PROSPECTUS

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PROSPECTUS
THIS ENGLISH VERSION OF THE PROSPECTUS IS FOR INFORMATIONAL PURPOSES
ONLY, NOT AN OFFICIAL TRANSLATION. THE ONLY OFFICIAL VERSION OF THE
PROSPECTUS IN VIETNAMESE THAT HAS BEEN APPROVED BY THE HO CHI MINH STOCK
EXCHANGE CAN BE FOUND ON THE WEBSITE OF THE HO CHI MINH STOCK EXCHANGE
(www.hsx.vn) AND CENTURY SYNTHETIC FIBER CORPORATION (www.theky.vn)
PROSPECTUS
CENTURY SYNTHETIC FIBER CORPORATION
(Business Registration Certificate No. 0302018927, issued for the first time by Ho Chi
Minh City Department of Planning and Investment on 11/04/2005 and amendment 13rd
on 14/01/2015)
SHARE LISTING
ON HO CHI MINH STOCK EXCHANGE
(Decision No.410/QĐ-SGDHCM dated 10/09/2015 by
The Ho Chi Minh Stock exchange)
This prospectus and attachments will be provided at:
1. CENTURY SYNTHETIC FIBER CORPORATION
Headquarter: B1-1 Northwest Cu Chi Industrial Zone, Cu Chi district, HCMC
2. DONG A SECURITES COMPANY LIMITED
Headquarter: Floor 2&3,building 468 Nguyen Thi Minh Khai St, Ward 2, District 3,HCMC
Ha Noi Branch: 181 Nguyen Luong Bang Street, Dong Da District, Ha Noi
Sai Gon Branch: 60-70 Nguyen Cong Tru Street, Nguyen Thai Binh Ward, District 1, HCMC
Reponsibility of Information Disclosure:
Full name: Ms. Nguyen Phuong Chi
Position: Strategic Development Director
Tel. : (08) 37907565
CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
CENTURY SYNTHETIC FIBER CORPORATION
(Business Registration Certificate number 0302018927, issued for the first time by Ho Chi Minh
City Department of Planning and Investment on 11/04/2005 and amendment 13rd on 14/01/2015)
SHARE LISTING
ON HO CHI MINH STOCK EXCHANGE
Share name
: Century Synthetic Fiber Corporation
Type of share
: Ordinary share
Sharesymbol
: STK
Par value per share
: VND 10.000
Number of shares
: 42.305.336 shares
Value of shares (by par value): VND 423.053.360.000 (Four hundred twenty three
billion fifty three million three hundred and sixty thousand Vietnam dong)
THE AUDIT FIRM:
 ERNST & YOUNG VIETNAM COMPANY LIMITED
Address: 2 Hai Trieu Street, Ben Nghe Ward, District 1, Ho Chi Minh City
Tel.: (08) 3824 5252
Fax: (08) 3824 5250
Website: www.ey.com
THE ADVISOR:
 DONG A SERCURITIES COMPANY LIMITED
Headquarter
Address
: Floor 2&3, Building 468 Nguyen Thi Minh Khai Street, Ward 2,
District 3, Ho Chi Minh City.
Tel.
: (08) 38 336 333
Fax : (08) 38 333 891
Website
: www.dag.vn
Email : [email protected]
Ha Noi Branch
Địa chỉ
: 181 Nguyen Luong Bang Street, Dong Da District, Ha Noi.
Tel.
: (04) 3944 5175
Fax : (04) 3944 5178
Sai Gon Branch
Address
: 60 – 70 Nguyen Cong Tru Street, Nguyen Thai Binh Ward, District 1,
Ho Chi Minh City.
Tel.
: (08) 3821 8666
Fax : (08) 3914 4372
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
INDEX

INDEX.................................................................................................................................. 3
TABLE OF CONTENTS ................................................................................................... 6
CHARTS .............................................................................................................................. 6
TABLES ............................................................................................................................... 6
I. Risk factors ................................................................... Error! Bookmark not defined.
1.
2.
3.
4.
II.
Economic risks ......................................................................................................................8
Legal risks ...........................................................................................................................10
Specific risks .......................................................................................................................10
Other risks ...........................................................................................................................13
PERSONS RESPONSIBLE FOR THE CONTENTS OF THE PROSPECTUS 14
1. Listing Company .................................................................................................................14
2. The Advisor .........................................................................................................................14
III. DEFINITIONS AND ABBREVIATIONS ............................................................. 15
IV. STATUS AND CHARACTERISTICS OF THE LISTING COMPANY ........... 15
1. Summary of formation and development milestones ..........................................................15
1.1
About the Company .....................................................................................................15
1.2
History of formation and development ........................................................................16
1.3
Business activities and products / services offered by the Company ..........................18
1.4
Introduction to the Company's capital raising progress .............................................19
2. Structure of the Company ...................................................................................................20
3. The management structure of the Company .......................................................................21
3.1
General Meeting of Shareholders (GM) .....................................................................21
3.2
Board of Directors (BOD)...........................................................................................22
3.3
Supervisory Committee (SC) .......................................................................................22
3.4
Board of Management .................................................................................................22
3.5
Departments and divisions within the Company .........................................................23
3.6
Labor unions ...............................................................................................................28
4. List of shareholders holding over 5% of Chartered capital, list of founding shareholders
and shareholder structure ....................................................................................................29
4.1
List of shareholders holding over 5% of the company’s Chartered capital ...............29
4.2
List of founding shareholders: ....................................................................................29
4.3
Shareholder structure ..................................................................................................30
5. List of parent companies and subsidiaries of the listing company, the companies that
the listing company is holding controlling or dominant stake, the companies holding
control or dominant stake of the listing company ..........................................................30
5.1
List of parent companies and subsidiaries of STK ......................................................30
5.2
the companies that STK is holding controlling or dominant stake, the companies
holding control or dominant stake of STK ..............................................................................30
5.3
List of associates or join ventures of STK ...................................................................30
6. Business activities ...............................................................................................................31
6.1
Business model ............................................................................................................31
6.2
Product Quantity / Service value over years ...............................................................33
6.3
Plant capacity and sales volume through the years ....................................................38
6.4
Raw materials ..............................................................................................................40
6.5
Production cost ...........................................................................................................43
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
6.6
Production processes of main products ......................................................................45
6.7
Technology level ..........................................................................................................46
6.8
Research and development of new products ...............................................................48
6.9
Quality control ............................................................................................................48
6.10 Marketing activities .....................................................................................................52
6.11 Customer network of STK ...........................................................................................53
6.12 Customer services .......................................................................................................54
6.13 Labor force ..................................................................................................................55
6.14 Trademarks, registered patents and copyrights .........................................................56
6.15 Unfinished or signed contracts ...................................................................................56
7. Income Statement in 2013, 2014 and 6M2015 ...................................................................59
7.1
Summary of some items on income statements of the Company in 2013, 2014 and
6M2015....................................................................................................................................59
7.2
Factors affecting the Business and Production activities of the Company:................60
8. Position of the Company compared with other firms in the same industry ........................62
8.1
Position of the Company in the industry .....................................................................62
8.2
The industry’s development prospect ..........................................................................65
8.3
Evaluating the compatibility of Company's development strategy with industry’s,
state’s policy and the general trend in the world ....................................................................72
9. Employee policy .................................................................................................................73
9.1
STK’s human resource ................................................................................................73
9.2
Working regulation and remuneration, allowances policies for employee.................73
10. Dividend policy ...................................................................................................................74
11. Historical financials activities............................................................................................75
11.1 Basic of preparation of historical financial statements ..............................................75
11.2 Financial ratios ...........................................................................................................81
12. Board of Directors. Board of Management, Supervisory Committee and Chief Accountant
.............................................................................................................................................82
12.1 Board of Directors ......................................................................................................83
12.2 Supervisory Commitee .................................................................................................90
12.3 Board of Directors ......................................................................................................94
12.4 Chief Accountant .........................................................................................................94
13. Assets ..................................................................................................................................95
14. Development orientation, profit and dividend in the next year. ..........................................96
14.1 Development Orientation ............................................................................................96
14.2 Business Plan in the period of 2015-2016: .................................................................97
14.3 Purusant to achieve the earning and dividend plan in 2015 -2016 ............................98
15. Advisory‟s opinions on profit and dividend plan ................................................................99
16. Information of listing organization about the commitment but not yet implemented.........99
17. Information of litigation involving the Company that may affect the price of the listing
shares ..................................................................................................................................99
V.
LISTING SHARES .................................................................................................. 99
1.
2.
3.
4.
Type of shares .....................................................................................................................99
Par value ..............................................................................................................................99
Total number of listing shares .............................................................................................99
The number of shares is restricted to transfer according to the regulations of law or of
listing organization ..............................................................................................................99
5. Price valuation method ......................................................................................................101
5.1
Selection criteria of comparing companies .............................................................101
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
5.2
The calculation formula of method P/E ..................................................................101
5.3
The calculation formula of method P/BV ...............................................................101
5.4
Determine (P/BV)average và (P/E) average: ...................................................................102
5.5
Determine price of shares ........................................................................................102
5.6
Summary of results ...................................................................................................102
6. Limitation on number of shares held by foreigners ..........................................................103
7. Related taxes: ....................................................................................................................104
VI. THE PARTNERS WITH REGARD TO LISTING ............................................ 105
1. Advising Company: ...........................................................................................................105
2. Auditing Company: ...........................................................................................................105
VII. APPENDIX ............................................................................................................. 106
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
TABLE OF CONTENTS
CHARTS
Chart 1: Inflation Index period 2013 - 2015 ................................... Error! Bookmark not defined.
Chart 2: Selling price and chip’s price ...........................................................................................11
Chart 3: Net Revenue and average selling price (2008 – 2014) .....................................................35
Chart 4 : Breakdown revenue by product .......................................................................................36
Chart 5 : Gross profit and gross margin(2008 – 2014) ..................................................................37
Chart 6 : Designed capacity and machine using rate of the Company from 2008 to 2014 ............39
Chart 7: Sale volume from 2008-2014 ............................................................................................39
Chart 8 : Sale volume by export and domestic market from 2010 - 2014 .......................................40
Chart 9 : The violation of raw materials PTA and MEG from 9/2014 to 3/2015 ...........................42
Chart 10 : The fluctuation of fiber selling price and PET chip purchased price ...........................42
Chart 11 : The cost factors in 2013, 2014 and the first 6 months of 2015......................................44
Chart 12: Top 10 – 20 clients in Total Revenue .............................................................................53
Chart 13: Market share of STK .......................................................................................................63
Chart 14: Avarage wage of some countries ....................................................................................67
Chart 15 : Forecast of Vietnam T&G turnover (2014-2020)..........................................................69
TABLES
Bảng 1: Capital raising progress of the Company .........................................................................19
Table 2 : List of shareholders holding over 5% share capital of the Company .............................29
Table 3: The company’s list of founding shareholders ...................................................................29
Table 4: The Company’s shareholder structure .............................................................................30
Table 5: The percentage of each operating revenue to total revenue .............................................35
Table 7: Actual days of machine using from 2008 to 2014 .............................................................38
Table 9 : COGS, selling expenses and general administration expenses of the Company from 2013
– 6M2015.........................................................................................................................................43
Bảng 10 : Some operation indicators of some companies of the industry ......................................44
Table 11 : Some typical equipment of the Company .......................................................................47
Picture 12: Some unfinished or signed large contracts ..................................................................56
Table 13: Some income statement items of the Company in 2013, 2014 and 6M2015 ...................59
Table 14 : The direct Company’s domestic competitors .................................................................63
Table 15 : Criteria of companies in fiber, weave and clothing industry in 2014 ...........................64
Table 16: The world textile and garment revenue ..........................................................................66
Table 17: Vietnam and China market share in some main markets ...............................................67
Table 18 : The World Top Ten T&G exporters ...............................................................................68
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPECTUS
Table 19 : Vietnam T&G industry’s market share and proportion of import in the US and EU-27
.........................................................................................................................................................69
Table 20 : Number of new investment projects in Vietnam T&G industry .....................................70
Table 21: Import rate of fiber in some countries ............................................................................72
Table 22 : Employee structure by the Company qualifications ......................................................73
Bảng 23 : History of dividend payments from 2009 to 2014 and dividend plan in 2015 (expected)
.........................................................................................................................................................75
Table 24: Status of authorized capital and operational capital of the Company ...........................76
Table 25: Average income of the Company’s employees ................................................................77
Table 26: Labor average income of certain Vietnam T&G companies on 2014 ............................77
Bảng 27: Balance of Company’s funds over the years ...................................................................78
Table 28 : The Company's receivable .............................................................................................78
Table 29 : The Company's payables................................................................................................79
Bảng 30 : The Company’s Total outstanding debts ........................................................................79
Bảng 31 : The Company’s main financial ratios in FY2013A, FY2014A .......................................81
Table 32 : Members of BOD, BOM, SC and Chief Accountant of the Company ............................82
Table 33 : Tangible and Intangible fixed assets of the Company at 30/06/2015 ............................95
Table 34 : List of real estate the Company is managing and using ................................................95
Table 35 : Disbursement progress Trang Bang Phase 3 project ....................................................96
Table 36 : Investment Projects ........................................................................................................96
Table 37: Business plan in period of 2015-2016 ............................................................................97
Table 38: The total number of shares is restricted to transfer......................................................100
PICTURES
Picture 1: The organizational model of the STK.............................................................................21
Picture 2 : Company’s business model ...........................................................................................31
Picture 3: Activity diagram of the Company ...................................................................................32
Picture 6: Pictures on some machinery and equipments of the Company ......................................47
Picture 9: The value chain in the textile and garment industry ......................................................65
Picture 10 : Major textile exporting – importing countries on the world .......................................66
Picture 11 : The textile and garment shift from China to Southeast Asia .......................................67
Picture 12 : Bottleneck in Vietnam T&G industry ..........................................................................68
Picture 13 : Vietnam's T&G export value grows gradually with the increase of the free trade
agreements ......................................................................................................................................69
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
I.
RISK FACTORS
1.
Economic risks
PROSPESTUS
Economic risks are changes in the economy along with the change of fiscal and
monetary policies that directly affect the operation of the company.
 Economic growth rate risk
In recent years, the global financial crisis and economic downturn had a strong
impact on the economy of the world and Vietnam‟s. However, according to forecasts of
the World Bank, the global economy is recovering with GDP growth expected to rise
from 2,6% (2014) to 2,8% (2015), 3,3% (2016 ) and 3,2% (2017)1. With that trend, in
2014 Vietnam‟s economy has become brighter and gradually more stable than the
previous year. The macroeconomic indicators shown that the momentum of growth is
sustaining strongly, the recovery becomes clearer and more stable. In addition, financial
market also shows positive changes; government budget is improved. Specifically, data
from the General Statistics Office of Vietnam showed that in 2014, all the macroeconomic
indicators have increased significantly, the Gross Domestic Product (GDP) growth rate
was estimated at 5,98% in 2014 compared to 2013, while the first quarter grew 5,06%, the
second quarter grew 5,34%, the third quarter was 6,07% and the fourth quarter rose
6,96%. The GDP growth rate in the year of 2014 is higher than the growth of 2012 and
2013, which respectively are 5,25% and 5,42%.
