1

Power Engineering Consulting Joint Stock

Company 3
Summary
Power Engineering Consulting JSC was established in
2005, based on Energy Center. The company form were
changed in to Joint Stock Company and listed on Hanoi Stock
Exchange on 26th January, 2007.
TV3 is a small cap firm with the main activities are
survey consultancy, projects design in the power
sector. EVN is the largest shareholder of TV3, so the
company has always received a lot of supports from EVN.
A stable growing firm. In the period 2008-2013, though
the crisis affected all aspects of the economy, the companys
revenue still increased from 2008 to 2011. In 2012 and 2013,
its revenue decreased but still maintained at a high level.
Potential. Doing business activity in an essential area, with
a quite big amount of cash and stable debt ratio, TV3 has
good growth potential in the future when the Vietnam
economy has many good signs of change.

Key financial ratios: in VND million


Key ratios 2010 2011 2012 2013
Revenue

179,735 212,096 192,567

178,105
EBITDA 19,614 17,499 13,920 12.808
Net income 16,889 18,818

12,141 10,929
EPS (VND) 4,993 4,383 3,437 3,236
ROE (%) 30% 25% 19% 16%
ROA (%)
10% 9% 6% 6%
PER (x)
2.9 2.3 2.4 4.2
PBR (x)
0.9 0.6 0.5 0.7
OFFERINGS
Current price: 16,500
Target price:
Overview:
TV3 is one of four consulting units of the Vietnam
Electricity Group. The development trend of company
in the future is maintaining and enhancing strengths
in the field of surveying, designing power network
project and electricity development plan.
Stock code TV3
Exchange HNX
No of shares 3,381,000
Price (VND) 16,500
Market capital (VND bil) 55.8
52-week low 8,500
52-week high 18,500

Main shareholders:
EVN 48.8%
Ho Chi Minh City Power
Corporation 12.5%
Others 38.7%
Stock performance

Source: HVS Research

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TV3 HNX






FOR CLIENTS PROSPERITIES
Power Engineering Consulting JSC
Analysis
16 May 2014

2

Power Engineering Consulting Joint Stock Company 3
Company description
Business operation Power Engineering Consulting Joint
Stock Company 3 is one of four consulting companies under
Electricity of Vietnam, specialized in implementation of
construction consultancy for power source and network
projects such as: thermal power plants, hydro power plants,
power transmission lines, etc. They have two branches in Ho
Chi Minh and Nha Trang City and a representative office in
Hanoi. They have been implementing many big projects
about investigation and consultancy in the electric field
across the country.
Revenue of company came mainly from investigation and
design consultancy activities, which contribute more than
96% revenue and 97% profit in average. These activities
have been the traditional business areas of the company so
far. Particularly in 2013, the profit proportion of these ones
decreased because the company had an unusual income,
which led to the increase of Other revenues.
Cost The proportion of COGS was quite stable over years,
accounted for approximately 77% of revenue, while General
and administrative expenses accounted has tended to
increase, indicating the weak costs management.
Shareholders structure The main shareholders of TV3 are
Ho Chi Minh City Power Corporation and Viet Nam Electricity
(EVN). These are large state-owned companies and have a
big influence in this sector. EVN is the leading corporations
in the energy sector not only in Vietnam, but also the whole
region, playing an important role in the mission of ensuring
the national energy security.
The amounts of cash has been big and increasing over the
years, which helped company ensure the Current liabilities,
purchasing commodities and creating revenue from the
deposit interest. But it could be the evidence which showed
that the company lacked of investment, using money
inefficiently.
Risk The competition with both domestic and foreign
companies is increasing. Besides, due to the difficult
economic situation, the basic projects were also difficult to
meet the capital.


