Banking Academy of Vietnam

International School of Business

CASE STUDY ASSIGNMENT

Students: Pham Le My Duyen_CA11-036

Class: CA11A

Course: Market Securities

Hanoi, 6/12/2024

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 TABLE OF CONTENT

I. Overview of the general situation of the economy and stock market in Vietnam

1.1. Overview Vietnam’s Economy………………………………………….………………....………....3

1.2. General situation of Vietnam’s stock market…………………………………………….......3

1.3. Potential industries in the Vietnam’s Stock Market……………………..………………...4

II. Information about a selected company

2.1. Traphaco Joint Stock’s overview ………………....………………....………………....…………..5

2.2. Traphaco’s financial situation…………………………………………………………………....…..5

III. Specific investment advice for investors……………………………....………………..............6

IV. Real-time or virtual stock investment in the selected company stocks ..

………………....………………....………………....………………....………………....………………………………7

4.1. Introduction of the trading app and process to open trading account…………….7

4.1.1. Introduction…………………………………………………………….………………....

………………..7

4.1.2. Design and interface…………………………………………………...………………....…………….8

4.2. Describe the trading experience…………………………………………………………....……….8

4.3. Investment performance…………………………………………………………………....…………..8

4.4. Implications for yourself for future investment

practice……………….......................9

VI. Conclusion………………………………………………………………………………………………………..9

REFERENCES………………………………………………………………………………………………………….9

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I, Overview of the general situation of the economy
and stock market in Vietnam
I.1. Overview Vietnam’s Economy
Vietnam is recognized as one of the fastest-growing economies in Southeast Asia, boasting
an impressive average annual GDP growth rate over the past decade. In 2022 alone, the
country's GDP surged by approximately 8%, marking its highest economic growth in over a
decade. This robust expansion has been primarily fueled by several key sectors:

 Manufacturing: Vietnam has solidified its position as a significant global manufacturing

hub, attracting substantial foreign direct investment (FDI) from multinational corporations.
 Exports: With a diverse range of exported goods such as electronics, garments, and
seafood, the country has established itself as a reliable supplier in the global market. In
particular, electronics exports like phones and components contribute the highest value.
 Infrastructure: Continuous government investments in highways, ports, and power supply
systems have played an instrumental role in accelerating economic development.

Additionally, Vietnam’s demographic structure presents a young, dynamic workforce and an

expanding middle class, which creates strong domestic consumption. The government's
open policy for economic integration, through trade agreements like CPTPP and RCEP, has
also bolstered global trade relationships and market access.
However, despite these achievements, Vietnam faces considerable challenges:
 Heavy reliance on FDI: While FDI is a crucial growth driver, overdependence on foreign
investments exposes the economy to external risks.
 Global inflation: External pressures from rising global inflation and supply chain
disruptions have created uncertainties in economic stability.
 Upward pressure on interest rates could slow down domestic borrowing and investments.

1.2. General situation of Vietnam’s stock market

The Vietnamese stock market was established in 2000 and is currently among the
emerging markets. In 2023, Vietnam's stock market has over 1,700 listed companies
with a total market capitalization of approximately 5 trillion VND. Key indices such as
the VN-Index and HNX-Index play an important role in measuring market
performance.
Development of the stock market:
 Market liquidity has been steadily growing year by year.
 There has been an influx of foreign investors.
 New products such as derivatives and ETFs provide additional investment
options.
However, the market still faces issues such as dependence on blue-chip stocks, lack
of information transparency, and unstable investor sentiment.

