to
2019, unit: %................................................................................................................ 14

Figure 2.6 The structure of resources at Da Nang Port Joint Stock Company from 2016
to 2019, unit: %...........................................................................................................15
Figure 2.7 The structure of non-current assets of Da Nang Port Joint Stock Company
from 2015 to 2019, unit: %..........................................................................................17
Figure 2.8 The structure of current assets of Danang Port Joint Stock Company from
2015 to 2019, unit %....................................................................................................18
Figure 2.9 Return on sales of Danang Port Joint Stock Company from 2015 to 2019,
unit: %......................................................................................................................... 20
Figure 2.10 The comparison return on sale ratio of Danang Port Joint Stock Company
with main competitors from 2015 to 2019, unit: %.....................................................21
Figure 2.11 Return on assets of Danang Port Joint Stock Company from 2015 to 2019,
unit: %......................................................................................................................... 22
Figure 2.12 The comparison return on assets ratio of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: %....................................23

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Figure 2.13 Return on equity of Danang Port Joint Stock Company from 2015 to 2019,
unit: %......................................................................................................................... 24
Figure 2.14 The comparison return on equity ratio of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: %....................................26
Figure 2.15 Gross profit margin of Danang Port Joint Stock Company from 2015 to
2019, unit: %................................................................................................................ 26
Figure 2.16 The comparison gross profit margin ratio of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: %....................................28
Figure 2.17 Total asset turnover ratio of Danang Port Joint Stock Company from 2015
to 2019, unit: times......................................................................................................29
Figure 2.18 The comparison total asset turnover ratio of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: times...............................30

Figure 2.19 Fixed asset turnover ratio of Danang Port Joint Stock Company from 2015
to 2019, unit: times......................................................................................................31
Figure 2.20 The comparison fixed asset turnover ratio of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: times...............................32
Figure 2.21 Current ratio of Danang Port Joint Stock Company from 2015 to 2019,
unit: times.................................................................................................................... 33
Figure 2.22 The comparison current ratio of Danang Port Joint Stock Company with
main competitors from 2015 to 2019, unit: times.......................................................35
Figure 2.23 Quick ratio of Danang Port Joint Stock Company from 2015 to 2019, unit:
times............................................................................................................................ 36
Figure 2.24 The comparison quick ratio of Danang Port Joint Stock Company with
main competitors from 2015 to 2019, unit: times.......................................................37
Figure 2.25 Cash ratio of Danang Port Joint Stock Company from 2015 to 2019, unit:
times............................................................................................................................ 38

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Figure 2.26 The comparison cash ratio of Danang Port Joint Stock Company with
main competitors from 2015 to 2019, unit: times.......................................................39
Figure 2.27 Inventory turnover of Danang Port Joint Stock Company from 2015 to
2019, unit: times..........................................................................................................40
Figure 2.28 The comparison inventory turnover of Danang Port Joint Stock Company
with main competitors from 2015 to 2019, unit: times................................................41
Figure 2.29 Inventory turnover period of Danang Port Joint Stock Company from 2015
to 2019, unit: days........................................................................................................42
Figure 2.30 The comparison inventory turnover period of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: days................................43
Figure 2.31 Receivable turnover of Danang Port Joint Stock Company from 2015 to
2019, unit: times..........................................................................................................44

Figure 2.32 The comparison receivable turnover of Danang Port Joint Stock Company
with main competitors from 2015 to 2019, unit: times...............................................45
Figure 2.33 Receivable turnover in days of Danang Port Joint Stock Company from
2015 to 2019, unit: days...............................................................................................46
Figure 2.34 The comparison receivable turnover in days of Danang Port Joint Stock
Company with main competitors from 2015 to 2019, unit: days................................47

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LIST OF TABLES
Table 2.1 The structure of current asset at Danang Port Joint Stock Company from
2015 to 2019, unit: million VND.................................................................................18
Table 2.2 Return on sales of Danang Port Joint Stock Company from 2015 to 2019...20
Table 2.3 Return on assets of Danang Port Joint Stock Company from 2015 to 2019. 22
Table 2.4 Return on assets of Danang Port Joint Stock Company from 2015 to 2019. 24
Table 2.5 The relationship between ROA, ROE and financial leverage of Danang Port
Joint Stock Company from 2015 to 2019.....................................................................25
Table 2.6 Gross profit margin of Danang Port Joint Stock Company from 2015 to 2019
..................................................................................................................................... 27
Table 2.7 Total asset turnover ratio of Danang Port Joint Stock Company from 2015 to
2019............................................................................................................................. 29
Table 2.8 Fixed asset turnover ratio of Danang Port Joint Stock Company from 2015 to
2019............................................................................................................................. 31
Table 2.9 Current ratio of Danang Port Joint Stock Company from 2015 to 2019.......33
Table 2.10 Quick ratio of Danang Port Joint Stock Company from 2015 to 2019.......36
Table 2.11 Cash ratio of Danang Port Joint Stock Company from 2015 to 2019.........38
Table 2.12 Inventory turnover of Danang Port Joint Stock Company from 2015 to
2019............................................................................................................................. 40
Table 2.13 Inventory turnover period of Danang Port Joint Stock Company from 2015