In the first half of 2015, Vietnam‟s economy continues to have good growth signs.
According to statistics of the National Financial Supervisory Commission, the GDP
growth rate of the first 6 months of 2015 was estimated at 6,1%, which is the highest
compared to the same periods of the 5 most recent years. Based on the recovery
momentum, the Commission forecasts the GDP growth rate in the first 9 months of 2015
would be 6,3% and the year 2015 could potentially reach 6,5%. However, difficulties in
production and business activities have not been fully addressed, the internal weaknesses
of the economy have not been completely overcome, therefore the economic risks will
remain as significant factors to all of the enterprises in general and Century Synthetic
Fiber Corporation in particular.
Even so, economic risks still have less influence on the textile and garment
industry than other industries. Retail sales in the global garments market maintained an
average growth rate of about 3,8% per year over the period 2010 to 2014 and achieved
sales of USD 1.317 billion in 20142. During the period 2014 – 2019, Marketresearch.com
1
Source: www.worldbank.org
2
Source: http://www.marketresearch.com/MarketLine-v3883/Global-Apparel-Retail-9042467/
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
expects retail sales in the global garments market will continue to grow rate of 4,6% per
year and reach USD 1.651 billion in sales in 2019. The growing demand for apparel
products in the up coming years will be due to population growth, expectation of the
recovery in global economic, the increase in per capita income and purchasing power in
developing countries.
For filament polyester industry, the average growth rate is 8,4% per year during
2010 – 20143 period. According to the Japan Chemical Fiber Association, polyester fiber
demand is expected to maintain the growth rate of 4,1% per year from 2013 to 2030.
 Interest rate risk
When a company raises external capital to use for production and business
activities, it will face risks when market interest rates rise or fall.
In 2014, the interest rate is dropped 1,5 – 2% per year and maintaining a stable
trend compared to the year of 2013. Specifically, the prime rate is remained at 9% per
year, the re-discount interest rate is 4,5% per year and the re-financing interest rate is
6.5% per year. The deposit interest rate generally fluctuate between 5% to 5,5% per year
with maturity from 1 to 6 months, maturity from 6 to 12 months has the interest rate is
5,7% to 6,8% per year and from 6,8% to 7,5% per year for maturity over 12 months. In
addition, the lending rate for short – term maturity is 7% to 9% per year and from 9,5% to
11% per year for medium and long term maturity. In general, the interest rate trend is
downward and stable throughout 2014 compared to the end of 2013 which has contributed
positively supporting for production and business activities to all of the enterprises,
creating favorable conditions to access to cheap loans, expanding their investments
efficiently. The Century Synthetic Fiber Corporation has obviously gained benefit from
that.
 Inflation risk
During 2014, Vietnam‟s inflation remained low
while oil prices and goods are under downward
pressure. According to the General Statistics
Office, inflation in 2014 reached its lowest level
in the last 10 years. The Consumer Price Index
(CPI) is 1%, core inflation is 2,37% in the first
half of 2015 compared to the same period last
year. Overall, both inflation and core inflation has
been almost unchanged for the last 4 months. The
National Financial Supervisory Commission
3
Source: The Fiber Year 2015
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
forecasts the core inflation in 2015 will be about 3% and inflation will be lower 3%. A
stable inflation has contributed to improving the actual living standards of people,
strengthening the purchasing power of the domestic currency, improving liquidity,
reducing deposit interest rate and lending rate, increasing investment attractiveness in
Vietnam… As a result, the business environment becomes favorable, more attractive for
domestic firms.
2.
Legal risks
Like other companies operating in Vietnam, STK has also been influenced and
governed by the domestic legislation system. In addition, as a public company, STK is
also affected by the Enterprise Law and other legal documents on Securities and Stock
Market.
As Vietnam is still a developing country, many laws and bylaws at this stage are
still in the fine-tuned progress. The change in policy is somehow inevitable and more or
less causes a certain impact on the Company's business operations. However, legal risk
is a systemic risk, it requires each company to adjust and adapt accordingly to maximize
its positive sides, and limit its negative effects. STK already has an appropriate
mechanism to monitor, update and adjust to get the best adapting to the changes in the
regulatory environment in Vietnam.
3.
Specific risks
 Cost fluctuation of raw materials risk
With business activity is fiber production, price fluctuations in raw materials are a
particular risk to STK.
Polyester fibers are made from polyester resin pellets, a composition of the oil.
Therefore, a downturn in oil price in recent time has affected to raw materials costs and
product‟s price. However, the level of influence of the oil price depends on market‟s
supply and demand and company‟s position, negotiation capability in the market. The
company aims to maintain a certain margin between the selling price and the cost of raw
materials. To achieve this target, the company bases on a mechanism of buying raw
materials and selling goods, which is the price of goods is always determined based on the
inventory and goods to arrive. Besides, thanks to the high quality production of goods and
company‟s reputation in the market, when raw material prices fall, STK can still maintain
selling prices in spite of downturn in raw materials costs.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Chart 1: Selling price and chip’s price
Moreover, to minimize the risk of price fluctuations in raw materials, STK has
actively expanded the supplying sources of raw materials and not to depend too much on
any single supplier. Any main products has been purchased continuously with at least 3
suppliers. Besides, the company has registered member of a prestigious international site
to update market price regularly to make sure buying raw materials with reasonable
prices. This measure helps the Company to ensure the stability of raw material price in a
certain period of time, minimize the shortcomings in production and business when raw
material prices fluctuate widely.
 Exchange rate risk
The company is exposed to exchange rate risk due to the fair value of future cash
flows will fluctuate simultaneously with the changes in foreign exchange rates when the
loans, revenue and the company's costs using other currencies than Vietnam dong.
Thanks to the consistent operating solutions, the State Bank‟s synchronous
combination between exchange rate policy, interest rate and monetary policy
instruments, the exchange rate in 2014 has remained stable trend, the fluctuation range
has been narrower. On June 19th 2014, the State Bank announced adjusting the average
exchange rate of interbank between VND and USD. Consequently, the exchange rate of
the USD increased to VND 21,246, after a year holding rate of VND 21,036. As a
result in 2014, the exchange rate beetween VND and US dollar in general is relatively
stable and located entirely within the control of the State Bank. The fluctuation range
within VND 21.200 per USD to VND 21.300 per USD in 2014 is considered to be
relatively stable compared to other currency pairs in the region and around the world.
In the first 6 months of 2015, The State Bank has adjusted up two times with
total tuning is 2% of the averageinterbank rate from 21,246 VND/USD to 21,458
VND/USD on January 7th and up to 21,673 VND/USD on May 7th in order to maintain
the competitiveness of Vietnam‟s economy. China, Vietnam‟s large trade partner,
devaluate their Renminbi for 4.6% in August 2015 will cause adverse effect on
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Vietnam‟s economy. Therefore, on August 12th 2015, the State Bank of Vietnam (SBV)
decided to raise the exchange rate margin between the Vietnam dong and US dollar
from +/- 1% to +/- 2% and on August 19th 2015, the SBV adjusted the average exchange
rate of interbank between the Vietnam dong and US dollars from 21,673 VND/USD to
21,890 VND/USD, while exchange rate margin was adjusted from +/- 2% to +/- 3%.
Currently, production and business activities of the company is using multiple
foreign currencies. Raw materials are mainly imported from abroad with the proportion
accounting for 75%-80% in cost of goods sold. In addition, the company has long-term
loan worth USD 24 million investment to expand fiber production in Trang Bang branch
- Stage 3. However, the company has always maintained the proportion of export sales
(STK‟s productions export 70% of their capacity) to have enough foreign currency to
import raw materials, repayment of principal and interest of loan in USD. Therefore,
exchange rate losses are very low. When Vietnam dong devaluating, the company shall
primarily losses in unrealize exchange rate relating to the revaluation of foreign currency
loan at the end of the accounting period. Specifically, financial expenses include foreign
exchange losses and interest from 2013 to the first 6 months of 2015 have the proportion
ranged from 0.86% - 3.29% / net turnover sales.
 Labor supply risk
The free trade agreements like FTA, TPP bring many opportunities to develop
production and business activities in textile and garment industry, making Vietnamese
enterprises require more labor. However the southern enterprises in textile and garment
industry facing a situation of manpower‟s movement, making it harder to recruit high
quality labor. According to the Vietnam Textile and Apparel Association, total workforce
of textile and garment industry is currently about 2.5 million people but industry workers
are only accounting for 15%. Especially, the shortage of senior personnel with experience
working in an international environment, qualifications and highly discipline labor is a
challenge for STK. Therefore, the company has always focused on training labor,
improving remuneration policies and the qualitiy of working environment in order to
minimize the risk of labor shortages.
 Competitive risk
Competitive risk is when the company lose the competitiveness in market. In order
to maintain the competitiveness in the same sector, not only in domestic but also in
worldwide, the strategy of company is providing the best quality products with
competitive prices and good after – sales service. To do this, the company has invested in
modern machinery, training a skilled workforce and applying modern management
system to strictly control the quality and costs. In addition, to attract and retain
employees, besides competitive salaries, the company also has a program to issue
preferential shares which is restricted to staff and employees, training policies,
opportunities for advancement, and other welfare programs. For suppliers, to obtain
products with stable quality and competitive input prices, the company has maintained its
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
reputation as a reliable partner. In addition, prudent investment policy and controlling
financial situation closely can help company maintaining a healthy financial situation to
be able to overcome all of the market‟s waves. Thanks to that proper strategic direction,
the company has continously maintained a high growth rate during the past 15 years
despite of fierce competition in the domestic and international market.
In 2015, when Trans-Pacific Strategic Economic Partnership Agreement (TPP), Free
trade agreement with South Korea, the EU and the Customs Union Russia - Belarus Kazakhstan being negotiated and signed, growth opportunities for Vietnam‟s textile and
garment industry continue to expand. So, although many FDI enterprises have already had
investment activities in Vietnam's garment sector in all phases from spinning to knitting,
weaving, designing, and sewing, but with available competitive advantage along with
market expansion, increasing in demand for fiber while the fiber supply remains limited,
especially for long staple fibers with high quality that STK are focusing on production,
STK forecasts that It will have better growth prospects than Femalea thanks to the
advantages and preference from the Free Trade Agreement.
4.
Other risks
 Credit risk
The client does not implement its contractual obligations may cause financial loss to
the company. However, in order to minimize credit risk, the company requires almost all
of the customers paying cash on delivery and only granted trade credits to a small number
of traditional customer.
 Shares’s price fluctuation risk
When the company's shares are listed on the Ho Chi Minh Stock Exchange, the
shares‟s price will fluctuate not only depend on the internal operations but also affected
by the market fluctuation. In recent times, due to the negative impact from the domestic
economic and government‟s operating measures the macroeconomic to control inflation,
the stock market and the price of most shares was falling. However in exciting period, the
stock market has become undeniably a pretty good capital mobilization channel for
businesses. The share listing is also an inevitable trend to enhance value for shareholders
throughout increasing liquidity and enhancing governance practices thereby improving
the company‟s business performance.
 Other risks
Beside the above mentioned risks, there are other unforseen risks such as natural
disasters (drought, storm, flood, etc.), war or epidemics, etc. These risks are less likely to
happen, but when it does, the Company might be heavily affected. For prevention of such
risks, the company has purchased insurance for all risk assets and business interruption as
a precaution to the property‟s damage and commodities as well as a cost recovery and
profit when production and bussiness activities is interupted.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
For the new plant, the company always protect the machinery by buying an
insurance for inland shipping process from the port to operate the official production.
II.
PERSONS
RESPONSIBLE FOR THE CONTENTS OF THE
PROSPECTUS
1.
Listing Company
Mr. Dang Trieu Hoa
Title: Chairman & GENERAL DIRECTOR
Mr. Nguyen Tu Luc
Title: Chief of Supervisory Committee
Mr. Phan Nhu Bich
Title: Chief Accountant
We ensure that the information and data on business activity and financial position
in the past and the present of the Company in this Prospectus is accurate, and commit to
be responsible for the truthfulness and accuracy of the information and data provided.
2.
The Advisor
Ms. Truong Nguyen Thien Kim
Title: Deputy General Director
( According to the Authorization Decision No. 24/2014/QĐ-DAS of the General
Director of DongA Securities on 13/02/2014.)
This prospectus is part of the registration dossier to be listed on Ho Chi Minh City
Stock Exchange offered by DongA Securities on the basis of the consulting contract with
STK. We guarantee that the analysis, evaluation and choice of words in this Prospectus
has been made reasonably and prudently based on information and data provided by STK.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
III. DEFINITIONS AND ABBREVIATIONS






The listing company
The advisor
Report















DAS
AGM





Audit firm
Charter
DO
QA
QC
Company
Shares
BOD
EBIT
EAT
STK
Corp. finance
GD
SSC
VSD
Chartered capital
Century Synthetic Fiber Corporation
Dong A Securities Company Limited
Financial report
Supervisory Board of STK
Century Synthetic Fiber Corporation
A certificate issued by STK confirming the ownership of one or
a number of STK‟s shares
Dong A Securities Company Limited‟s abbreviation
STK‟s Annual General Meeting
Business Registration Certificate
Business activities
Board of Directors
Profit
Earning before interest and tax
Earning after tax
Stock Exchange
Century Synthetic Fiber Corporation‟s abbreviation
Corporate finance
General Director
State Securities Commission of Vietnam
Vietnam Securities Depository
The amount of capital contributed or undertaken to be
contributed by shareholders in a certain period and stated in the
charter of the company
Ernst & Young Vietnam company limited
Charter of Organization and Operation of the STK
Delivery Order
Quality Assurance
Quality Control
IV.
STATUS AND CHARACTERISTICS OF THE LISTING COMPANY
1.
Summary of formation and development milestones
1.1
About the Company
Company's name
:
CENTURY SYNTHETIC FIBER CORPORATION
Abbreviate
:
STK
Charter capital
:
VND 423.053.360.000
Head office
:
B1-1 Northwest Cu Chi Industrial Zone, Cu Chi district,
HCMC
Phone
:
(08) 3790 7565
Website
:
www.theky.vn
Fax: (08) 3790 7566
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Business registration certificate : new number 0302018927 (old number 4103003288)
issued 1st by HCMC Department of Planning and Investment on 11/04/2005 and
amended 13th on 14/01/2015.