1.3. Potential Industries in Vietnam’s Stock Market

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Vietnam's stock market is currently attracting attention to several potential industries
due to outstanding performance, supportive government policies, and future growth
opportunities:

1. Banking Sector:
 As the backbone of the financial system, major banks such as Vietcombank,
BIDV, and Techcombank play a significant role in the overall revenue growth
of the market. Flexible credit policies and the rapid digitization of financial
services have facilitated market share expansion.
2. Information Technology Sector:
 Technology companies like FPT are leading the digital transformation trend in
Vietnam. The high demand for technology platforms, especially following the
COVID-19 pandemic, has accelerated the growth rate of the IT sector.
3. Consumer Goods and Retail Sector:
 Vietnam has a young population and a rapidly growing middle class, leading to
high demand for consumer goods. Brands like Vinamilk, Masan, and Bách
Hóa Xanh are investment focal points due to their strong consumption power.
4. Renewable Energy Sector:
 Solar and wind power projects are thriving due to the urgent need for
environmental protection and international funding support.
5. Pharmaceutical Sector:
 With a growing focus on health post-pandemic, many pharmaceutical
companies like Traphaco are experiencing significant growth due to stable
purchasing power and market expansion.

Key Developments in the Stock Market:

These sectors not only help strengthen the economy but also create long-term investment
opportunities, especially in the context of a global recovery from economic fluctuations.
 Liquidity: The market has experienced robust growth in liquidity, evidenced by an
increasing average daily trading volume. This enhances market efficiency and
attractiveness.
 Foreign Investment: Foreign ownership limits have been gradually relaxed,
encouraging greater participation from international investors.
 Product Diversification: Recent offerings like derivative securities and exchange-
traded funds (ETFs) have broadened investment vehicles for participants.

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However, the market also grapples with certain issues:
 Dependence on Blue-Chip Stocks: A significant portion of trading activity revolves
around a few large-cap stocks, which creates market vulnerability to fluctuations in their
performance.
 Transparency: Despite improvements, issues such as opaque corporate governance
and inconsistent disclosures hinder investor confidence.
 Psychological Factors: Retail investors dominate Vietnam’s market, leading to
heightened volatility tied to speculative behaviors.

II. Information about a selected company:

Traphaco
2.1. Traphaco Joint Stock’s overview
Traphaco is one of Vietnam's leading pharmaceutical companies. Established in
1972, it has grown to become a well-recognized brand in the healthcare sector,
offering a diverse range of high-quality products focusing on natural-based remedies.
Traphaco combines traditional medicine knowledge with modern production
technologies, ensuring effectiveness and quality in its products.
Business Highlights:
 Core Products: Traphaco specializes in traditional medicines, functional foods,
and over-the-counter (OTC) drugs. Their flagship product, Hoat Huyet Duong
Nao, has become a household name in Vietnam.
 Market Position: Currently, Traphaco dominates the herbal medicine market in
Vietnam, with a strong brand reputation built on decades of consistent quality.
 Sustainability: Traphaco has implemented sustainable sourcing by establishing
plantations for medicinal plants. Their commitment to eco-friendly and responsible
production practices enhances their competitiveness.
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 Revenue Portfolio:
Traphaco's revenue primarily comes from three sources:
i. Traditional Herbal Medicines: Products derived from natural ingredients,
contributing the majority of their income.
ii. Western Medicines: A growing segment that complements their core
business.
iii. Functional Foods and Supplements: Increasingly popular among health-
conscious consumers.

