DABACO VIETNAM CORPORATION Ticker: DBC (Hanoi Stock Exchange) Dec 2009 INTRODUCTION Dabaco has diversified businesses. Feedstuff production contribute 80% of revenue and profit. Dabaco s feedstuff products occupied 20% market share in the North, equivalent to 6% of the country. Wide distribution network of 700 level I distributors Hold a complete value chain: Breeds Feeds Production Breeding Food Processing. The first feedstuff manufacturer received ISO 9001 in 2001. The only feedstuff manufacturer listed in the stock exchange 1
OPERATION 22 factories and subsidiaries: 08 1-membership limited companies operating in: pig and poultry breeding, food processing, trading, package producing 01 joint stock company producing fish feed in the South 05 factories producing feed for cattle, poultry and fish. 02 farms producing pig breed 01 farm producing duck breed 01 farm producing poultry breed Other subsidiaries including restaurant, supermarket and gas station 2 Branches in Hanoi and Hochiminh City and 03 affiliates FEEDSTUFF PRODUCING Feedstuff for cattle and poultry 04 feedstuff processing factories, includes: DABACO, TOPFEEDS, NUTRECO and a concentrated feed factory with total capacity of over 500,000 ton/year. 06 brand names: Dabaco, Topfeeds, Nasaco, Khang ty Vina, Growfeeds and Kinh Bac A range of 200 products to meet all demand of every stage of growth of domestic animal. Fish feed: Kinh Bac Aquacultural feed processing factory with capacity of 4 ton/hour, which produces 14 products for fish, catfish, frogs. 2
FACTORIES TOPFEEDS DABACO Kinh Bac Concentrated Feed Factory BREED RAISING Chicken breed Pig breed Duck breed 3
PIG AND POULTRY BREEDING Breeding is a part of Dabaco s value chain to supply fresh material for food processing factory at the end of 2009. Poultry breeding is managed by Poultry Processing Investment Development Limited Company, with capacity of 250,000-300,000 lean chickens/month. Pig breeding is managed by Dabaco Pig Processing Investment Development Limited Company, with total capacity of 20,000 cubs/herd, monthly supply over 3,000 lean pigs SECTOR REVIEW Breeding industry has highest growth in agricultural production, contribute about 24% of total agricultural production value Growth of breeding industry 1990-2000 2000-2007 2008-2010 2011-2015 2015-2020 Growth rate 6,1% 6,7% 7,8% 6,5% 5,5% 4
FEEDSTUFF INDUSTRY Feedstuff output grows in line with the growth of cattle, poultry and aqua products output. Pig feeds occupy 77% and poultry feeds occupy 21% of total feedstuffs output Cattles feeds producing industry has high growth potential Barrier to entry. Highly competitive. DABACO S STRATEGY Expand the business to cover the whole value chain: breed raising feedstuff producing breeding - food processing: Focus on key feedstuff products for cattles, poultry, aqua animals. Develop high quality breed and feedstuff. Improve productivity of breeding. Develop high hygiene standard for food processing system Expand to the South Investment in new projects Que Vo 3 Industrial Zone, Que Vo 3 Urban Area Resident house project in Huyen Quang 2 Street, Resident houses project in Ho Town Dabaco Material Preliminary Processing Factory in the West- North Breeding Eco Park. 5
SWOT ANALYSIS Strengths Good management. Strong support from the country s leaders, ministries Strong distribution system with long-term commitment to Dabaco Complete value chain. Large scale, good brand name. Healthy balance sheet. High revenue growth: 50-60% in 2007-2008 Opportunities Large market with high growth potential The State has focused on agriculture production. Goverment s Policies are encouraging and supporting breeding and healthy foods. Weaknesses Less experience in new products and new investment Short of high quality human resource to develop into large corporation Challenges Diseases. Exposure to international price volatility More competitive market PROJECTS IN PROGRESS Projects Que Vo 3 Industrial Zone ( Phase 1) Residential area on Ly Thai To street Scope (ha) Capital (VND bil) Duration 303,8 1.118 2009-2012 Status Land clearance in progress 0,32 42 2009-2010 Constructing Feeding farm & Eco park 12,6 108 2009-2010 Nutreco Hoan Son Feed Factory 3,5 145 2009-2010 Food processing Factory 3,3 43 2008-2009 Construction in progress. Complete in 2Q 2010. Construction in progress. Complete in 2Q 2010. To be completed 4Q 2009 6
OTHER PROJECTS Projects Residential area Huyen Quang 2 Residential area in Ho town Dabaco Hospital in Bac ninh Trading & Service centre in Khac Niem Fish meal processing Factory in Cat Ba- Hai Phong Scope (ha) Capital (VND billion) Duration 1,3 n.a 2009-2010 5,3 n.a 2009-2010 1 n.a 2009-2010 13 n.a 2009-2010 1,67 45 2010-2011 Status Detail plan to be submitted for approval by the authority Detail plan to be submitted for approval by the authority Detail plan to be submitted for approval by the authority Detail plan to be submitted for approval by the authority Detail plan to be submitted for approval by the authority FINANCIAL HIGHLIGHTS Unit 2007 2008 2009E Revenue Bil VND 987 1,492 2,189 Gross profit Bil VND 85 156 175 Pretax profit Bil VND 27 61 87.89 Net profit Bil VND 23.5 54.1 78.3 Revenue Breakdown 2007 & 2008 2008, 6% 2008, 8% 2007, 4% 2007, 7% 2007, 8% 2008, 14% Total asset Bil VND 620 812 1,029 EPS VND 2,493 3,100 3,079 Dividend per share VND 1,200 1,500 1,500 2007, 81% 2008, 72% ROA % 3.8 6.7 7.6 Debt/Equity % 3.4 1.7 0.88 Feedstuffs Materials Trading Breeding Others 7
2009 2012 PLAN VND Mil Chattered capital 2009 2010 2011 2012 value Value +/- Value +/- Value +/- 254,467 254,467 0% 254,467 0% 254,467 0% Total assets 1,028,771 1,173,346 14.1% 1,497,366 28% 1,721,132 15% Revenue 2,189,672 2,581,715 18% 3,234,721 25% 3,886,014 20% Pre-tax profit 87,898 117,381 33.5% 127,288 8% 157,625 24% After-tax profit 78,346 99,773 27.3% 118,040 18% 135,443 15% EPS 3,079 3,921 27.3% 4,639 18% 5,323 15% ROA 7.62% 8,5% 11.5% 6,3% -7% 7.87% 0% Debt/Equity 0.88% 0.93% 5.7% 1.15% 24% 1.15% 0% QUE VO 3 INDUATRIAL ZONE 8
QUE VO 3 PLAN HUYEN QUANG 2 RESIDENT AREA 9
HO TOWN RESIDENT AREA SUMMARY High and sustainable growth of sector Dabaco has strong position in the sector Stable growth of revenue and profit. 10
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