to 2019......................................................................................................................... 42
Table 2.14 Receivable turnover of Danang Port Joint Stock Company from 2015 to
2019............................................................................................................................. 44
Table 2.15 Receivable turnover in days of Danang Port Joint Stock Company from
2015 to 2019................................................................................................................46

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LIST OF ABBREVIATIONS
ASEAN: The Association of Southeast Asian Nations
FDI: Foreign Direct Investment
FTAs: Free Trade Agreements
ROE: Return on equity
ROS: Return on sales
ROA: Return on assets
CFS: Container Freight Station
KPI: Key Performance Indicator
COC: Change of control
GT: Gross tonnage

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INTRODUCTION
In recent years, the transport and warehousing industry has grown strongly and played
an important role in the global integration process of Vietnam. With strong growth,
Vietnam got the third largest number of containers by seaway in the ASEAN region,
just ranked after Singapore and Malaysia [ CITATION Nguyen \l 1033 ]. Besides, FDI
capital is constantly being supplemented with enhancing international trade

integration. Through FTAs, this industry is expected to maintain growth in the future,
especially development by seaway. Vietnam's transport and warehousing industry is
growing well and the prediction for development is still very large. All companies in
this industry have to focus on improving the weak points so that the firms reach the
maximum business outcomes. Thus, analyzing the efficiency of capital use plays an
important role in analyzing business performance of enterprises for achieving its final
goal. Regarding Joint Stock Companies, the efficiency of capital utilization should be
regularly evaluated to give some solutions to improve its efficiency of capital
utilization.

This paper aims to investigate and analyse the efficiency of capital utilization at
Danang Port Joint Stock Company. The efficiency of capital utilization at Danang Port
Joint Stock Company is analyzed based on two methods which are financial ratios
analysis and the Dupont analysis. The analysis is performed using the company
financial statements including balance sheets and income statements from 2015 to
2019. In addition, financial ratios of Danang Port Joint Stock Company will compare
with main competitors in this industry at the same period to evaluate objectively the
efficiency of capital utilization of the company. Finally, it gives useful
recommendations to improve the efficiency of capital utilization at companies for
achieving its final goal.

Regarding the company in this study, Danang Port is located in Danang city which
plays a central socio-economic role in Central Vietnam. Besides, Danang Port with the
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capacity to exploit containers belong to the top 10 of Vietnam's container seaports. The
company focuses on logistics services with a goal that becomes the main local
logistics of the central region in Vietnam. Therefore, the analysis of the efficiency of
capital utilization at Danang Port Joint Stock Company is an essential issue to improve

its business outcomes for a good contribution to Vietnam’s economy in the future.
Structure of the paper
Chapter 1: Theoretical framework related to capital and the efficiency of capital
utilization at the company
Chapter 2: Analysis on the efficiency of capital utilization at Danang Port Joint Stock
Company
Chapter 3: Recommendations

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CHAPTER 1

THEORETICAL FRAMEWORK

RELATED TO CAPITAL AND THE EFFICIENCY OF
CAPITAL UTILIZATION AT THE COMPANY
1.1 Definition, characteristics, functions of capital at the company
1.1.1 Definition of capital
There are two kinds of capital including financial capital and physical capital.
However, this thesis focus on financial capital.
1.1.2 Characteristics of capital
1.1.2.1 Importance of enhancing the efficiency of capital utilization
The efficiency of capital utilization is a significant factor directly to enhance profit of a
company, this effect to survival, development of a firm. Hence, a company with the
efficiency of capital utilization will support the company to increase revenue, enhance
prestige and define the value of business. Besides, it creates conditions for helping
businesses to update the latest technological equipment to enhance quality, the
diversity of products,... to meet the demand of customers and increase competitive
ability in the market. In addition, the efficiency of capital helps companies to develop,

