FINANCIAL

ANALYSIS
TECHCOMBANK
THE PERIOD OF 2021-2023

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 INSTRUCTOR: DR. TRAN TUAN VIET

Name: Nguyen Thi Duyen

Class: MKT1907
Course: FIN202 – FALL 2024

Table of content

I. INTRODUCTION
1. Company Name
2. Industry
3. Company History and Background
4. Market Information

II. FINANCIAL STATEMENT COLLECTION

1. Balance sheet
2. Income statement
3. Statement of Cashflow
4. Ratios
III. FINANCIAL STATEMENT ANALYSIS
IV. CONCLUSION
V. REFERENCE

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I. Introduction

1. Company Name:
Techcombank (Vietnam Technological and Commercial Joint Stock Bank)

2. Industry:
Banking and Financial Services

3. Company History and Background:

Techcombank, headquartered in Hanoi, was established in 1993 and became one of the first
private banks in Vietnam after the country began its economic reforms in the late 1980s.
Initially, Techcombank focused on providing commercial banking services to individuals and
businesses, aiming to support the growing private sector in the transitional economy.

In the late 1990s and early 2000s, Techcombank expanded its service offerings, introducing a
range of banking products such as loans, deposits and foreign exchange services. Techcombank
also began investing in technology with the desire to provide customers with the best quality
service and thereby help the bank stand out in the competitive market.

In 2007, Techcombank became a public company, listed on the Ho Chi Minh City Stock
Exchange (HOSE) under the stock code TCB. This move has further enhanced the bank’s
reputation in the financial sector.

Techcombank has always pursued a strategy of focusing on customer-centric services and

technological innovation. With a focus on digital banking, the bank has developed a robust
online banking platform and mobile applications to meet the ever-changing needs of customers.
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 To date, Techcombank is considered one of the leading commercial banks in Vietnam, known
for its financial stability and innovative products. The bank continues to play an important role
in the Vietnamese banking industry, contributing to the country’s economic development
through a variety of financial services

4. Market Information:
 Stock Symbol: TCB (HOSE - Hồ Chí Minh Stock Exchange)
 Current Stock Price:

According to the Ho Chi Minh Stock Exchange (HOSE), the stock price of Vietnam
Technological and Commercial Joint Stock Bank (Techcombank) is 24.55

Previous Close: 24.65

Ceiling price: 26.35

Floor price: 22.95

Total Outstanding Shares: Approximately 18,247,800

 Market Capitalization: Current Stock Price×Total Outstanding Shares

Market Capitalization = 24.55 x 18,247,800 = 447,115,290

*Unit: Price (thousand VND) | Value (billion VND) | Volume (shares)

 Overview

- Liquidity: From this price list, it can be seen that Techcombank's shares have good liquidity,
with a not-too-large price range, which could be an attractive point for investors.

- Prospects: Techcombank's current share price is close to the floor price, this is a buying
opportunity if investors feel confident in the recovery of the stock.

- Risks: However, the decrease in share price may also reflect concerns about the bank's
financial performance shortly, so investors should monitor financial indicators and stock news
related to Techcombank before making an investment decision.

 Comment

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 Techcombank's current shares show relative stability with a potential for future growth.
However, investors should carefully monitor factors that may affect the share price as well as
the bank's financial situation shortly before making an investment decision.

II. Financial Statement Collection:

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1. Balance sheet

2. Income statement

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3. Statement of Cashflow

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 Stacked Bar Chart of Income and Expenses (2021-2023)
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
40,000,000
30,000,000
20,000,000
10,000,000
0
2021 2022 2023
Net interest Income Interest Expenses
Net Operating Income before Provisioms

Figure 1: Stacked Bar Chart of Income and Expenses (2021-2023)

4. Ratios

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III. Financial statement analysis
1. Liquidity Ratio

 Current Ratio: 1.055 in 2023, indicating that Techcombank can meet its short-term debts but
not at a very high rate. This ratio is only slightly higher, meaning that the company can barely
pay its short-term debts. This could indicate potential solvency risks, especially if the company
is experiencing cash flow difficulties.

2. Efficiency ratio

 Total asset turnover: 0.033 in 2023, down from previous years (0.043 in 2022 and 0.047 in
2021). Thus, this ratio shows that the company cannot use its assets effectively to generate
revenue. This is a sign that the company's operating efficiency is decreasing and needs to be

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 improved to increase productivity, otherwise it will affect the company's revenue in the long
run.

 Fixed asset turnover0.299 in 2023, down sharply from 0.62 in 2021. This is a bad sign for the
company's fixed asset utilization results. The sharp decline in the search for fixed assets such as
machinery and factories is not creating value commensurate with their value.

3. Leverage Ratio

 Debt to Equity Ratio: 5.45 in 2023, increasing from 5.16 in 2022 and 5.11 in 2021
respectively. This ratio indicates that the company is increasingly relying on debt to support its
operations. Increasing debt levels may create more financial constraints as the company is
likely to face any economic or financial risks, especially in a high interest rate environment and
cash flow constraints.