Bank account
1.2
:
000149960001 at DongA Bank – Head office
History of formation and development
 2000: Established on 01/06/2000
STK was formerly named Century Producing – Trading Company Ltd.. The
Company was established on 01/06/2000 under the Business Registration Certificate
number 4101001242, issued by HCMC Department of Planning and Investment on
01/06/2000, major in producing DTY yarn (Draw Textured Yarn) from the imported POY
material yarn (Partially Oriented Yarn).
Head office and plant of STK are built in the area of 16,800m2 at Northwest Cu
Chi Industrial Zone, Cu Chi district, HCMC. The plant is equipped with modern
production lines imported from the Barmag Oerlikon Group, specializing in producing
synthetic fibers of polyester with full specifications and categories. Total designed
capacity of DTY (Draw Textured Yarn) plant is 4,800 tons/year.
 2003: Further investment to expand production capacity
In 2003, taking advantage of the strong growth in the textile industry, STK has
invested to further expand DTY production capacity to double, equivalent to 9,600
tons/year to meet market demands.
 2005: Transformed into a joint stock company
On 11/04/2005, STK was transformed into a joint-stock company under the
business registration certificate number 4103003288, issued by the Department of
Planning and Investment of HCMC with a charter capital of VND50bn. This strategic
change helped diversify STK‟s mobilized capital to meet the constantly evolving needs of
the Company.
 2007: Increased capital, invested in expanding production capacity, received
ISO 9001: 2000 certificate
STK received ISO 2000 version 9001 certificate issued by the AFNOR
organization (the Association Française de Normalisation), a branch of the European
Committee for Standardization (CEN) and is a member of the International Organization
for Standardization (ISO). Currently, the Company has been certified ISO 9001: 2008.
The Company‟s production processes always strictly adhere to ISO 9001: 2008 standards,
KAIZEN, and 5S consulted and implemented by Japanese experts.
On 2007, STK increased its chartered capital by issuing new shares to existing
shareholders, strategic shareholders and employees. The Company‟s chartered capital was
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
hence increased from VND50.0bn to VND91.5bn. The additional capital was then
invested in POY production plant with a capacity of 14,500 tons/year and expanding
export markets to strengthen the "Century" brand name‟s position in the international
market. The total production capacity of DTY rose to 15,000 tons/year during the same
period.
 2008: Became the first company in Vietnam to produce polyester microfilament
from polyester chip
STK began to operate the POY (material to produce DTY) production plant to help
boost the Company‟s profit. The investment in POY production also aims to reduce the
dependence on imported raw materials, to hedge against the fluctuations in price and
supply of POY. The total production capacity of POY reached 14.500 tons/year. The
investment in POY production line is a turning point in the development of the STK and it
opened up new opportunities for STK, because in this event, STK officially became the
first company in Vietnam to be able to produce polyester microfilament from polyester
chip.
 2009 - 2010: Increased capital and further investment in the second plant in
Trang Bang Branch, Tay Ninh Province
Established “STK Branch” at: Road No.8, Trang Bang Industrial Zone, An Tinh
commune, Trang Bang district, Tay Ninh province with investment certificate
No.45211000130 issued on 26/06/2009 by the Tay Ninh Industrial Zones Management
Committee.
During the year, STK issued new shares to existing shareholders and strategic
investors to increase its chartered capital to VND180bn. Mobilized capital was used to
invest in POY, DTY, FDY production lines at Trang Bang Branch, increasing the
production capacity of DTY and POY by another 11,000 tons/year. The plant construction
started on 28/11/2009 and began operations from 18/01/2011.
 2011: Became a public company
On 21/02/2011, STK officially became a public company. Becoming a public
company showed that the Company always commits to maximize the benefits of clients
and shareholders. The Company constantly enhances administration efficiency,
transparency in management and information disclosures.
 2011 - 2013: Began to operate the yarn plant at Trang Bang Branch
The plant was inaugurated to put into operation from January 2011. Besides POY
and DTY, the plant also produces a new product – FDY to meet the needs of customers
and markets. With this project, the Company‟s total capacity was raised to 29,500 tons
POY/year and 37,000 tons DTY & FDY/year.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
To meet its long-term development strategy, from the beginning of 2012, the
Company was formally adopted the most modern business resources governance system –
ERP (SAP All-in-One) and now all the work has been operating on this SAP system.
 2014 - 2015: Further expansion at Trang Bang Branch – Phase 3
To seize 1) The opportunity of shifting orders causing fabric manufacturer (fiber
manufacturers' customers) to move from China to Vietnam, 2) The tremendous
opportunities brought by TPP, and 3) At the same time to optimize the production scale of
the Company, STK has implemented an investment project to expand the plant at Trang
Bang Branch - Phase 3. Details of the project is as follows:
 Total investment: ~USD33.9mn.
 The Company will import an entire automatic DTY spinning machines with the
most modern technology that is made by the top European Corporation Oerlikon Barmag. This technology will help the Company further improve its
product quality. This is an important point to increase customer satisfaction.
Also due to being automated, the labor required for each stage of production is
effectively reduced, especially at night shifts, which helps reduce costs and
increase productivity.
 The new plant has a production capacity of about 15,000 tons of POY/year and
15,000 tons DTY/year, lifting the total capacity of the Company to about
52,000 tons DTY & FDY/year and 44,500 tons POY/year.
About the construction progress, by the time of July 2015, the company has
completed 100% of the project. Currently, the project Trang Bang - Phase 3 is performing
as planned and mining officially a half of its capacity from July 2015, bringing total
capacity up to 44,500 tons per year in 2015 and 50% of the remaining capacity will
continuously put into an official operation from the beginning of January 2016, the total
capacity is expected to be raised up to 52,000 tons per year in 2016. In this project, STK
will also invest in a Plant Operation System (Plant Operations Center - POC), designed
and provided by Barmag Oerlikon Group. POC system will help STK improve the
production management efficiency and control product quality to increase customer
satisfaction.
1.3
Business activities and products / services offered by the Company
As the Business Registration Certificate new number 0302018927 (old number
4103003288) issued 1st by HCMC Department of Planning and Investment on
11/04/2005 and amended 13th on 14/01/2015, the Company is allowed to operate in the
following business field:

Producing synthetic filament (Detail: Producing Synthetic filaments)
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Manufacturing knitted fabrics, knitting fabrics and other non – woven fabrics
(Detail: Knit).

With the registered business field, the Company currently offers the following
products: POY, DTY and FDY yarn.
1.4
Introduction to the Company's capital raising progress
Since its equalization, STK has raised its charter capital by 13 times, details as
follows:
Bảng 1: Capital raising progress of the Company
No
Date
1
05/2007
2
09/2007
3
01/2008
8,500,000,000
4
12/2008
12,000,000,000
5
11/2009
28,000,000,000
6
01/2010
40,000,000,000
7
09/2010
17,326,400,000
07/2011
SSC (as announcement
Issuing Stock dividends and posted
on
SSC‟s
32,561,940,000
ESOP shares to employees
website on 06/04/2011
and 07/06/2011)
9
05/2012
SSC
(as
Dispatch
number 1236/UBCKQLPH
issued
on
20/04/2012
10
06/2013
8
Incremental
Capital Value
Capital raising type
Licensors
Issuing new shares for
15,000,000,000 founding shareholders and
employees,
Issuing new shares for current
26,500,000,000 shareholders and strategic
partners
Department of Planning
and Investment
of
HCMC
Department of Planning
and Investment
of
HCMC
Department of Planning
Issuing new shares for
and Investment
of
strategic partners
HCMC
Department of Planning
Issuing bonus shares
and Investment
of
HCMC
Department of Planning
Issuing new shares for current
and Investment
of
shareholders
HCMC
Department of Planning
Issuing new shares for
and Investment
of
strategic partners
HCMC
Department of Planning
Issuing bonus shares
and Investment
of
HCMC
45,026,570,000 Issuing Stock dividends
40,510,930,000
Issuing new shares to increase SSC
(as
Dispatch
charter capital
number 2024/UBCK-
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
No
Date
Incremental
Capital Value
PROSPESTUS
Capital raising type
06/2014
Issuing new shares to pay
77,627,520,000 2013 dividends and increase
charter capital
12
06/2014
Issuing shares to pay
dividends in 2013 and issued
77.627.520.000
shares to increase the equity
from equity sources
13
11/2014
30.000.000.000
11
Issuingsharesby
offering
public
Licensors
QLPH
issued
on
22/05/2013)
SSC
(as
Dispatch
number 1883/UBCKQLPH
issued
on
08/05/2014)
SSC
(as
Dispatch
number 1883/UBCKQLPH
issued
on
08/05/2014)
SSC (as Certificate
number
92/GCNUBCK
issued
on
31/10/2014)
Source: STK
2.
Structure of the Company
 Head office:
-
Address: B1-1 Northwest Cu Chi Industrial Zone, Cu Chi district, HCMC
-
Phone: (08) 3790 7565 Fax: (08) 3790 7566
-
Website : www.theky.vn
 Branch:
-
Address: Road No.8, Trang Bang Industrial Zone, An Tinh commune, Trang
Bang district, Tay Ninh province, Vietnam
- Phone: (66) 3899 537 Fax: (66) 3899 536
 Company’s representative office:
- Address: 102-104-106 Bau cat street, Ward14, Tan Binh District, Ho Chi
Minh City, Vietnam.
 Departments of the Company:
Departments of the Company include:
- Strategic Development Department;
- General Management Department;
- Business Department;
- Production – Technology Department;
- Finance – Accounting Department;
These departments perform work functions to ensure that the management,
organization and administration of the business operations of the Executive Board are
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
effective and lawful.
The organizational model of the STK is shown in the following diagram:
Picture 1Error! Bookmark not defined.: The organizational model of the STK
General Meeting
of Shareholders
Supervisory
Committee
Board of Directors
Board of
Management
Strategic
Development
Deparment
General Management Department
Business
Deparment
Production –
Technology
Deparment
Finance –
Accounting
Deparment
Human Resource
Development
Human
Resource
Internal
Control
Business
Production Unit
Finance
Business
Development
Supply
General
Service
Production
Planning
Quality Control
Unit
Accounting
Purchasing
Technology and
R&D
IT
Import Export
Source: STK
3.
The management structure of the Company
3.1
General Meeting of Shareholders (GM)
General Meeting of Shareholders is the highest authority of the Company. Annual
General Meeting of Shareholders is held once a year. General Meeting of Shareholders
shall be held annually within four months from the end of the fiscal year.
Board of Directors convenes an annual meeting of shareholders and chooses the
suitable site. Annual General Meeting of Shareholders decide the matters in accordance
with the laws and the Company Charter , particularly through its annual financial report
and budget for the next fiscal year. The independent auditors may be invited to attend the
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
meeting to advise the adoption of the annual financial report.
3.2
Board of Directors (BOD)
The Board of Directors is the governing body of the Company, which includes 06
members, responsible for orientation, directing business operations and internal affairs
of the Company. The BOD has full power to implement all the rights in the name of the
Company except those belong to the competence of the General Meeting of
Shareholders. The BOD is responsible for overseeing the General Director and other
management staff.
The rights and obligations of the Board of Directors are regulated by law, the
Company Charter, internal regulations of the Company and the decision of the General
Meeting of Shareholders.
The number of members on the Board of Directors ranges from five (05) to seven
(07) persons. Number of the Board of Directors‟ members of each term, each stage will
be approved by the General Meeting of Shareholders based on the recommendation of
the Board of Management. The term of the Board of Directors shall be five (05) years.
The term of the members of the Board of Directors shall not exceed five (05) years;
members of the Board of Directors may be elected for an unlimited number of terms.
The total number of members of the independent Board of Management must occupy at
least one third (1/3) of the members of the BOD. The minimum number of independent
Board members is determined by the method of rounding down.
3.3
Supervisory Committee (SC)
The Company's Supervisory Committee consists of 03 members. The SC is the
agency responsible for assisting the General Meeting of Shareholders to monitor, and to
evaluate the business performance of the Company in an objective manner to ensure
benefits for all shareholders.
SC‟s members must not be in the Accounting – Finance department and members
or employees of the independent auditor that conducting the auditing of the financial
statements of the Company. The SC must have at least one (01) member who is as an
accountant or an auditor. SC‟s members must not relate to the members of the BOD, CEO
and other management staff of the Company. The SC must appoint one (01) member as its
head. Head of the SC must have expertise in accounting.
3.4
Board of Management
The Company‟s Management system must ensure that the Company‟s
Management is held responsible to the BOD and operates under the leadership of the
BOD. The Company has one (01) CEO appointed by the Board of Directors.
The CEO has the authority and responsibility as followed:
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PROSPESTUS
 Implementation of the BOD‟s and the GM‟s resolutions, business plans, and
investment plans approved by such parties;
 Deciding all matters that not require the resolution of the BOD, including being
on behalf of the Company to sign trade and financial contracts, organizing and
administrating the normal production and business activities of the Company with best
practices;
 Recommending the number and types of management staff that the Company
should hire, appoint or dismiss as needed. Determining the salaries, remuneration,
benefits and other terms of the labor contract for management staff.
3.5
Departments and divisions within the Company
Departments and units of the Company perform work by functional expertise and are built
in streamlined structure but still ensuring the management, organization and
administrating of production and business activities under the direction of the BOD
effectively and productively. The Company's departments and divisions include:
a. Business Department
 Sales Function: Building and developing customer network, negotiating sales
transactions. Observing orders, delivering progress, clients‟ payment progress.
 Market research: understanding demand, price, market potential and current
market share of the Company. Assessing customer needs and learning the rules of
supply and demand of seasonal products being traded. From those information, the
team will forecast future development which helps the Company effectively build
its production and business strategy .
 Customer support: frequently contacting customer, receiving and resolving all
requests from customers about providing new products, delivery time, service
quality and product quality.
b. Production Planning Department
 Building actual manufacturing plan for the DTY, FDY and POY plant by orders;
controlling the production progress, product quality to ensure delivery on schedule.
 Planning in SAP: Creating production orders in SAP; Create PR processing for the
factory of Trang Bang branch; Regulating POY products between the Head Office
and branch to meet production requirements.
 Providing materials for plants: to balance and request purchasing orders correctly,
adequately and reasonably the following items: materials, auxiliary materials, oilimpregnated fiber serving production; Observing material needs; Inventory control
according to the maximum – minimum norm.
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PROSPESTUS
c. Procurement Department
 Ensuring the sufficient supply of materials and equipment to meet production
needs. Negotiating with service providers to meet the requirements of production
and usage of departments within the Company.
 Responsible for meeting goods purchasing schedule that meets required standards
in terms of quality, quantity, specifications and categories with appropriate price
and complete and valid payment invoices.