expand production’s large scale, create opportunities, enhance qualification and
standard living for employees in business.
1.1.2.2 Factors affecting the efficiency of capital utilization at company
There are many factors affecting the efficiency of capital utilization at the company.
The capital utilization is affected by interplay between internal and external elements
in business. It has both positive and negative impacts. Thus, companies also managers
have to care about elements mentioned above.
Firstly, the hash situation of the economy such as the high cost of goods sold, the
scarce raw materials and huge inventory from unsold products due to low purchasing
ability. These factors influenced negative capital utilization at the company
[CITATION Jos12 \p 157 \l 1033 ]. In addition, the impact of some macroeconomics
3


used as factors for forecast of capital utilization including inflation rate, real exchange
rate, ratio of import of manufactures to GDP, ratio of federal government expenditures
to GDP and ratio of foreign direct investment on GDP[CITATION Jos12 \p 158 \l 1033
].
1.2 The literature review of the efficiency of capital utilization at the company
According to previous research papers, the efficiency of capital utilization of a
company or an industry is based on two methods namely financial ratio analysis and
the Dupont analysis.
ZHAO (2009) analyzed the factors of capital utilization and their effects on the
operating efficiency for a range of non-life insurers over the period 2002-2007. The
results show that capital over-utilization has a significantly negative effect on revenue
efficiency ROE, but capital under-utilization has no important effect on operating
performance. However, non-life insurers have raised capital in the last few years. Due
to the inefficiency in capital utilization, the capital increase has sharply negative
effects on ROE and revenue efficiency, reflecting the demand of the market for
improving solvency. Hence, after raising capital to meet the solvency requirement, the

non-life insurers must make great efforts to increase the capital utilization to enhance
the operating performance.
Elena Rogova (2014) analyzed factors of efficiency of oil-extracting firms in Russia.
The study shows the steady growth of indicators and ratios that have an importance for
its current and potential investors. In this paper, DuPont analysis was made to illustrate
factors of efficiency with the sample consisting of companies that were included at
“The Energy Intelligence Top 100” over the period of 2008 – 2012. Besides, on the
base of the regression analysis the impact of factors on ROE was investigated. The
results of this paper demonstrate the importance of the effective operating activity in
the industry.
WANG Hong-hai, CAO Xin-yi, WANG Xiu-qi (2014) analyzed efficiency of
utilization cash-oriented Dupont financial system in listed port corporations. The
article shows the cash flow index to support the present new Dupont financial analysis
4


system which can reflect financial conditions of listed firms. Based on the defects of
the traditional DuPont financial analysis system, authors use the LMDI index to
modify the traditional interlocking substitution and avoid proportion imbalance. The
result of using the new DuPont financial analysis system to analyze the financial
reports of listed Port corporations and propose some suggestions on how to improve
the financial efficiency.
According to the studies mentioned above, the LMDI index uses industry to determine
the way to improve financial efficiency clearly. In addition, this method analyses one
of the elements' effect on capital utilization, which is based on improving the weakness
of traditional DuPont analysis. In this paper, the topic focuses on capital utilization by
analysing financial parameters and does not analyse other specific aspects. Hence, this
research will apply two basic methods including financial ratio analysis and the
Dupont analysis to estimate the efficiency of capital utilization at Danang Port Joint
Stock Company.

1.3 The methods of the thesis
1.3.1 Comparative method
Comparative method is a popular method to define, compare the variable trend of
capital through financial ratios. To apply this method, Danang Port Joint Stock
Company will compare the capital utilization at this period with this figure the period
before. In addition, financial ratios of Danang Port Joint Stock Company will compare
with main competitors at the same scope. In which, the result of that comparison is
relative value.
1.3.2 Financial ratio analysis
The performance of a company is evaluated in the context of its industry and
competitive strategies. Thus, financial statement ratios are the most common tools
used for this purpose. In practice, financial analysis evaluates the past performance of
a firm using its financial statements and related information and seeks to determine the
sustainability of that performance[CITATION SDa19 \p 115 \l 1033 ]. Hence, ratio

5


analysis focuses on the relationships between two or more financial statement numbers
[CITATION SDa19 \p 119 \l 1033 ].
1.3.3 The Dupont analysis
To study changes in return on invested capital (ROIC) over a period and to better
explain differences between a firm’s profitability and that of its competitors. Thus,
return on invested capital can be disaggregated using Dupont [CITATION SDa19 \p
"122, 123" \l 1033 ]. Dupont analysis progressively disaggregates, or breaks down,
broad measures of profitability like ROIC into two or more constituent elements.