2.2. Traphaco’s financial situation

The company's financial performance reflects stability and growth, supported by
consistent revenue from its flagship products and strong market presence.
Key Financial Metrics (Recent Year):
 Revenue Growth: Traphaco reported a year-on-year revenue increase of 15%,
showcasing a resilient business model.
 Profit Margin: The net profit margin remains solid at roughly 20%, highlighting
operational efficiency.
 Dividend Payout: The company maintains a steady dividend policy, appealing
to long-term investors.
Investment in R&D:
Traphaco consistently allocates resources to Research & Development (R&D),
focusing on innovative herbal medicines and advancing production technologies.
This investment reinforces their sustainable competitive edge and supports the
development of diversified product lines to meet changing consumer needs.
Challenges and Risks:
1. Raw Material Supply: Dependence on agricultural products makes the
company vulnerable to fluctuating supply and prices.
2. Competition: Intense competition from both local and international
pharmaceutical firms.
3. Regulatory Challenges: Adapting to changes in healthcare regulations and
compliance requirements markets domestically and internationally.
In conclusion, Traphaco demonstrates strong fundamentals with growth potential and
a prominent position in Vietnam's pharmaceutical sector. With ongoing investments
in R&D and sustainable practices, it continues to attract potential investors for long-
term returns.
III. Specific investment advice for investors
Investment Considerations for Traphaco
Investing in Traphaco offers several advantages and growth prospects, given the
company’s leadership in Vietnam's herbal pharmaceutical market and its emphasis
on sustainability and innovation. Below are detailed recommendations for potential
investors:
Benefits of Investing in Traphaco:
1. Market Leadership and Brand Strength:
 Traphaco is the dominant player in the herbal pharmaceutical sector in
Vietnam, which positions it as a defensible investment in a growing market. Its
strong brand recall and customer loyalty ensure consistent sales.
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 2. Sustainability and Strategic Sourcing:
 By establishing controlled plantations for medicinal plants, Traphaco
minimizes risks associated with raw material shortages and ensures
consistent quality for its products.
3. Growing Pharmaceutical Industry in Vietnam:
 Vietnam's pharmaceutical market has been growing consistently, driven by
rising income levels, urbanization, and an aging population. Traphaco is well
placed to benefit from these demographic and economic shifts.
Potential Risks:
1. Regulatory Constraints: The pharmaceutical industry is subject to strict
regulatory approvals, which might delay product launches or expansion plans.
2. Competitor Pressure: International and domestic competitors are ramping up
their stakes in both herbal and non-herbal medicines, increasing pricing and
market share risks.
3. Supply Chain Dependence: Agriculture-dependent supply chains face
uncertainties stemming from environmental factors, which could disrupt
manufacturing.
Investment Approach:
1. Long-term Holding: Investors looking for stable returns and growth potential
should consider Traphaco as a solid long-term holding given its dividend
policies and growth rate.
2. Portfolio Diversification: For investors focused on the healthcare sector,
Traphaco provides diversified exposure due to its emphasis on herbal-based
medicines and operating in an emerging economy.
3. Monitor Regulatory Changes: Stay updated on Vietnam's healthcare and
pharmaceutical regulations to anticipate potential impacts on the company’s
financials and operations.
By evaluating these aspects, prudent investors can effectively incorporate Traphaco
into their portfolio for long-term gains while managing associated risks.
IV. Real-time or virtual stock investment in the
selected company stocks
4.1. Introduction of the trading app and process to open trading account
4.1.1. Introduction
Investing in Traphaco stocks, like any other equity, necessitates the use of a secure and
reliable online trading platform. In Vietnam, there are numerous trading apps provided by
banks and securities brokerage firms, such as SSI, VNDirect, and Vietcombank Securities.
These apps allow investors to conveniently trade stocks, monitor market trends, and manage
portfolios in real time. They are targeted towards both beginners and experienced investors,
offering a blend of simplicity and advanced features.

4.1.2. Design and interface

Contemporary trading apps are known for their user-friendly designs and intuitive interfaces.
Typically, these platforms include:
 Account Dashboard: Displays a clear overview of the portfolio, including asset
allocation, current stock performance, and account balance.
 Stock Screeners: Enables users to search and filter stocks based on specific sectors
or metrics, such as P/E ratio or dividend yield.

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  Trading Functions: Support for buy/sell orders with real-time updates on stock
prices.
 Technical Tools: Charting tools with indicators like moving averages and RSI to help
users analyze stock performance.
 Security Features: Two-factor authentication (2FA) and end-to-end encryption to
ensure safe transactions for users.
These apps are designed to ensure smooth trading experiences while maintaining high
security standards.