 Coordinating with related parts to control and to build order plans, delivery plans
to ensure safe level of inventory, meeting production plan. Plans established must
be reasonable, effective and cost saving.
 Developing a network of suppliers, monitoring and evaluating capacity of
suppliers, helps the Company build a network of stable supply in terms of quality,
quantity, timing with best prices.
d. Production Unit
 Setting up and control the company products‟ quality.
 Managing manufacturing operations: arranging, organizing, and managing staff to
meet production needs. Improving skills and training for employees.
 Implementing production plans: organizing production to meet both requirements
of orders and proposed production plans.
 Setting up plan and implementing equipments maintenance to improve the its
quality, maintancing smooth operation as well as products quality.
 Strictly controlling quality and efficiency of using the materials and sub-material
by assessing and sending the monthly efficient material report to suppliers to let
them improve product. Besides, the Production Unit associated with the Quality
Control Department, Purchasing Department and Production Planning Department
to assess and eliminate unqualified syppliers.
 Building monthly budget and other monthly plans on costs, raw materials and
auxiliary materials for production.
 Setting up and control the budget capial, the quota of using materal, sub material
and operation expenses.
e. Production – Quality Control Department
 Controlling the production process: : controlling product quality to ensure provide
customers products that meet the criteria and demand of customers. Controlling
working processes to ensure product quality meet the standart of Company.
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PROSPESTUS
 Strictly controlling of input materials through the evaluation criteria of the material
quality and acceptance method, then proactively feedback to providers to improve
quality and firmly rejected the poor quality and lack of stability suppliers.
 Collecting data, analyzing and improving production process: updating data,
evaluating daily production results and proposing improvement plans to improve
product quality to increase the satisfaction of customers, reducing waste in
production. Advising the BOM on production planning.
f. Import – Export Division
 Performing the Import - export procedures to timely meet up the production needs
of Company.
 Updating and applying provisions of international trade law. Ensuring the
compliance of tax, customs procedures and State regulations.
 Making the tax payments on time to optimize the import expenses.
g. Technology and R&D Department (QA-R&D)
 Satisfying the requirements of the market and customers: seeking information
about customer requirements for products; guiding customers to use products
efficiently; providing product samples to customers.
 Improving product quality: collecting information about the quality of similar
products. Utilizing data from QC, analyzing of potential shortcomings with the
quality of the product.
 Resolving complaints: in cases of receiving complaints from customers, analyzing
the causes and coordinating with relevant units to resolve complaints and track
improvement after complaints.
 Developing new products: using information from the business units and customer
to develop new features based on the understanding of the Company's existing
machines characteristics and the firm‟s capability in developing new products.
h. Human Resource Department
 Researching and planning human resource development: adjusting organizational
personnel at company level and department level in accordance with company
developing objects. Setting objectives, policies and planning human resource
development. Managing labor resource and other labor relations.
 Recruitment and training: recruiting as planned and on-demand from production
units. Identifying needs and organizing training internally and externally.
Assessing the effectiveness of training programs.
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
 Managing and implementing regulations and policies on salaries, bonuses, benefits
and allowances: building income incentive programs in consistent with the
business model of units within the Company. Constructing bonus and other
benefits system.
i. Finance Department
 Creating ample financial sources for the business of the Company. Providing
financial information accurately, timely and useful to serve the administration and
management of the BOM;
 Forecasting the operation results, managing the budget and finance, analysing and
making investment plans, business policies in order to achieve optimal efficiency
and minimize risk to the Company.
j. Accounting Department
 Providing accurate accounting information, timely and helpful for governance and
excutive works for the company‟s BOD and others;
 Improving and developing management tools; managing incomes and expenses,
control materials and assets; Cost control, business results reflect timely, adequate
in principle comply with current legislation.
k. Information Technology Department
 Management information infrastructure and developing information technology
applications applied in all areas of the Company‟s operations.
 Developing and implementing short-, medium- and long-term plans in terms of
applications and information technology development in accordance with the
Company‟s strategic planning.
 Ensuring information security for all information technology activities of the
Company.
l. General Administration Department
 Maintaining discipline in accordance with the rules and other regulations of the
Company.
 Protecting the Company‟s assets through infrastructure adminstration, managing
people and assets going in/ out of the Company.
 Implementing logistic works through providing shuttle buses to pick up
employees, providing mid-shift meals, health care, accommodation, uniforms, and
workwear items.
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
 Implementing governance, administration, compliance: reception, internal events,
updating business licenses, storage hubs.
 Managing security works, labor protection, fire protection, sanitation.
m. Supply Department
 Managing inventory, warehouses.
 Managing and be responsible for the accuracy of records, data and documents
related to the goods, materials and other components and parts.
 Implementing operational warehousing work, including importing / exporting
goods, materials, and components in accordance with standards, schedules,
documents and prescribed operational procedures.
 Managing the external transportation to deliver goods in accordance with schedule
and customer requirements.
 Storing products in accordance with the standards required for each item. Be
responsible for arranging goods to ensure ease of management and entry under the
stated regulations.
 Delivering/ receiving goods to meet production needs.
 Coordinating in tracking calendar on goods import / export to arrange and conduct
works effectively.
 Establishing documentation relating to the delivery of goods and be responsible for
the accuracy and validity of the documents.
 Performing freight delivery and storing goods during transportation to ensure onschedule delivery to meet requirements for production and business activities of
the Company.
n. Internal Control Department
 Operational controls: Controlling the execution of all functions and duties of
departments vertically and business processes horizontally.
 Financial controls: establishing audit procedures to prevent financial risk and to
ensure that the Company‟s financial statements do not have any significant
misstatements.
 Advising the BOD/ BOM: identifying risks and recommending measures to restrict
and/or eliminate risk.
o. Human Resource Developing Deparment:
 Based on Company‟development strategies, Human Resource Developing
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PROSPESTUS
Deparment make the research to advise to BOD in improve orgrnazation structure,
find out the qualified personnel for each position.
 Finding out the potential staff and training them.
p. Enterprise Development Department:
 The function of research and development strategy: analyzing macroeconomic
situation, trends and industry perspective in order to find out the company‟s
growth opportunities as well as risks and challenges. On that basis, along with
gathering information and analyzing the operations of the Company, the Finance
Department will give advice to BOD in developing the company‟s business
strategies.
 The function of investor relations and public relations:
- A liaison between the company and shareholders, potential investors, financial
service organizations and the public via AGM meeting, meetings with
investors, the analyst, reports preparation and updating the company‟s
operations for shareholders and investors, answer and receive feedback from
investors and hareholders.
- Implementation of information disclosure in accordance with the Ho Chi Minh
Stock exchange‟s regulation.
- Fulfillment of the offering, dividend payment and listing shares.
- Accuracy transparent managing and updating shareholders‟s information.
Building relationships with the investment community.
- Managing and updating the company’s website.
- Documents preparation to promote own business with customers and business
partners.
- Update the articles written about the company and giving feedback on the
article‟s accuracy.
- Building relationships with the media.
3.6
Labor unions
Labor Union of STK is an union unit subordinating EPZ & IPZ Management
Board Ho Chi Minh City (Hepza) which was established in 2002, whose functions are:
Representing workers in the enterprise to ensure the legitimate rights of workers
(in accordance with the policy of the State regarding welfare, income, and reward, etc.)
Communicating with and educating workers to contribute to the production of the
Company in a practical and effective way to ensure the Company‟s stability and
sustainability with the aim to increase employees‟ income and to enhance their quality of
life.
THE ADVISOR: DONG A SECURITIES CO., LTD
28
CENTURY SYNTHETIC FIBER CORPORATION
4.
PROSPESTUS
List of shareholders holding over 5% of Chartered capital, list of founding
shareholders and shareholder structure
4.1
List of shareholders holding over 5% of the company’s Chartered capital
Up to the time May 15th, 2015, list of shareholders holding over 5% of the
company‟s chartered capital as follows:
Table 2 Error! Bookmark not defined.: List of shareholders holding over 5% share
capital of the Company
No
ID/
Business
registration
license
Stock-holder
1
Dang Trieu Hoa
2
Dang My Linh
023323687
3
Dang Huong Cuong
023323688
4
Huong
investment
consultant
corporation
0309139688
CS1077
5
Vietnam
Limited
023323686
Viet
Holding
Address
51 (A30) Bau Cat
Street, Tan Binh
district, HCMC
65/39 Phu Tho,
Ward 1, District
11, HCMC
65/39 Phu Tho,
Ward 1, District
11, HCMC
Shares holding
Number of Ownership
shares
proportion
holding
/ capital
(%)
5.881.419
13,9%
3.608.251
8,53%
3.608.251
8,53%
52 Dong Du st.,
Ben Nghe Ward,
District 1, HCMC
7.928.668
18,74%
Floor 8, Nam A
Bank‟s building
201 – 203 Cach
mang thang Tam
st.,
Ward
4,
District 3, HCMC
3.396.750
8,03%
24.423.339
57,73%
Total
Source: STK
4.2
List of founding shareholders:
Table 3Error! Bookmark not defined.: The company’s list of founding shareholders
Shareholder’s name
Dang Trieu Hoa
ID
Address
023323686
51 (A30) Bau Cat
Street, Tan Binh
district, HCMC
THE ADVISOR: DONG A SECURITIES CO., LTD
Number of
shares owned
at 15/05/2015
Ownership
rate on
chartered
capital (%)
5.881.419
13,9%
29
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Dang My Linh
023323687
65/39 Phu Tho, Ward
1, District 11, HCMC
3.608.251
8,53%
Dang Huong Cuong
023323688
65/39 Phu Tho, Ward
1, District 11, HCMC
3.608.251
8,53%
4.3
Shareholder structure
As of 15/05/2015, the Company‟ sharesholder structure is as follows:
Table 4Error! Bookmark not defined.: The Company’s shareholder structure
No
Shareholders
1
Shares number
Domestic Investors
Ownership (%)
38.308.586
90,25%
0
0,00%
9.445.156
22,33%
28.863.430
68,22%
Foreign Investors
3.996.750
9,45%
2.1
Institutionals
3.996.750
9,45%
2.2
Individuals
0
0,00%
42.305.336
100%
1.1
The State
1.2
Institutionals
1.3
Individuals
2
3
Total
Source: STK
5.
List of parent companies and subsidiaries of the listing company, the
companies that the listing company is holding controlling or dominant stake,
the companies holding control or dominant stake of the listing company
5.1
List of parent companies and subsidiaries of STK
NA.
5.2
the companies that STK is holding controlling or dominant stake, the
companies holding control or dominant stake of STK
NA.
5.3
List of associates or join ventures of STK
In the second quarter of 2015, STK has invested in a joint-venture company named
Unitex Corporation with detail business registration information as follow:
 Business name: Unitex Corporation
 Address: Unit A17/1 C1 Street, Thanh Thanh Cong Industry Part, Tay Ninh
Province.
 Certificate No.: 452033000336 issued on 29 June 2015 by Economic Zone
Management Board of Tay Ninh province .
THE ADVISOR: DONG A SECURITIES CO., LTD
30
CENTURY SYNTHETIC FIBER CORPORATION





No
6.
PROSPESTUS
Business type: Manufacture of fiber ; Manufacture of finished cloth ; Finishing
textiles , dyeing ; Producing all kinds of twine and netting.
Chartered Capital: VND 80.000.000.000 (eighty billion dong)
Contributed Chartered Capital: At 30 June 2015, STK contributed the capital of
VND 7.468.652.342. The other founding shareholders will fully pay in within
90 days from Business Register Certificate issued date (29th June 2015).
STK‟s registered capital/ contributed capital: VND 39.992.000.000 / VND
7.468.652.342.
The total shares of fouding shareholders are 8.000.000 common shares as
follow:
Fouding shareholders name
Number of
share
Registed Capital
(VND)
Proportion
(%)
1
Century
Synthetic
Corporation
Fiber
3.999.200
39.992.000.000
49,99
2
Uni Industrial and Investment
Corporation
4.000.000
40.000.000.000
50,00
3
Mr Nguyen Van Hai
800
8.000.000
0,01
Business activities
6.1
Business model
Picture 2 Error! Bookmark not defined.: Company’s business model
THE ADVISOR: DONG A SECURITIES CO., LTD
31
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Logical organizing : The company has a efficient organizational structure by flows
of work. Departments coordinate with and support each other during the operation.
Lean manufacturing: The flow chart below shows that the Company allocates
departments and divisions efficiently as workflows. All phases are well planned and
tightly controlled so that working capital need is minimal. Thanks to the application of
SAP All in One, the company has a resourceful management system to ensure that
inventory level is minimal but still meets customer‟s demand.
Quality-oriented products: All processes comply with standard operating
procedures and are controlled by modern quality assurance systems such as ISO 90012008, Kaizen, and 5S. Especially, production, operational testing, product quality and
machinery controlling are put in the company‟s top priority.
Picture 3Error! Bookmark not defined.: Activity diagram of the Company
THE ADVISOR: DONG A SECURITIES CO., LTD
32
CENTURY SYNTHETIC FIBER CORPORATION
6.2
PROSPESTUS
Product Quantity / Service value over years
STK‟s main products are polyester Draw Textured Yarn (DTY) and Fully Drawn
Yarn (FDY); both are synthetic fibers and are manufactured from polyester chips (a
petroleum product).
Polyester fiber is physicochemically more stable than other artificial fibers such as
nylon, acrylic; suitable for high-speed and continuous production technology, and
polyester fiber can easily replace other natural fibers such as cotton.
Product made from polyester is smooth, light and airy, and better than cotton yarn
in terms of price, quality and usefulness. Polyester fiber is used to produce outdoor
garments such as ski jacket, windbreaker, sportswear and leisure wear. Also, polyester
fiber combined with spandex yarn can be applied to the production of products with fourway stretch such as swimwear, elastic belt, elastic bands and other household products
such as cloth, towel chairs, sofa fabric, window blinds, carpet, etc,…
STK‟s products meet international quality standards and are provided for weaving
factories (producing woven fabric such as fleece fabric, brushed fabric, trousers, vest).
These factories then would supply footwear raw materials for multinational companies
such as Nike, Adidas, Uniqlo, Columbia, Ikea, Reebok, Guess, Decathlon.
100% POLYESTER TEXTURED YARN (DTY), S/D,R/W, FDY
Picture 4Error! Bookmark not defined.: Some pictures about the company’s
productions
THE ADVISOR: DONG A SECURITIES CO., LTD
33
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
SOME FINISHED PRODUCTS ARE MADE OF SPECIALIZED FIBER
Source: STK
 Revenue growth in the previous years and the latest quarter
The STK business generally maintains a stable growth over the yeas. As 2008 2014 period, net revenue grow more than 5 times reaching up revenue of 1.458 billion by
FY14, equivalent to average compounded annual growth rate of 31,96%/year. Revenue
increased in this period came from : (1) the increase of plant capacity and sales volume
THE ADVISOR: DONG A SECURITIES CO., LTD
34
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
over the year, and (2) the increase of average of sales price from VND 28 million/ton at
2008 to VND 48,35 million/ton in 2011 – 2014 period.