Formula:

Figure 1.1 The Dupont System (Source: DuPont Analysis by NTA)

Or

In addition, the Dupont system separates the ratio into multiple components providing
insight into causes about the ROE indicator of a company and any fluctuations in it.
6


1.4 Financial ratios analysis about the efficiency of capital at company
1.4.1 Operating profitability ratios
This is financial ratios to evaluate the efficiency of the capital utilization: return on
sales (ROS), return on assets (ROA) and return on equity (ROE).
1.4.2 Operating efficiency ratios
Operating efficiency ratios show the management of using assets and capital and
evaluate sales created by asset or capital categories. This ratio includes total assets
turnover and fixed asset turnover.
1.4.3 Evaluating internal liquidity
Internal liquidity (or solvency) ratios represent the ability to pay off short-term
financial obligations in the future. They compare short-term liabilities with current
resources available to meet these obligations. This ratio includes current ratio, quick
ratio, cash ratio, inventory turnover, inventory turnover period, receivable turnover and
receivable turnover in days.

CHAPTER 2

ANALYSIS ON THE EFFICIENCY OF

CAPITAL UTILIZATION AT DANANG PORT
JOINT STOCK COMPANY
2.1 Introduction of Danang Port Joint Stock Company

2.1.1 Formation history and development process of company
Danang Port was established in 1901 with a history of 115 years about construction
and development, Da Nang Port has proved its important role in the socio-economic
development of the region as confirmed stature is the largest seaport in central
Vietnam today. Danang Port is located in Da Nang City, a dynamic city that plays a
central socio-economic role in Central Vietnam, with its natural geographic location
located in Da Nang Bay with 12 km2 wide, depth of 10 - 17 meters, surrounded by Hai
Van mountain and Son Tra peninsula, airtight with 450 meters long breakwater is
convenient for ships to anchor and do cargo year-round. With a history of over 100
7


years of establishment and development, Danang Port is currently the largest seaport
in Central Vietnam. Goods exported - imported through the Port, according to 1A
National Highway to the provinces in the North and South of the City, according to
14B Highway to the Central Highland provinces and countries of Laos, Cambodia, and
Thailand. Danang Port has 01 main port - Tien Sa Port.
According to the development plan of the Vietnam seaport system, Danang Port is
defined as a major port in the region. In which, Tien Sa Port has a container wharf area
with a system of warehouses, breakwaters, modern specialized equipment, serving
goods trading and economic and tourist development for the hinterland, including the
central provinces, Central Highlands, Southern Laos and Northeast Thailand through
the East-West Economic Corridor.
Currently, Danang Port is gradually implementing the environmental management
system ISO 14001:2010 to protect the environment for sustainable development. The
company has gradually been asserted in the maritime industry and region due to the
efficient find customers, maintaining the relationship with a partner network, the
combination between promotion and development about the market. With these
achievements, Danang Port was honored to be given some awards and medals by the
government.

According to the Enterprise Registration Certificate No. 0400101972 issued by
Danang Department of Planning and Investment for the sixth time of registration on
February 14, 2019, the main the company's business lines include transportation cargo
by road, seaport and river port, storage and warehouses services, trading products
related to solid, gas fuels and rental services about vehicles.
2.1.2 Organizational structure of company
According to the annual report of the company in 2019, at 31/12/2019, Danang Port
had 674 employees, in which: 85 employees at 26 Bach Dang Office, 589 employees
at Tien Sa Port.
The organizational structure of the Company follows the model of a joint stock
company as follows:
8


- General Meeting of Shareholders;
- Board of Management;
- Supervisory Board;
- Board of Directors

Figure 2.2 Organizational Chart
(Source: Annual Report 2019, Danang Port Joint Stock Company

In detail, the General Meeting of Shareholders is the highest authority of the company.
Members of the Board of Management are selected by General Meeting of
Shareholders according to the principle of direct election and closed ballot. The
number of members of the Board of Management is seven people. Supervisory Board
is elected by the General Meeting of Shareholders, on behalf of shareholders to check
and supervise business, management and administration activities of the Company.
Number of members of the supervisory Board is three people. The Executive Board
includes General Director and Deputy General Directors. From the above picture, it

can be seen that there are various departments such as: Human resource; Technology;
Construction; Planning - Investment; Accounting - Finance; Sales; Operation; General
Administrative and Promotion - Investment Department, with affiliations is Tien Sa
Port.
9