 Total Debt Ratio: 84.51% in 2023, up slightly from 83.77% in 2022. An increase in debt ratio
is defined as a significant proportion of a company's assets being financed by debt, which
increases the risk of the company's inability to meet its obligations over time

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 Debt to Equity Ratio Distribution (2021-2023)

Figure 2:
Debt to
Ratio 2023 2022 2021
Distribution of Techcombank (2021-2023)

4. Profitability ratio

 Gross profit margin: 66.92% in 2023, down from 67.24% in 2022 and 69.86% in 2021.
Although the ratio remains high, the slight decrease in profit margin indicates that the
company's ability to manage production costs may not be effective, or the company is facing
increasing cost pressure. The decrease in gross profit margin may be the result of increased
production costs, such as raw material costs or operating costs. If the company cannot control
these costs well, the gross profit margin may continue to decrease, directly affecting profits.

 Net profit margin: 65.69% in 2023, down slightly from 67.47% in 2022 and 69% in 2021. The
gradual decline in net profit margin is a warning about the company's ability to maintain future
profits, especially in the context of possible rising interest expenses, leading to a higher debt
ratio. If this trend continues, the company will find it difficult to maintain current profit levels.

 Return on assets (ROA): 2.14% in 2023, down from 2.92% in 2022 and 3.24% in 2021. The
decline in ROA reflects that the use of assets to generate profits is not being optimized. If the

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 work does not improve the efficiency of asset use, ROA may continue to decline, thus
increasing the risk level of the company's assets.

 Return on equity (ROE): 13.82% in 2023, down sharply from 18.02% in 2022 and 19.79% in
2021. A decline in ROE indicates a significant decline in the profit generated from equity. This
could result in lower earnings or the company issuing additional shares without generating
corresponding profits.

Forecast and Advisory Recommendations

1. Future Outlook

 Revenue Growth: Revenue in 2023 is expected to decline compared to 2022. The decline in
growth suggests that the company may be facing challenges in expanding revenue, such as
market pressures, increased competition, or saturation of existing products/services. It is
forecasted that the company will continue to struggle to improve this growth rate, resulting in
increased debt and financing costs.

 Profitability: Profit margins are declining and return on assets (ROA) and equity (ROE) are
both declining, suggesting that profitability will be under pressure in the coming years unless
asset and capital management efficiency is improved.

2. Investment Recommendation:

 Risk
A high debt ratio increases the risk of default, indicating that the company is using a large
portion of its funding from debt, which can lead to pressure on interest and principal payments.
Without sufficient cash flow to cover these payments, the company may have difficulty in
servicing these debts. In addition, in the context of rising interest rates, borrowing costs will
increase, which can reduce the company's profitability. This creates greater risks, especially
when financial markets become unstable or during economic downturns.

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 Decreased operating efficiency can reduce profitability. A decrease in operating efficiency can
reflect that the company is not optimizing the use of assets and resources to generate revenue.
This can lead to a decrease in profit margins, putting pressure on net income. In addition, if the
company fails to improve its operating efficiency, its ability to maintain revenue and growth
will be affected, which could lead to a decline in stock value and reduce investor confidence in
the company's future.
 Careful Investment Strategy
Investors need to closely monitor financial indicators related to debt, liquidity, and operating
efficiency while carefully considering risks. Evaluating the debt-to-equity ratio, current ratio,
and other indicators will help investors better understand the financial capacity of the company
at present as well as in the future.

Investors should conduct industry analysis comparing with other companies in the same
industry to evaluate the company's performance. This helps investors have a more
comprehensive view of the company's competitive position in the market.
It is extremely necessary to consider and set investment goals in terms of expected returns and
compare them with other investments. If the return is not attractive enough, we can consider
other investment opportunities with lower risks. Also closely monitor fluctuations in interest
rates and economic indicators that could affect the company's debt servicing ability and
profitability.

IV. Conclusion
Investors should exercise caution when deciding to invest in this company, especially when the
company is facing risks of debt, cash flow, and declining performance. Improving financial
management and performance is essential to ensure the company’s future sustainability.
Without appropriate and effective reforms, profitability may not be as expected, and financial
risks will need to be monitored regularly.

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V. Reference
Techcombank. About Techcombank: Techcombank is one of the largest joint-stock commercial
banks in Vietnam and one of the leading banking institutions in Asia, from:

https://www.techcombankjobs.com/content/Who-We-Are/?locale=en_GB#:~:text=ABOUT
%20TECHCOMBANK,leading%20banking%20institutions%20in%20Asia.

LaoDong. P.V. (2018).Techcombank officially listed more than 1.16 billion TCB shares on
HOSE. Retrieved June 04, 2018 from:

https://laodong.vn/tien-te-dau-tu/techcombank-chinh-thuc-niem-yet-hon-116-ty-co-phieu-tcb-
tren-hose-610871.ldo

Cafe.vn. Vietnam Technological and Commercial Joint Stock Bank (Techcombank), Financial
Report, from:

https://s.cafef.vn/hose/tcb-ngan-hang-tmcp-ky-thuong-viet-nam-techcombank.chn

Techcombank. VAS financial reports, from:

https://techcombank.com/nha-dau-tu/thong-tin-tai-chinh/bao-cao-tai-chinh-vas

Vietstock. Vietnam Technological and Commercial Joint Stock Bank (HOSE: TCB), from:

https://finance.vietstock.vn/tcb/financials.htm?
languageid=2&tab=KQKD&fbclid=IwY2xjawF7b2lleHRuA2FlbQIxMAABHeSfWBJcUfpp2S
fi59eLPC_r7qg5oxs-fzXA2I7lTPQjJd3zjDExuC6T7Q_aem_Z1rNTYn2xm-Kq3O6knAbxw

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