STK had net revenue of VND 1.458 billion, slightly up by 3% yoy and CAGR
reached to 16%. Due to ỉncease plant capacity, FY2014 revenue increased by 4,8% yoy.
Nontheless, fiber selling prrice decreased by 4,3%, due to the down trend of market price,
has made the company‟s revenue increased slight by 3%.

Revenue Growth:
Chart 2: Net Revenue and average selling price (2008 – 2014)
1.600
55,3
47,9
1.400
43,2
1.200
1.458
60
46,1
44,1
50
40
935
28
30
30
506
600
400
1.453
1.099
1.000
800
VND million/tấn
Net Revenue and selling price
VND billion
276
20
373
10
200
00
0
FY2008A FY2009A FY2010A FY2011A FY2012A FY2013A FY2014A
Net Revenue
Average selling price
By half year 2015, Net revenue of approximately 60 billion, 46% higher than
planned in 2015 (VND 1.695 billion) and decrease 18% compared to the same period last
year. This resul came from: (1) 1H 2015 average selling price decreased to VND 39.9
million/ton due to material price continue to decline in the 1H 2015 and (2) STK focused
on selling luxury products (chopped fibers) to meet market demand.

Revenue breakdown:
Table 5Error! Bookmark not defined.: The percentage of each operating revenue to total
revenue
Unit: million Vietnam dong
2013
Items
Sales Net
2014
6M 2015
Volu
me
Value
%/
total
rev
Volu
me
Value
%/
total
rev
Volu
me
Value
%/
total
rev
31.524
1.453.047
99,48
33.053
1.457.517
99,80
15.795
630.345
98,69
THE ADVISOR: DONG A SECURITIES CO., LTD
35
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
2013
Items
2014
6M 2015
Volu
me
Value
%/
total
rev
Volu
me
Value
%/
total
rev
Volu
me
Value
%/
total
rev
DTY
28.722
1.349.812
92,41
29.257
1.323.287
90,61
14.113
576.865
90,32
FDY
2.802
103.235
7,07
3.796
134.230
9,19
1.682
53.480
8,37
7.090
0,49
2.126
0,15
7.928
1,24
471
0,03
845
0,05
440
0,07
1.460.608
100
1.460.488
100
638.713
100
Revenue
Financial
Income
Other
Incomes
Total
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK
At the end of FY2012, STK focused on producing DTY fiber that make the DTY
revenue account for 99,9% on total revenue. Entering FY 2013, to exploit the market
demand, STK started producing FDY fiber to meet the market demand. Nontheless, STK
had just producing low number to test the market. Therefore, FDY revenue just accounted
for 7,1% on total revenue. By FY 2014 and FY 2015, DTY revenue primarily accounted
for 90,79% on 2014 revenue and accounted fỏ 91,52% on 1H 2015 revenue. FY 2014 and
1H 2015 FDY revenue had slightly increased compare to 2013.
Chart 3 Error! Bookmark not defined.: Breakdown revenue by product
FDY
7,11%
2013
DTY
92,90%
2014
DTY
90,79
%
6 tháng/2015
FDY
9,21%
FDY
8,48%
DTY
91,52%
Nguồn: STK
Source: STK

Profit Growth:
THE ADVISOR: DONG A SECURITIES CO., LTD
36
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Operating gross profit tends to increase. FY 2014, gross profit reached VND 213
billion, more than 6,17 times over FY 2008 gross proifit (VND 34,5 billion) and more
than 20% over the last year. The vertical development (Produced POY started in 2008),
increase plant capacity and the decrease of material prices contributed to the increase of
gross profit in this period.
Chart 4 Error! Bookmark not defined.: Gross profit and gross margin(2008 – 2014)
Tỷ đồng
Gross profit and Gross margin
23%
250
20%
25%
19%
200
150
13%
16%
14%
20%
15%
12%
15%
100
10%
050
5%
35
75
118
178
175
177
213
000
0%
FY2008A FY2009A FY2010A FY2011A FY2012A FY2013A FY2014A
Gross profit
Standard gross margin
Gross margin
Source: STK
Gross margin fluctuated sharply in period of 2008 – 2014. During this period,
gross margin increased from 12,5% in FY2008 to 23,4% in FY2010 before declining to
15% at the end of FY2014. The gross margin increased in period of 2008 – 2009 had been
contributed from starting producing POY (STK imported polyester chip and produced
POY instead of buying POY from the market as before); Beside that, due to the scarcity
of global cotton demand, the increase of demand of buying polyester to replace cotton
increase STK profit. Since 2009 – 2011, selling price increased faster than input price.
But it had been versus since 2012 – 2013, leading gross profit margin had been narrow
toward the standard Company gross margin (approximately 13,5%). Nonetheless, gross
margin has increased, rising from 12% at 2013 to 15% at 2014, exceeding the company
standard gross margin.
First half of 2015 Gross profit was approximately VND 116 billion, increase
10,13% yoy. First half of 2015 raw material price continued to fall more than selling
price, leading gross profit up to 18,13% yoy. First half of 2015 net profit was VND 54,66
billion, increased 16% compare to planed and increased 3,6% yoy. Financial income (FX
gain) has increase over last year although Company has booked FX loss of the loan of
USD 24 million (this loan is used to expand factory at Trang Bang branch – Phrase 3).

Net profit breakdown:
In 2014. DTY pre-tax profit still accounted for a large propotion in total net profit.
But FDY will account for a large propotion in the future due to the improvement the
THE ADVISOR: DONG A SECURITIES CO., LTD
37
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
technology and take advantage from TPP.
Table 6Error! Bookmark not defined.: Break down pre-tax profit
Item
Operating profit
DTY
FDY
Financial Profit
Other Profit
Total
FY2013
Value
%/total
pre-tax
profit
109.401
114,87
115.448
121,22
(6.047)
-6,35
(13.975)
-14,67
(186)
-0,20
95.240
100
Unit: million Vietnam dong
FY2014
6M2015
Value
Value
%/total
% Tổng
pre-tax
LNTT
profit
145.833
107,10
82.604
117,17
143.301
105,24
81.725
115,93
2.532
1,86
879
1,25
(10.416)
-7,65
(12.479)
-17,7
747
0,55
372
0,53
136.164
100
70.497
100
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK
6.3
Plant capacity and sales volume through the years
STK capacity has increase sharply from 15.000 ton/year to 37.000 ton/year in
period of 2008 – 2014. Sale volume also increased rapidly, reaching 33.053 ton/year at
the end the 2014, corresponds to the plant capacity of 94% at the end 2014.
The designed production capacity is the average capacity of a standard product and
for 365 days/ year. However, to ensure quality machines always in condition to meet the
required standards of Europe, machine using productivity is usually eliminated time
needed for maintenance, about 25 days a year. The actual machine using time is about 340
days/year (equivalent to exploiting ability of 93%). The actual capacity may increase or
decrease depending on the product index (denier). With the modern technology and
equipments, the Company is capable of producing multiple product lines with broad
product index. The Company changes the production based on the market demand from
time to time. Those years of lower machine using productivity below 300 days was
mainly due to machine mantainance. In addition, the Company experienced
manufacturing downtime triggered by frequent change in product specification.
Table 7Error! Bookmark not defined.: Actual days of machine using from 2008 to 2014
2008
Actual days of machine
335,80
using (days) (1)
Designed
days
of
machine using (days) (2)
365
2009
2010
2011
2012
2013
2014
343,10
335,80
299,30
288,35
328,50
345,74
365
365
365
365
365
365
THE ADVISOR: DONG A SECURITIES CO., LTD
38
CENTURY SYNTHETIC FIBER CORPORATION
Actual machine using
rate (%) (3) = (1)/ (2)
PROSPESTUS
94%
92%
82% (1)
79% (2)
90%
94%
Actual
production
10.940
volume (tons)
12.095
10.706
17.833
23.080
30.375
32.442
Sales volume (tons)
12.405
11.709
16.900
22.930
31.525
33.053
92%
9.850
Note: (1),(2): machine using productivity is lower than the standard because the Trang Bang
factories 1 and 2 officialy went to the manufacturing in the end of the year but the increasing
productivity of these factories is still accumulated the total production capacity of the year.
Chart 5 Error! Bookmark not defined.: Designed capacity and machine using rate of the
Company from 2008 to 2014
Design capacity & plant extraction rate
Ton/ year
40000
35000
100%
92%
94%
92%
94%
93%
95%
90%
30000
90%
25000
82%
20000
85%
79%
15000
80%
10000
5000
75%
15000
15000
15000
26000
37000
37000
37000
0
70%
FY2008A FY2009A FY2010A FY2011A FY2012A FY2013A FY2014A
Công
suất
thiết kế
Design
Capacity
năng
suấtCapacity
khai thác thực tế
Actual
năng
suất khả
năng khai thác
Potential
Capacity
Source: STK
From 2008 to 2014, STK has constantly expanded production to meet the market
demand. After investing and expanding the factory 2 times, the current designed capacity
of the Company has increased to 37,000 tons/year from the capacity of 15,000 tons/year
in 2008.
Chart 6Error! Bookmark not defined.: Sale volume from 2008-2014
Tons
40.000
31.525
30.000
33.053
22.930
16.900
20.000
9.850
10.405
11.709
10.000
0
FY2008A FY2009A FY2010A FY2011A FY2012A FY2013A FY2014A
Sản
lượng
tiêu thụ
Sale
Volume
Source: STK
THE ADVISOR: DONG A SECURITIES CO., LTD
39
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Along with the capacity expansion, sales volume of STK increased rapidly at
CAGR of 22.36% during the 2008 – 2014 period.
In general, STK manufactures unseasonal products. The sales volume and and
revenues are fairly equal over the years due to reasonable allocation of products among
domestic and export markets. This is also an important factor contributing to maximizing
the machine using efficiency and the production capacity.
Export revenues accounted the majority of total sales volume, on average at 71% 87% during the 2010 – 2014 period. The main export markets of the Company are Europe
and Asia countries. Also, the Company sells their products to FDI companies through
"On-land Export" form.
Chart 7 Error! Bookmark not defined.: Sale volume by export and domestic market from
2010 - 2014
Sale Volume
29%
25%
13%
15%
23%
71%
75%
87%
85%
77%
FY2010A FY2011A FY2012A FY2013A FY2014A
Export
Domestic
Source: STK
Focusing on export maket is one of STK‟s business strategies. This strategic
advantage helps the company balance foreign currency source as well as maximize the
production capacity of value-added products with high technical requirements and gross
profit. STK has obtained its competitive advantages in the export markets thanks to the
competitive pricing strategy, stable product quality and modern production capability.
6.4
Raw materials
 Raw materials sources
Currently, about 90% raw materials of STK are imported from major countries
such as South Korea, Taiwan, Japan and Germany. Remaning smaill proportion (mainly
paper tube and carton) were sourced from China and Vietnam.
Table 8Error! Bookmark not defined.: List of some main material suppliers of the
Company
NO
Material
1
2
3
4
Polyester Chip
Supplier
Nation
Kolon Global Corp
Korea
Tainan Spinning Co., Ltd.
Taiwan
Itochu Corporation
Japan
Able Glory Pte Ltd
China
THE ADVISOR: DONG A SECURITIES CO., LTD
40
CENTURY SYNTHETIC FIBER CORPORATION
NO
Material
5
PROSPESTUS
Supplier
Nation
Taiwan
Kyoin Enterprise
6
Oil
7
Matsumoto Yushi-Seiyaku
Japan
Sojitz Corporation
Japan
8
Schill + Seilacher GMBH
9
Xiamen Hengxiangfeng Import & Export
10
Germany
China
Palm Paper Company Limited
Vietnam
11
Sonoco Taiwan Limited
Taiwan
12
Kaoten Packaging Company Limited
Vietnam
Vinh Xuan Packaging Company Limited
Vietnam
Phuong Yen Company Limited
Vietnam
15
Vinh Khang Packaging Company Limited
Vietnam
16
Oerlikon Barmag, Zweigniederlassung Der
Oerlikon Textile Gmbh & Co.
Germany
17
New Taiwan Filters Corp
Taiwan
Li Chen Filter Equipments Enterprise Corp
Taiwan
Paper tube
13
Carton box
14
Other components
18
19
Saurer Components Ag
20
Changzhou Jason Precision Machinery Co., Ltd
Swizerland
China
Source: STK
 The stability of raw material resources
To guarantee the product quality, STK always focused on choosing the reputation
raw material suppliers who meet all STK‟s criteria about quality, price and volume to
guarantee the stability of input raw material. In addition, STK implement well the
planning of materials procurement, ensure enough materials for reserves and production,
control of product costs.
To minimize the risk of unstability and price fluctuations in raw materials affecting
to the company production, STK has actively expanded the supplying sources of raw
materials and not to depend too much on any single supplier. Each main goods, STK
maintained to purchase from at least 03 suppliers. Besides, STK has registered to be a
member of one prestigious international site to update market price regularly, guaranteed
to purchase raw materials with reasonable prices consistent with market prices. This
measure helps the Company to ensure the stability of raw material price in a certain
period of time, minimize the shortcomings in production and business when raw material
prices fluctuate widely.

Impact of raw material price fluctuations on revenues and profits
THE ADVISOR: DONG A SECURITIES CO., LTD
41
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Cost of good sold of the Company accounting for a large proportion (about 8085%) of revenue from sales and service provision, in which main raw material is polyester
chip accounting for about 70% of the COGS. Because the polyester chip is a petroleum
product, the volatility of world oil prices will affect sales and profits of the Company.
However, the Company always maintains a certain gap between the selling price of
products and the purchased price of raw materials. This objective is achieved based on
mechanism of buying materials and selling of the Company, which is the selling price is
always determined based on the price of raw material inventories and goods on road.
Also, thanks to the production of high quality goods and reputation in the market, when
raw material prices fall, STK can still maintain selling discount prices lower than the
discount prices of raw materials.
In fact, in 2014, due to the impact of plummeted oil prices making PTA prices
(petroleum products and is the raw material to produce polyester chip) decreased. PTA
selling price differences of around 150 USD / ton while MEG differences of about $ 100 /
ton at the beginning and the end of December.