In brief, the organizational structure of the company is quite simple. It ensures quality
of operation, business, planting, investment and also technology qualifications. The
most important goal is the efficiency of business. In addition, the company provides
some useful services for its affiliations to meet the demand of customers by supporting
main services for waterway transportation.
2.1.3 The competitors of company
According to the annual report of Danang Port Joint Stock Company, the main
competition of local ports as well as regional ports mentioned in which especially Chu
Lai-Truong Hai Port. However, this main competitor hasn't published on the stock
exchange. Therefore, this theis can’t find material for comparison with this main
competitor.
In Vietnam, there are seven port groups, in which there are three main port groups
including port groups in the northern, port groups in the center region and port groups
in the southern region [CITATION Ste17 \p 411 \l 1033 ]. Danang port belonged to a
port group in the middle of the center region. In detail, the main competitors of
Danang Port Joint Stock Company at center region such as Chan May Port (belonged
to Hue province), Dung Quat Port (belonged Quang Ngai province) in the same port
group. Three companies have general main business scope related to loading and
unloading cargo by road, seaport, shipping agency, sea transportation; port services
and warehousing services.
Chan May Port belonged to the management of Chanmay Port Joint Stock Company.
The company was established in 1996. Chan May port is a general focal seaport (type
1) of Vietnam, also one of 46 ports chosen to be the destination for cruise ships in

South-East Asia by Asia Cruise Association. The port is located conveniently on the
sea route linking Singapore, the Philippines and Hong Kong [ CITATION Cha11 \l
1033 ].This is a potential port in the center region and also a close competitor of
Danang Port Joint Stock Company.
Dung Quat Port belonged to the management of Gemadept Corporation. In special,
Gemadept Corporation controls the majority of port groups in the southern center
10


region of Vietnam including Phuoc Long Port, Binh Duong Port, Gemalink Port and
Nam Hai Port which are deep sea port, large scale and organized national port of
region. Gemadept Corporation established in 1990 and was among the first 3
companies being selected by the government for equitization in 1993. From 2002,
Gemadept was officially listed on the Vietnam Stock Exchange. After almost 30 years
of establishment and development, Gemadept is proud to be the pioneer in many
sectors. With utmost striving and efforts, Gemadept is one of the leading enterprises in
its core businesses including Port operation and Logistics in Vietnam market
[CITATION GEM20 \l 1033 ].
According to the annual report in 2019, with the target for the period from 2016 to
2020, Danang Port will be a seaport with the capacity to exploit containers belong to
No. 1 in the local area and also the essential company of Vietnam. It focuses on
logistics services to contribute to the construction of Da Nang into a local logistics
center of Central Vietnam. Danang Port faced competitions from port groups in the
northern and in the southern region. In detail, Hai Phong Port and Cat Lai Port are the
essentials of port groups in the northern and in the southern region respectively
[CITATION Ngu19 \p 5,6,7 \l 1033 ].
In Hai Phong Port belonged to the Port of Hai Phong Joint Stock Company which is
located in Hai Phong city. Port of Hai Phong Joint Stock Company established in
1874. The Port of Haiphong has been recognized as the largest seaport in the north of
Vietnam by cargo volume which offers advanced facilities and complete and safe

infrastructure suitable for multi-modal transportation and international trade
[ CITATION Por20 \l 1033 ].
Regarding Cat Lai Port, the largest port in the southern region belonged to the
management of Cat Lai Port Joint Stock Company. The company was established in
2007 where transport up to 70% the amount of products from Vietnam to foreign
countries and conversely from other nations to Vietnam [CITATION Ngu19 \p 7 \l
1033 ].

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In brief, the thesis compares the efficiency capital utilization between Danang Port
Joint Stock Company and four main competitors in local area as well as regions in
Vietnam which mentioned above.
2.2 Operation situation and business activities
2.2.1

Figure 2.3 Net sales of merchandise and services of Da Nang Port Joint Stock Company situation
from 2015 to 2019, unit: VND

Object 3

Net sales of merchandise and services of Da Nang Port Joint Stock Company
situation
From the chart, there was a sharp increase in net sales of merchandise and services at
the company over the 5 year period. In detail, the lowest net sales was about 573,239
million VND in 2015 while the highest figure was roundly 823,758 million VND in
2019. The increasing net sales indicates that revenue earned from merchandise and
services of the company is growing steadily. It is a good point about the business
situation of the company over the period.

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