Summary financial statements of TV3
Sales breakdown

Source: TV3 annual report 2013

Sales & profit growth (VND million)

Source: TV3

Key shareholders

Source: TV3




23%
70%
7%
Survey consultancy , designing Others
179,735
212,096
192,567
178,105
16,881 14,818
12,144 10,938
-
50,000
100,000
150,000
200,000
250,000
2010 2011 2012 2013
Revenue Net income
48.8%
12.5%
38.7%
EVN Ho Chi Minh City Power Corporation Others

3

Power Engineering Consulting Joint Stock Company 3
Balance sheet Income statement

VND billion 2010 2011 2012 2013
Current asset 147.8 142.9 158.3 167.6
Cash 16.0 24.9 23.9 54.8
ST investment 0.0 0.0 0.0 0.0
Receivables 86.8 81.9 105.0 85.0
Inventory 34.9 30.0 22.3 20.8
ST assets 10.1 6.0 7.1 7.0
LT assets 27.3 30.1 30.0 29.9
Fixed assets 21.6 23.5 23.5 21.9
LT investment 3.9 4.6 4.7 5.8
Others LT assets 1.8 2.1 1.9 2.2
Total asset 175.2 173.0 188.2 197.5
Liabilities 119.3 112.6 125.5 130.1
Current liabilities 118.5 111.6 125.5 130.1
LT liabilities 0.7 1.0 0.0 0.0
Owner equity 55.9 60.4 62.7 67.5
Paid-in capital 33.8 33.8 33.8 33.8
Retained earning 16.9 17.4 12.1 11.5
Others 5.2 9.2 16.8 22.2
Total resources 175.2 173.0 188.2 197.5

Cash flow statement Key investment index

VND billion 2010 2011 2012 2013 2010 2011 2012 2013
Profit before tax
22.5 19.8 16.1 15.3
Per share data
Adjustments

EPS
4,993 4,383 3,437 3,236
- Depreciation
2.7 2.7 1.8 1.9
BPS
16,535 17,870 18,558 19,951
- Others
0.6 -0.6 1.2 -0.3
EBITDA per share
5,801 5,176 4,117 3,788
CF after adjustments 25.9 21.9 19.2 16.8
P/E 2.9 2.3 2.4 4.2
Changes in w/c -34.9 -1.0 -11.2 28.7
P/B 0.9 0.6 0.5 0.7
Other in/out flow -3.1 -2.7 -4.0 -1.8
EV/EBITDA 2.5 2.0 2.0 3.6
Operating activities -12.1 18.2 4.0 43.8
Dividend yield 14% 20% 18% 11%
Changes in LT assets -1.0 -3.8 -2.4 -1.2 Profitability
Changes in ST +LT
investment
-0.9 0.7 0.5 0.0
Gross margin
27% 22% 23% 23%
Investment activities -1.9 -3.1 -1.9 -1.2 Operating margin 13% 11% 9% 8%
Share issuance Net margin 9% 7% 6% 6%
Change in fund and
reserves

ROE
30% 25% 19% 16%
Changes in ST & LT debt 6.1 -3.1 0.3 -3.0 ROA 10% 9% 6% 6%
Financial profit Stability
Dividend 0.0 -3.2 -3.5 -8.3 Debt ratio 0.68 0.65 0.67 0.66
Financial activities 6.1 -6.3 -3.1 -11.3 Current ratio 1.25 1.28 1.26 1.29
Changes in cash -7.9 8.9 -1.1 31.3 Quick ratio 0.95 1.01 1.08 1.13
Activity ratio turnover
Opening cash
23.8 16.0 24.9 23.9
Receivables 2.07 2.59 1.83 2.10


Inventories
3.78 5.49 6.70 6.60
Ending cash
15.9 24.7 23.7 55.0
Payable
1.17 1.52 1.22 1.06

VND billion 2010 2011 2012 2013
Total revenue 179.7 212.1 192.6 178.1
Growth 11% 18% -9% -8%
COGS 131.9 164.7 149.2 137.2
Gross profit 47.8 47.4 43.3 40.9
Gross margin 27% 22% 23% 23%
Financial profit 0.7 1.3 1.1 1.3
Financial expenses 0.3 0.5 0.4 0.2
Selling expenses - - - -
% on sales 0% 0% 0% 0%
Admin expenses 24.2 25.2 26.8 28.6
% on sales 13% 12% 14% 16%
Operating profit 24.1 22.9 17.3 13.4
Operating margin 13% 11% 9% 8%
Other profit (1.6) (3.1) (1.2) 1.9
Profit from associates 0 0 0 0
Before tax profit 22.5 19.8 16.1 15.3
Income Tax 5.6 5.0 4.0 4.4
Net income 16.9 14.8 12.1 11.0
Net margin
9% 7% 6% 6%