Chart 8 Error! Bookmark not defined.: The violation of raw materials PTA and MEG
from 9/2014 to 3/2015
In 2014, the price of PTA and MEG prices declined sharply, respectively 30% and
25%, led to the raw material polyester chip prices fell to 11,1%, much higher than the rate
of decline of the selling fibers price is 4,3%. That led to the STK gross margin this year
increase highly to 14,6% over the same period was 12.2%. Simultaneously, gross profit
reached 212,8 billion respectively, up 20,1% over the same period last year. In the first 6
months of 2015, the average price of polyester chip decreased 19,9% while the average
THE ADVISOR: DONG A SECURITIES CO., LTD
42
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
selling prices just decreased 10,5% compared to the same period in 2014. Thus, the
difference between the fiber selling price and the purchased price of polyester chip in the
first 6 months 2015 improved 2,6% from the same period in 2014.
Chart 9 Error! Bookmark not defined.: The fluctuation of fiber selling price and PET
chip purchased price
Average PET
chip price
6.5
Selling price –
PET chip price
Selling
price
Production cost

Cost structure
Table 9 Error! Bookmark not defined.: COGS, selling expenses and general
administration expenses of the Company from 2013 – 6M2015
Unit:million VND
6M2015
2013
2014
Item
Value
COGS
1.275.819
%/Total
revenue
Value
87,35% 1.244.748
%/Total
revenue
Value
85,23% 514.160
%/Total
revenue
80,50%
Financial expenses
21.066
1,44%
12.542
0,86%
20.407
3,20%
Selling expenses
34.306
2,35%
31.645
2,17%
14.765
2,31%
General
administration
expenses
33.520
2,29%
35.290
2,42%
18.816
2,95%
Other expenses
Total expenses
657
0,04%
97
0,01%
68
0,01%
1.365.368
93,48%
1.324.322
90,68%
568.216
88,96%
( From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK
There are some positive signs about cost fluctuations over time when comparing the
relationship between total costs and net revenue. Percentage of total expense over total
revenue has decreased gradually over the recent years, in detail from 93,48% in 2013 to
THE ADVISOR: DONG A SECURITIES CO., LTD
43
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
90,68% in 2014 and continued to decline to 88,96% in the first 6 months 2015. That
shows the performance of STK is gradually improving by time.
In the cost structure of the Company's operations, cost of goods sold accounted for a
major proportion. Cost of goods sold accounted for 93,44%, 93,99% and 90,49% of the
total costs in 2013, 2014 and the first 6 months of 2015 respectively. The proportion of
cost of goods sold in the total cost structure of STK remained stable over the years and
began a downward trend when stepping through 2015. The proportion of cost of goods
sold over total revenue decreased markedly over the years, from 87,35% in 2013 to
85,23% in 2014 and through the first 6 months of 2015, it dropped to 80,50%. It was
caused by a decline in raw material prices. Besides, the proportion of selling expenses and
administration expenses over the total revenue are maintaining stability over years, ranged
from 2,17% - 2,95%. In general, these costs account for a small proportion of the total
cost structure and relatively stable in the recent period.
Chart 10 Error! Bookmark not defined.: The cost factors in 2013, 2014 and the first 6
months of 2015
1400000,0
1200000,0
1000000,0
800000,0
600000,0
400000,0
200000,0
,0
Giá vốn hàng
COGS
bán
Năm
20132013
Other
Chi
phí bán Chi
phí QLDN Chi phí
khác
Selling
Administration
expense
hàng
expense
expense
Chi
phí tài
Financial
chính
expense
20142014
Năm
66M2015
tháng đầu năm 2015
 Production costs of some enterprises operating in the fiber industry in 2014
According to the 2014 Audited Financial Statements of some companies operating
in the textile sector had listed in the stock exchange, some indicators of the cost of
operations of these companies are as follows:
Bảng 10 Error! Bookmark not defined.: Some operation indicators of some companies of
the industry
Unit: Million VND
TT
Item
Thanh Cong Textile
Garment
Investment Trading
JSC. (TCM)*
Value
1
Total revenue
2.603.811
THE ADVISOR: DONG A SECURITIES CO., LTD
%/Total
revenue
100%
Phong Phu
Corporation*
Value
3.739.158
%/Total
revenue
100%
44
CENTURY SYNTHETIC FIBER CORPORATION
TT
Item
1.1 Net revenue
1.2 Fiancial revenue
1.3 other revenue
2
Total cost
2.1 Cost of good sold
2.2 Selling expense
2.3
General and administration
expense
2.4 Financial expense
2.5 Other expense
PROSPESTUS
Thanh Cong Textile
Garment
Investment Trading
JSC. (TCM)*
Phong Phu
Corporation*
Value
%/Total
revenue
2.580.429
99,10%
3.480.451
93,08%
13.415
0,52%
233.279
6,24%
9.967
0,38%
25.428
0,68%
2.416.091
92,79%
3.631.702
97,13%
2.195.153
84,31%
3.311.579
88,56%
68.630
2,64%
66.349
1,77%
102.168
3,92%
110.593
2,96%
46.669
1,79%
114.208
3,05%
3.471
0,13%
28.973
0,77%
Value
%/Total
revenue
3
Net profit
168.360
6,47%
107.453
2,87%
4
Average owner‟s equity
771.516
29,63%
1.063.362
28,44%
5
ROE
21,82%
10,11%
Source:Audited Financial Statement in 2014 of Thanh Cong Textile Garment Investment Trading
JSC. and Phong Phu Corporation
Note: (*)Data was taken from the Parent Company Financial Statements because the
Consolidated Financial Statements of TMC and Phong Phu including business results of
several subsidiaries operating in other fields such as investment, trade, real estate, etc.
Therefore, the Parent company Financial Statements will accurately express the situation of
the businesses that just have activities in fiber, weaving, dyeing and garment industry.
The proportion of total production costs over the total revenue in 2014 of some
companies in the same industry with STK ranged from 93% - 97%, while the total cost of
STK in 2014 and early 2015 just accounted for only about 89-91% of total revenue. Thus,
in comparison with peers, STK is controlling well their operating costs to bring high
efficiency in production and business processes.
6.6
Production processes of main products
The process of producing main products of the Company are described as follows:
Picture 5 Error! Bookmark not defined.: Production processes of main products
THE ADVISOR: DONG A SECURITIES CO., LTD
45
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Source: STK
Material mainly used in yarn production of the Company is polyester chip. After
06 production stages including Pump chip, crystallizing, drying, Extruder, Spinning,
Winder to create POY; POY yarn continues to be used to produce DTY. Four (04)
transition stages from POY to DTY includes Up rig, Queuing, Production and Quality
control. Then, qualified products will be packaged and warehoused.
With the stratergy of producing high-quality products, STK has established a
quality control system comprehensively in the production processes, from purchasing,
producing to packaging, warehousing products. The company has invested in modern
DTY manufacturing machines imported from Oerlikon Barmag Group with automatic
operation and control systems as well as online quality control.
6.7
Technology level
STK currently owns 02 manufacturing plants, one (01) in Cu Chi district with
16,800 sqm and one (01) in Trang Bang district, Tay Ninh province with 50,000 sqm.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Technology of the Company in Polyester filament industry is at upper intermediate
level. Technology of the Company in Polyester filament industry is at upper intermediate
level. Currently, competitors of the Company are the leading companies in the region
such as Taiwan, South Korea. The high technological level of STK is attributable to:
-
-
Business strategy focuses on developing market segments with high requirement
on product quality, hence, the Company have been invested in technology devices
and management system so that can satisfy advanced technology standard.
Invested technology is new generation and modern. Machinery and equipments are
manufactured by the leading European group namely Oerlikon Barmag with the
latest machine version having wings for POY and EFK for DTY machines; ensure
finished product with high precision and stable quality, ensure high consistency. In
addition, these equipments are energy-saving and environment friendly.
In 2011, to improve transparency and increase efficiency of production and
management, STK has applied ERP system - SAP All In One. Since early 2012, the
Company has successfully put the system into operation.
New project in Trang Bang 3 factory has been applied with the POC system from
the Oerlikon Barmag. This is the world‟s advanced system to enhance production
efficiency and product quality control.
The supplier will periodically visit the Company to give guidance and technical
support. Thanks to that, the Company can master the features, manipulate precisely on the
mechanical system.
In addition, at each plant, the Company has built a laboratory with modern
machinery and equipments in order to control quality of the whole production process.
Table 11 Error! Bookmark not defined.: Some typical equipment of the Company
No
Machinery/
Equipment
Brand
Manufacturer
Origin
Production
Year
1
Producing
POY
- EVO spinning
- Wings winder
Oerlikon Barmag
Germany
2010, 2014
2
Producing
DTY
- EFK
Oerlikon Barmag
Germany
2010, 2014
3
Air
compressor
- TA 3000
Cameron (USA)
America
2010, 2014
4
Air
conditioning
system
- Chiller Carrier
Hong Yan
Engineering
Taiwan
2010, 2014
Source: STK
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Picture 6Error! Bookmark not defined.: Pictures on some machinery and equipments of
the Company
Source: STK
6.8
Research and development of new products
In 2015, the company will research to develop some new product lines as follows:
 Full Dull Yarn: UV resistant fiber, reflectance sunlight, not luminous, not absorb
heat, reduce breaking POY, DTY yarn when production.
Q & A Department and Sales Department will explore the using demand of
customers for this product before implementing production.
 Recycle Yarn: STK is researching to cooperate with foreign suppliers, in which
suppliers will provide chip and technical support for STK to produce Recycle yarn
and then provide back the yarn for those suppliers.
 Flame Retardant Yarn: STK is researching to cooperate with Korean suppliers in
which these suppliers will provide fireproof chip and technical support for STK to
produce the Flame Retardant Yarn and then provide back the yarn for those
suppliers.
6.9
Quality control
The company has the operational processes regarding to sales, production
planning, producing, materials supplying, logistics, quality control, customer service, IT,
administration and human resources that comply with ISO 9001-2008, Kaizen and 5S,
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
ISO 9001-2008 granted by AFNOR. The operating procedures are updated and revised
periodically to improve performance. To ensure strict adherence to procedures, the
Company builds quality control teams and issues attractive remuneration policies based
on production efficiency and employee‟s target completion. Production department is
tested and evaluated monthly in terms of the product quality for reward based on work
performance.
STK commits to provide high quality products and services, proven by developing
the professional operation process, investing in modern machinery and equipments,
developing the network of materials suppliers with good quality, recruiting and
developing skilled human resources and strictly adhering to KAIZEN, 5S and ISO 90012008.
1
Nguyên liệu
Inputs
đầu
vào
3
2
Sản xuất –
Production
hành
- Vận
Operation
Products
Sản
phẩm
1: First, raw material (polyester chip) by order will be thoroughly checked by QC
lab. If qualifed, it will be used for the production.
2: All stages of production are applied with 5S, KEIZEN, ISO 9001: 2008, from
which the product quality is controlled strictly. During the manufacturing process, even
though most of the stages are automatic, controlling the output quality of POY, DTY and
FDY is still very important. POY quality management requires to control denier, evenness
and physical features. DTY quality management requires to control failure rate (machine
stops running) at low level, physical features (clean packaging), even knitting/dyeing
(check all packages) and actual test before packaging. Semi products and finished
products are all labeled in order to easily track to the machine producing error products
and quickly fix that machine. QC Division (quality control) carries out technical checking
at all stages.
3: Products will be double-checked by QC by probability method to evaluate
quality and ensure the quality requirements as ordered.
Picture 7 Error! Bookmark not defined.: Some pictures about checking, controlling
product quality of the Company Equipments to test products before packing
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Checking, controlling in production
Source: STK
 Internal control system
Internal control system of the Company is built based on 5 main components:
 Controlling environment
This is the environment in which the entire operation of internal control is
deployed. Tools are used for the internal control as follows:
STK has issued a written form of rules and standards of advoiding interest
conflicts between management team and employees and the appropriate promulgation
in case any rules, standards are violated. At the same time, the Company popularizes
the rules and standards mentioned above to all staff, requires all employees to sign a
commitment to comply with the rules and standards.
STK has a logical corporate structure to ensure the management (planning,
organizing, staff managing, directing and controlling) carried out accurately, timely and
effectively.
The Company has an internal control division to control the compliance with the
production procedures and awake risks in producing and trading in order to ensure
products quality and efficiency in producing and trading activities.
Besides, the Company also has general regulation documents as well as specific
guidances in the overall management and the funds transfer operations.
 The Company has a unified documents system regulating the recruitment,
training, employee evaluation, salary, bonuses and allowances to encourage
people to work with integrity and efficiency.
 STK has used “Job Description” to define requirements of knowledge and
personnel quality for every position in the Company.
 The Company does not set unrealistic standards or indicator or
unreasonable lists of priorities, incentives, salary, bonus, etc. causing
undisciplined or cheating behaviors. In addition, the Company regularly
THE ADVISOR: DONG A SECURITIES CO., LTD
50
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
rotates staff in sensitive areas; cares, reminds, protects the rights of those
who work in hazardous, heavy-work areas in accordance with regulations.
 Risk evaluating
STK has set out the overall as well as detailed objectives for all employees to use
as a basis of reference when deploying work. On the other hand, the BOD of the
Company has cared and encouraged employees to detect, assess and quantitatively
analyze effects of these existing and potential risks.
The Company has proposed measures, plans and procedures of specific actions to
reduce risks to an acceptable limit. The Company also has taken measures to make all
employees aware of effects of risks as well as minimize risks for the Company.
 Internal control activities
The company has set out financial determining items and basic indicators of
performance evaluation such as managing indicators of planning and controlling to adjust
production in line with the objectives proposed. The Company has regularly recorded,
synthesized producing results; compared the results obtained with the predetermined
items and indicator to correct, replenish timely.
STK has detailed provisions on rights, responsibilities and obligations in three
areas: Licensing and approval of financial problems, Accounting and Warehousing which
are delimited clearly and independently. The Company has issued documents regulating
clearly who has the right and/ or authorizes all or any financial problems. The Company
has kept the evidence in written form to easily demarcate work section with supervision at
any given time, including identifying individuals who are responsible for the mistakes
occurred.
STK also has its own regulations to monitor, protect properties, equipments from
loss, damaging or used for improper purposes.
The Company also prohibits and takes measures to prevent its senior leaders using
funds and assets of the Company for private purposes.
 Information and communication system
STK has regularly updated important information for board of management and
competent persons. Communication system of the Company ensures employees at all
levels can know and understand rules and standards of the organization, information are
provided timely, accurately to the authorities as prescribed. In parallel, STK has also
established hot communication channels (a committee or an individual who is responsible
for receiving information denounced by installing a suggestion box) to allow staff to
report on unusual behaviors, events that may cause damage to the Company. In addition,
the Company also has installed protection systems to prevent data accessing from those
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
not authorized. The Company has built disasters, dangers prevention and information lost
rescue plan by backing up data promptly and safely.
 Controlling and assessing system
This is the process of monitoring and assessing the quality of internal control to
ensure that it is deployed, adjusted and improved continuously.