4.2. Describe the trading experience

Trading stocks of Traphaco through virtual or real-time investment platforms offers both
excitement and learning opportunities. Here's a step-by-step description of the process:
1. Account Opening and Funding:
 First, an account must be opened with a licensed brokerage. Necessary documents
like identification and bank information are submitted electronically.
 Once the account is approved, funds can be added for stock purchases.
2. Research and Analysis:
 Before making trades, investors often use features such as financial reports,
company news, and market analytics available on the app to evaluate the stock.
3. Placing an Order:
 Using the trading app, the investor selects the stock (e.g., TRA for Traphaco) and
places a buy order. They specify the quantity, price range, and order type (e.g.,
market order or limit order).
4. Monitoring Performance:
 After executing the trade, real-time data on price movements allows constant tracking
of the stock's value.
5. Learning Through Practice:
 For those using virtual or simulated platforms, the process replicates real trading
without financial risk. This is an excellent way for beginners to gain confidence and
build trading strategies.

4.3. Investment performance

In the context of Traphaco, investors often analyze the stock's historical performance to
project potential returns. Over the past five years, Traphaco’s stock has shown relatively
stable growth due to its consistent revenue stream and reputable market position.
 Historical Growth:
 TRA’s stock price has experienced a compound annual growth rate of approximately
10% over the last five years.
 Dividend Yields:
 Traphaco is known for regularly offering attractive dividends, making it appealing to
risk-averse investors seeking steady returns.
 Market Trends:
 With increasing consumer awareness of health and wellness, pharmaceutical stocks
in Vietnam, including TRA, are likely to see a positive growth trajectory.
While past performance does not guarantee future success, Traphaco’s focus on innovation,
sustainability, and R&D investment continues to augment its appeal among investors.

4.4. Implications for yourself for future investment

practice
Stock investments, whether real-time or virtual, offer valuable lessons for investors:
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 1. Learning from Risks:
 Volatility in stock prices highlights the importance of risk management. Diversifying
across industries or including bonds in the portfolio can mitigate such risks.
2. Understanding Market Dynamics:
 Experiences with Traphaco stocks illustrate how fundamental analysis, such as
evaluating financial statements and growth strategies, leads to informed decisions.
3. Long-term Strategy:
 Observing TRA’s dividend policy and stable growth may encourage the adoption of
long-term investment approaches, focusing on value stocks.
4. Importance of Technology:
 The efficiency and tools provided by trading apps underscore the advantage of
leveraging technology for market analysis and portfolio management.
These takeaways not only improve future investment strategies but also cultivate a
disciplined and resilient mindset toward market uncertainties.

VI. Conclusion

The economic and stock market landscape in Vietnam showcases robust potential as the
country continues to experience impressive growth rates, driven by manufacturing, exports,
and investments in infrastructure. Additionally, with a developing financial system, Vietnam's
stock market offers lucrative opportunities, especially in promising sectors like
pharmaceuticals, technology, and renewable energy. However, challenges like reliance on
foreign investments and market volatility must be addressed to move towards sustainability.
Traphaco, as a chosen company, exemplifies a reliable investment option given its strong
foothold in the herbal pharmaceutical industry, sustainable practices, and consistent financial
performance. Despite risks such as supply chain dependencies and regulatory challenges,
the growth trajectory signals it as a viable choice for both short-term and long-term
investment plans. Real-world or virtual investment in Traphaco stocks using efficient trading
apps further underscores the importance of leveraging technology for financial management,
offering invaluable experiential learning for future investment strategies

Reference

1. General Statistics Office of Vietnam (GSO). (2023). Annual reports 2022-2023.

Retrieved from [General Statistics Office of Vietnam](https://www.gso.gov.vn)
2. Bloomberg. (2023). Vietnam economy and stock market trends. Retrieved from
[Bloomberg Market Data](https://www.bloomberg.com)
3. Traphaco Joint Stock Company. (2023). Financial statements and annual reports.
Retrieved from [Traphaco Official Website](https://www.traphaco.com.vn/)
4. Ho Chi Minh City Stock Exchange (HOSE). Publications and statistics. Retrieved from
[HSX](https://www.hsx.vn)
5. SSI Securities and VNDirect. (2023). Investment insights and market analysis.
Retrieved from [SSI Securities](https://www.ssi.com.vn) and
[VNDirect](https://www.vndirect.com.vn)
6. Statista. (2023). Pharmaceutical and economic growth projections. Retrieved from
[Statista](https://www.statista.com)