The Company has a reporting system allowing the detection of deviations from
planned targets. Upon bias detection, the Company has implemented appropriate
corrective measures.
The defects of the internal control system detected by independent auditors will be
report directly and promptly to a higher level manager, even board of management to
correct timely.
The company also has asked intermediate level managers to immediately report to
leaders all cases of fraud, suspected frauds that violate rules and regulations of the
Company as well as provisions of law and are capable of reducing the Company
reputation and causing economic harms.
6.10 Marketing activities
With more than 14 years experiences, products with "Century" brand name have
gained customers‟ trust and belief. Because STK has positioned itself in the medium
and high-end segment, the Company focused on customers requiring high quality
standards and customers that supply their products to international brands. The
Company has appropriate approaches to each kind of customers:
-
Establishing relationships with representative offices of international brands to
learn about the seasonal ordering plans.
-
Developing network of customers in ASEAN and customers exporting their
products to Europe, America and Japan markets.
-
Maintaining existing customer networks, exploiting more customers from
Thailand, Taiwan, South Korea, Turkey, existing FDI and new FDI companies
trending to shift their production from China to Vietnam.
-
Potential and major customers of the company in the future are domestic textile
manufacturers, FDI companies having factory in Vietnam to take advantage of
TPP trend. Besides, STK will also continue to expand and look for customers
which are foreign textile and garment manufacturers.
-
QA and R&D department collaborates with Sales Department to provide beforesales and after-sales services to customers by exchanging information with
customers (fabric producers) to understand final products, specific technologies,
THE ADVISOR: DONG A SECURITIES CO., LTD
52
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
machinery and equipments to consult the customers thoroughly. Then, Production
and Technical Department of the Company will provide appropriate products
based on specific needs of customers.
6.11 Customer network of STK
The Company has over 250 clients usually trading with STK and and currently
meets only 20% customers‟ total demand. The Company‟s customers are mostly foreign
customers. The customers‟s loyalty is at high level, thanks to the Company‟s high and
stable quality products coupled with reasonable selling price and good after-sales service.
In order to diversify its customer base as well as to mitigate concentration risks, STK
proactively reduces the share of Top 10 and 20 customer‟s revenues over the years. Each
customer‟s order is limited up to 10%-20% total production capacity of the Company to
minimize the risk of dependence on a few customers.
Chart 11Error! Bookmark not defined.: Top 10 – 20 clients in Total Revenue
Top 10 - 20 customers in Total Revenue
100%
80%
60%
40%
20%
0%
84%
70%
2010
65%
64%
50%
49%
2011
2012
Top 10
67%
62%
45%
2013
46%
2014
Top 20
Source: STK
Main export markets of the company are Europe and Asia, typically Thailand,
Taiwan, Korea, Japan and Turkey. Export revenue accounted for approximately 71% to
87% of total revenue during the 2010 – 2014 period. Customer network of the Company
includes many worldwide famous brandnames. Before the debt crisis in Europe, due to
high demand from customers as well as the good reputation of STK, the Company
frequently could not meet all of its customers‟ orders. The world economy recovery
along with the increasing demand in Asian countries brings more opportunities for yarn
manufacturers with high quality products. This helps the Company choose good
customers who can cooperate with in the long run as well as satisfy the Company‟s
targeted profit margins. Therefore, targeted customers of the Company are quite
diversified, including large multinational corporations, commercial companies as well as
local medium- scaled companies.
The Company‟s domestic customers are well-known brands include Thanh Cong
Textile Corporation, Thai Tuan Textile and Garment Co., Huge Bamboo, Formosa,
THE ADVISOR: DONG A SECURITIES CO., LTD
53
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Decotex, Daluen, Samil Vina, Samwoon, Global Dyeing, Khang Vietnam, Eclat Fabric,
Sue, Chung Luong, Ly Minh, Hoa Khanh Textile Da Nang, etc. The Company‟s foreign
customers are YRC, Tongsiang, Golden Empire, Huge Rock, Universal, Pinewood, Hiknit, Hansea, Panko, Handoo, Shindo, Hansung, etc. which are supplying input materials
for global famous brands like Nike, Adidas, Uniqlo, Decathlon, Puma, Columbia,Guess,
etc….
Picture 8 Error! Bookmark not defined.:The Company’s customers categorized by
regions
Current customers
Source: STK
The Company has a global customer network in Europe and Asia, typically
Thailand, Taiwan, Korea, Japan and Turkey. The Company has expanded its market and
exported to Indonesia and FDI textile companies that have been shifted their production
into Vietnam to produce fabric.
Thanks to capacity expansion, STK can meet existing and potential customers
needs. However, if Trans-Pacific Partnership Agreement (TPP) is concluded, the market
demand will excess the Company‟s supply capacity.
6.12 Customer services
The Company maintains customer service to ensure customers‟ satisfaction, and
therefore are able to maintain long-term relationships with customers. This helps to bring
continuous orders from existing customers for the Company.
The Company carries out customer services both before and after selling its
products. Before the selling, personnel from Company‟s business division will meet
customer and assesses their needs. Depending on their existing machinery and desired
output, this division will consult customer to choose input materials with appropriate
standard and quality. The company also regularly assesses customer satisfaction by
surveying customers in many other aspects. The customer feedbacks over the past years
show their high satisfaction with the Company.
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Good customer services gives the Company the loyalty from existing customers
who frequently have transactions with STK and at the same time, helps introduce new
customers.
6.13 Labor force
As of 30/04/2015, STK has 839 employees (including staff and trainees). All
positions have their own specific job description. Currently, in 2 factories, the Company
arranges three shifts; each shift lasts 8 hours and 7 days a week. SAP system is also
applied in human resource management for better management of employee evaluation,
qualifications and skills of employees. Appropriate training plans in accordance with
employees‟ orientation and company goals are also applied.
To ensure a highly skilled workforce, especially at the production stage, the
Company sets high requirements in recruitment compared with other domestic companies.
For production staff, at first the Company will arrange for them to learn new job in 2
months. In particular, new employees must experience two weeks learning about the
company's culture, rules, SOPs and 5S and then new staff will get started with actual
shifts, and be evaluated after the training period. If qualified they will sign official labor
contract. At each stage, employees are evaluated in details to determine whether they are
qualified in accordance with the environment and the culture of the Company.
In order to motivate and reward employees correctly, the Company has
implemented a balanced scorecard system in human resource management and evaluation,
To motivate and encourage the production employees, the company set up Standard
Operation Procedures – SOP. If these workers abide fully with the standard operation,
which helps to eliminate error products and improve working performance, they will be
rewarded depending on the results achieved.
HR Policies of the Company are highly appreciated compared to other domestic
companies. Employees are given free accommodation near the working places, get above
average salary, accident insurance, travel benefits, bonuses during the holidays.
In addition, staffs are given regular training programs to enhance the professional
knowledge. Every year experts from Japan are invited to the Company to train the
employees on 5S, KAIZEN.
In addition, the Company also rotates personnel among departments as employees‟
aspiration to enhance their knowledge in various business fields. The skilled and senior
production staff can rotate to the Training division of Human Resources department to
implement culture and skills training for new employees.
Thanks to appropriate personnel policies, the Company has been successful in
building a core management team with mostly young, high qualified, disciplined
managers, consistent with the culture of the Company. Most of the key personnel were
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
trained and worked since the Company„s inception, hence, showing high loyalty and
commitment with the Company. The Company‟s culture can attract and retain qualified
personnel. This core management staff is an important factor for the Company‟s
expansion and long-term development.
6.14 Trademarks, registered patents and copyrights
STK registered the trademark and was granted the Certificate of Trademark
Registration by Vietnam National Office of Intellectual Property valid from 2002 to 2021.
In addition, the Company also registered the trademark and was granted the
Certificate of Trademark Registration valid from 2010 to 2020 by World Intellectual
Property Organization - WIPO.
Trademark logo of STK:
6.15 Unfinished or signed contracts
STK has signed and been implementing some large contracts with domestic and
abroad customers as follows:
Picture 12Error! Bookmark not defined.: Some unfinished or signed large contracts
Unit: billion VND
No
Partner
Prod
uct
Volume
(ton)
Contract Implementation period
value
%
(billion From date
To date Finish
VND)
1
UNIVERSAL
FDY
308,88
9,61
09/01/2015
30/01/2015
100%
2
HUGE ROCK
TEXTILE
FDY
41,68
1,40
10/01/2015
30/01/2015
100%
3
GULCEK
DTY
174,00
6,82
13/01/2015
28/02/2015
100%
4
POPLIN
DTY
43,25
1,87
19/01/2015
20/03/2015
100%
5
GOLDEN
DTY
39,93
1,53
23/01/2015
28/02/2015
100%
6
Y.R.C TEXTILE
DTY
438,35
18,80
26/01/2015
30/03/2015
100%
7
H.B.C
DTY
40,80
1,74
26/01/2015
30/03/2015
100%
8
OKYAY
DTY
60,93
2,60
28/01/2015
30/03/2015
100%
9
YUKSEL
DTY
66,91
2,54
29/01/2015
30/03/2015
100%
THE ADVISOR: DONG A SECURITIES CO., LTD
56
CENTURY SYNTHETIC FIBER CORPORATION
No
Partner
PROSPESTUS
Prod
uct
Volume
(ton)
Contract Implementation period
value
%
(billion From date
To date Finish
VND)
10
ISIKSER
DTY
147,78
6,71
05/02/2015
31/03/2015
100%
11
TONG SIANG
DTY
269,03
10,97
12/02/2015
20/05/2015
100%
12
PAIHO
DTY
44,77
1,50
12/02/2015
31/03/2015
100%
13
BASAK
DTY
128,41
5,63
24/02/2015
24/02/2015
100%
14
AKPA
DTY
104,59
4,10
24/02/2015
09/03/2015
100%
15
DALUEN
FDY
103,14
3,43
25/02/2015
15/05/2015
100%
16
KENAN OZSOT
DTY
50,49
2,00
26/02/2015
31/03/2015
100%
17
KARKENT
DTY
36,69
1,53
26/02/2015
20/05/2015
100%
18
IMC-N
DTY
42,84
1,81
04/03/2015
01/04/2015
100%
19
HAKCAN
DTY
40,80
1,76
06/03/2015
30/04/2015
100%
20
KABAL
DTY
45,02
1,37
17/03/2015
17/03/2015
100%
21
THÀNH CÔNG
DTY
60,03
2,07
25/03/2015
31/05/2015
100%
22
VINATEX
DTY
50,02
1,93
25/03/2015
30/04/2015
100%
23
YILKAR
DTY
61,20
2,56
27/03/2015
22/05/2015
100%
24
KHANG VIỆT
DTY
150,01
6,18
01/04/2015
31/05/2015
100%
25
FUAT
DTY
43,66
1,78
02/04/2015
30/04/2015
100%
26
SARP
DTY
40,80
1,71
02/04/2015
30/05/2015
100%
27
ASLANLAR
DTY
81,82
3,42
07/04/2015
31/05/2015
100%
28
FIBER
DTY
41,04
1,70
07/04/2015
30/05/2015
100%
29
HANSEA
DTY
40,00
1,54
17/04/2015
30/06/2015
100%
30
TREASURE STAR
DTY
190,04
7,62
21/04/2015
30/06/2015
100%
31
COLOR & TOUCH
DTY
62,26
2,39
02/05/2015
15/06/2015
100%
32
TOÀN CẦU
DTY
50,00
2,05
04/05/2015
30/09/2015
56%
33
HARPUT
DTY
235,82
10,28
08/05/2015
30/07/2015
65%
34
UGUR IPLIK
DTY
87,22
3,85
09/05/2015
30/06/2015
77%
35
KOCER
DTY
102,00
4,42
29/05/2015
30/07/2015
100%
36
AKPA
DTY
84,20
3,89
29/05/2015
30/07/2015
100%
37
ECLAT
DTY
130,42
5,66
05/06/2015
20/07/2015
100%
THE ADVISOR: DONG A SECURITIES CO., LTD
57
CENTURY SYNTHETIC FIBER CORPORATION
No
Partner
PROSPESTUS
Prod
uct
Volume
(ton)
Contract Implementation period
value
%
(billion From date
To date Finish
VND)
38
MARSAN
DTY
217,95
9,35
06/06/2015
20/07/2015
100%
39
IKBAL
DTY
39,98
1,98
12/06/2015
30/06/2015
100%
40
ISIKSER
DTY
86,82
3,74
16/06/2015
30/07/2015
100%
41
HUGE-BAMBO
FDY
198,91
6,30
19/06/2015
30/07/2015
100%
42
LIÊN AN
DTY
46,32
1,59
19/06/2015
30/06/2015
92%
43
SAMIL VINA
FDY
92,61
2,89
23/06/2015
30/06/2015
89%
44
FORMOSA TAFFETA
DTY
73,35
2,70
26/06/2015
31/07/2015
100%
45
MIRAE
DTY
28,89
1,76
26/06/2015
30/08/2015
100%
46
HARPUT
DTY
107,71
4,65
27/06/2015
30/07/2015
100%
47
DALUEN
FDY
93,76
3,07
03/07/2015
30/07/2015
100%
48
PHÚC PHÁT LÀO CAI
FDY
75,00
2,46
06/07/2015
15/08/2015
52%
49
GULCEK
DTY
65,12
2,78
10/07/2015
30/07/2015
100%
50
YILMAZ
DTY
62,22
3,02
15/07/2015
20/08/2015
100%
51
Y.R.C TEXTILE
DTY
428,25
19,62
16/07/2015
30/08/2015
84%
52
UNIVERSAL
DTY
200,02
7,15
17/07/2015
30/09/2015
15%
53
SAMIL VINA
DTY
100,01
3,56
30/07/2015
31/08/2015
96%
54
PAIHO
DTY
80,00
2,59
04/08/2015
31/08/2015
84%
55
ECOFIL
DTY
65,08
2,40
13/08/2015
20/09/2015
100%
56
YUKSEL
DTY
68,28
2,55
15/08/2015
31/08/2015
100%
57
COBANLAR
DTY
87,82
3,27
18/08/2015
31/08/2015
100%
58
TONG SIANG
DTY
112,1
4,37
22/08/2015
20/09/2015
0%
59
BIREL
DTY
82,91
3,71
22/08/2015
30/09/2015
0%
60
HAKTIM
DTY
64,87
2,47
22/08/2015
30/09/2015
0%
6.216,81
248,75
TOTAL
Source: STK
THE ADVISOR: DONG A SECURITIES CO., LTD
58
CENTURY SYNTHETIC FIBER CORPORATION
7.
PROSPESTUS
Income Statement in 2013, 2014 and 6M2015
7.1
Summary of some items on income statements of the Company in 2013, 2014
and 6M2015
Table 13Error! Bookmark not defined.: Some income statement items of the Company in
2013, 2014 and 6M2015
Unit: Million VND
Items
Total Assets
2013
2014
% changing
6M 2015
1.025.471
1.244.953
21,40%
1.618.131
Owner Equity
503.063
674.817
34,14%
673.285
Net Revenues
1.453.047
1.457.517
0,31%
630.345
95.425
135.417
41,91%
70.125
-185
747
Earnings Before Tax
95.426
136.164
42,69%
70. 497
Earnings After Tax
74.400
106.107
42,62%
54.585
15%
15%
Net Operating Incomes
Other Incomes
Dividends
Earnings After Tax/
Average Owner Equity
15,30%
18,02%
-
2,71%
372
8,10%
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK
Regarding total assets, at 31/12/2014, the total value of assets of the Company
increased by 219,482 billion compared to 2013, equivalent to an increase of
approximately 21,4%. The reason is that the Company increased long-term debt, mainly
long-term accounts payable to suppliers (increase about 155 billion compared with 2013),
this is the asset value of machinery and equipment STK imported for the expansion of the
factory in Trang Bang Branch - Phase 3 and is sponsored by long-term loans from banks.
Additionally, in 2014 the Company increased its share capital of approximately 107
billion to create funds for the construction of new factory in Trang Bang - Phase 3.
Regarding profit, the profit before tax of the Company in 2014 reached VND
136,164 billion at the end of 2014, up 42,69% over the same period in 2013 and exceeded
14,29% of the planned profit for the year (VND119 billion ). Profit after tax of the
Company accordingly has the same strong growth as profit before tax, increased by
42,62% compared to 2013. Profit after tax increased from the same period last year
mainly due to (1) gross profit margin increased due to the rate of selling prices‟s decline
was lower than the raw material prices, (2) selling expense over revenue downed from
2,4% to 2,2% due to the proportion of exports by CIF method (the seller must arrange
transportation and insurance) decreased leading to the shipping costs and insurance
THE ADVISOR: DONG A SECURITIES CO., LTD
59
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
reduced and (3) the interest expense decreased from 13,9 billion to 7,6 billion thanks to
lower interest rates.
The proportion of profit after tax / average owner‟s equity increased 2,71% in
2014 over the same period. This increase is not as strong as the growth rate of profit after
tax because the Company already issued shares to the public in order to increase the
Chartered capital, leading to the equity in 2014 also increased by 34,14% compare to
2013.
7.2
Factors affecting the Business and Production activities of the Company:
 Favourable factors:
- Abundant and long time commitment customers:
As a reputable and experienced company for many years, the brand name
"Century" has been recognized in textile raw material producing industry, not only in
Vietnam but also in the international market. In Vietnam, STK is a company specializing
in manufacturing and supplying long staple fiber, and is one of two leading companies
(STK and Hung Nghiep and Taiwan Formosa) providing long and high-class fibers. With
modern technologies, high quality and good after sales service, STK‟s products can
satisfy demands of domestic customers including Thanh Cong Textile Garment
Investment Trading JSC, Thai Tuan Textile and Garment Co., Ltd, Huge Bamboo,
Formosa, DECOTEX, Daluen, Samil Vina, Samwoon, Global Dyeing, Khang Viet, Eclat
Fabric, Sue, Chung Luong, Ly Minh, Hoa Khanh Da Nang Textile, etc and foreign
customers like YRC, Tongsiang, Golden Empire, Huge Rock, Universal, Pinewood, Hiknit, Hansea, Panko, Handoo, Shindo, Hansung,... These companies provide materials for
world-famous brands such as Nike, Adidas, Uniqlo, Decathlon, Puma, Columbia, Guess,
etc. Owning a various customer list with long relationships and loyalty means a lot for the
sustainable development of the Company.
- Management team is highly qualified, experienced and having strong attachment
with the Company:
STK has a dynamic management team with high responsibility spirits and strong
attachment with the Company, technical staff also has skilled workers who are highly
qualified and experienced in the industry. Due to being invested with modern machinery
and equipments, scientific management methods, STK‟s plant has effectively increased
productivity and output, lowered product cost and contributed to increase competitiveness
of Company‟s products. At the same time, STK has maintained good relationships with
machinery vendors, helps the Company receive technical supports as well as update latest
advances in the field.
Gradually changing of units management method will contribute to streamline
personnel apparatus, reduce cost, well manage cost, and increase the Company‟s
operational efficiency in the future.
THE ADVISOR: DONG A SECURITIES CO., LTD
60
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
- Shareholders unite, support production and Business activities well:
Shareholders of the Company are domestic and foreign experienced investors, both
individuals and organizations. They contribute helpful opinions in financial aspect as well
as global vision. Therefore, every direction and development strategy of the Company
have always been considered and comprehensively planned.
- Trend of Orders shifting from China to Vietnam
Order shifting wave leads to the increasing mass shifting of fabric manufacturers
(fiber manufacturer's customers) from China to Vietnam due to higher production cost in
China (labor, land renting, environment etc.), inherent risks, and imposing technical
barriers and import tariffs of other countries on manufacturers from China.
- Opportunities from FTA Agreement:
According to FTA between Vietnam and South Korea (“VKFTA”), the import tariff of
fiber from Vietnam to Korea will decline from 8% to 0% as soon as the VKFTA takes
effect at the beginning 2016. This tariff reduction will directly boost the demand for
import of Vietnamese fiber of Korean customers. In addition, VFKTA will cut the import
tariffs of Vietnam‟s garment from 13% to 0%, Which will indirectly promote the
development of textile and increases demand for fiber in Vietnam Market.
Under the FTA between Vietnam and EU (“EVFTA”), (to be signed in 2015), the import
tariffs of clothing product from Vietnam to EU market will be reduced to 0% (from 9.6%)
during 7 years since EVFTA agreement becomes effective. In order to get this tax
preference, garments must be made of fabric produced in Vietnam, Asean, Japan, South
Korea or EU. Therefore, the argreement will be a contributor promoting the development
of the Weaving and Dyeing industry and increase the fiber demand in Vietnamese market.
- Opportunities from TPP Agreement:
TPP agreement is expected to bring great opportunities for the textile industry
including STK to improve the scale, quality and competitiveness in supplying raw textile
materials. With the advantage of being one of few companies in Vietnam satisfying TPP‟s
"Yarn forward rule”, demand for STK‟s yarns is considered to soar when the TPP
agreement is signed.
- Other advantages:
In addition, strong relationships with key raw materials suppliers help the
Company get favorable purchase terms.
Besides, a healthy financial standing is the basis for STK to attract capital
investment to grow stably. With reasonable export revenue structure, STK uses sales
proceeds in USD to fund raw material purchases and to repay USD denominated loans, by
which, the Company creates a natural hedge mechanism for foreign currency risk.
THE ADVISOR: DONG A SECURITIES CO., LTD
61
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Furthermore, based on stable export revenue, STK can access low cost loans dominated in
USD to finance working capital and its construction investments.
 Disadvantages:
In general, the economy is still in a tough period which limits the purchasing
power of the whole economy as well as the domestic and foreign textile industry. Beside
market‟s purchasing power, STK is also influenced by the following factors:
Increasing input costs: input costs such as gas, oil, electricity, wages and
compulsory insurance (social and health insurance) costs have simultaneously
risen, affected significantly the performance of garment enterprises.
- Filaments fiber production requires high technique and stable power. STK asked
the electric power plant Cu Chi and Trang Bang to ensure the supply of electricity
for its stable production.
- When TPP Agreement is signed, there will witness a new wave of foreign as well
as domestic investing in Vietnam soon to take advantage of domestic fabric
shortage, leading to a large demand for yarns in general and the Company‟s yarn
products in particular. However, in the long run, other yarn manufacturers will
invest in Vietnam or expand capacity to catch the needs of yarn shortages.
Note: STK has currently competed globally; while foreign firms in Vietnam would be
more vulnerable than in their domestic market due to language barriers, customer
network. Investing in modern or obsolete machinery and equipments, etc. will affect the
competitiveness on product quality, depreciation, costs, etc.
-
8.
Position of the Company compared with other firms in the same industry
8.1
Position of the Company in the industry
Currently, there are only 5 DTY producers in Vietnam, including:
 STK corporation.
 Formosa Hung Nghiep Co., Ltd.
 Hualon Corporation.
 Dong Tien Hung Company Limited.
 PetroVietnam Petrochemical and Textile Fiber Joint Stock Company (PVTex)
Of which, only STK and Formosa Hung Nghiep Co., Ltd. position themselves and
focus on high quality products.
Founded in 2000 with an initial capacity of 4,800 tons DTY, after 15-year
development, STK has increased capacity to 8 times, up to 37,000 tons DTY/FDY per
year. As a result, the Company‟s business grows rapidly, revenues and net incomes in
2014 was VND1.457billion, VND106,1 billion, respectively.
THE ADVISOR: DONG A SECURITIES CO., LTD
62
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
The Company invested in expanding Trang Bang Branch 3 factorywith a total
investment of USD33.9mn, or VND729bn, to meet market demand on high-class
polyester filaments DTY. In this project, the Company will invest in automatical DTY
spinning machines with the most modern technology provided by Oerlikon Barmag, the
world market leader in development and production of spinning systems and equipment
for manmade fibers. This project is expected to provide 15,000 tons of POY and 15,000
tons of DTY per year for domestic market and exporting, bringing the total capacity of the
Company to more than 52,000 tons of yarn per year. Currently, about 50% of the
expanding capacity already is put into commercial operation from July 2015 and other
50% will continue to be put into operation in Q1/2016.
With the economies of scale advantage, STK is considered to benefit more from
catching the opportunities of shifting fabric production from China to Vietnam as well as
the opportunities from TPP. Along with the purpose of maximizing production capacity,
the USD33.9mn investment in Trang Bang 3 is a preparation in anticipation of the
opportunities mentioned above. The Company also plans to expand to weaving and
dyeing sectors to fulfill the supply chain.
Table 14 Error! Bookmark not defined.: The direct Company’s domestic competitors
Company name
Capacity
Product segment
Business policy
1. STK corporation
Current capacity:
37,000 tons of DTY
& FDY per year
High
quality High quality
product segment
average price
and
2. Hung Nghiep
Formosa Company
Limited
38,400 tons of DTY
& FDY per year
High quality product High quality
segment
high price
and
3. Hualon
Corporation
84,000 tons of DTY
per year
Average
quality
segment
and low Low quality and low
product price
4. Dong Tien Hung
Company Limited
20,400 tons of DTY
per year
Average
quality
segment
and low Low quality and low
product price
5. PetroVietnam
Petrochemical and
Textile Fiber Joint
Stock Company
(PVTex)
144.000 tons (PSF,
POY, DTY) / year.
The capacity of DTY
production is 28.800
tons/year.
N/A
N/A
Market share is calculated based on actual production capacity and export value:
Chart 12: Market share of STK
THE ADVISOR: DONG A SECURITIES CO., LTD
63
CENTURY SYNTHETIC FIBER CORPORATION
Market share on Capacity
Dong
Tien
Hung
9,80%
PVTEX
13,80%
STK
17,70%
PROSPESTUS
Market share on export value
PVTEX
Dong
3,30%
Tien
Hung
10,21%
STK
25,43%
Formosa
18,40%
Hualon
37,24%
Hualon
40,30%
Formosa
23,82%
 The Company’s competitive strategies over its competitors:
- For Formosa Hung Nghiep: The Company applies competitive price and after-sales
service.
- For Hualon and Dong Tien Hung Company: The Company competes based on
product quality and after-sales service.
- For PVTEX, the new factory officially opearated in May 2014, reaching average
capacity of approximately 50% by Q1/2015 and is expected to operate under 100%
capacity by Q2/2015. PVTEX primarily focused on Staple – Polyester Staple Fiber
(PSF), positioning as the low quality segment, therefore PVTEX is not a direct rival
to STK. The company‟s driving forces are quality, price and after-sales service to
compete with PVTEX‟s DTY.
STK has proved its brandname and position as a leading yarn producer, with modern
machinery and technologies; dynamic and experienced management team; skilled workers,
capable technical staff; and effective corporate governance. As a result, the Company's
products can compete with other companies‟ products globally. In addition, the Company
also has the advantage of building brand reputation in the market and has a large network of
high-end customers who are in need of a stable supply of high-quality DTY and FDY. STK
prospect is very promising given its advantages and brandname.
 Compare financial Status and business Activities of enterprises in same industry
The direct competitors of STK are not currently listed, thereby having insufficient
information for comparison, therefore, listed companies in textile, garment sectors or similar
business are selected to compare STK‟s financial status and business activities. Particularly:
Table 15 Error! Bookmark not defined.: Criteria of companies in fiber, weave and clothing
industry in 2014
Unit: VND
Criteria
Chartered capital
STK
423.053.360.000
TCM
491.999.510.000
THE ADVISOR: DONG A SECURITIES CO., LTD
Phong Phu
733.505.810.000
64
CENTURY SYNTHETIC FIBER CORPORATION
Criteria
Total Assets
Equity
Revenue
Profit from Operating
Other income
Earning before tax
Earning after tax
Dividend payout ratio
PROSPESTUS
STK
1.244.952.643.195
674.817.311.072
1.457.517.160.473
135.416.787.278
747.454.487
136.164.241.765
106.106.992.222
15%/VĐL
EPS
ROE Average
2.725
18,02%
TCM
2.021.424.582.480
776.694.490.697
2.541.985.434.265
173.745.881.089
6.686.049.852
180.431.930.941
167.191.096.711
6%/ VĐL (tạm ứng
năm 2014)
3.405
22,54%
Phong Phu
3.991.776.749.421
1.169.178.390.161
3.480.451.310.249
110.999.143.349
(3.545.611.550)
107.453.531.799
107.453.531.799
15%/ VĐL
1.465
10,11%
Source: Annual General meeting and Audited 2014 financial statement of TCM, Phong Phu
and STK
8.2
The industry’s development prospect
 8.2.1. Textile and garment industry overview
 The value chain in the textile and garment industry
Picture 9Error! Bookmark not defined.: The value chain in the textile and garment industry
Material
-Natural
(cotton, silk)
- Synthetic
products
Fiber
- Short staple
fiber
- Long staple
fiber
-Large material
areas and
suitable
climate for
cotton plant
- Capitalintensive
Fabric
- Weaving &
Knitting
- Dyeing
- Capitalintensive
-In developed -In developing
and developing and emerging
countries
countries
Garment
- CMT
- OEM
- ODM
- OBM
- Laborintensive
-In emerging
countries
-Capitalintensive
(petrochemical
products)
Distribution
-Wholesalers
- Retailers
- Supply chain
management
(short transport
time and low
inventory
management)
Consumer
- Frequently
changing
fashion trends
- Pricesensitive
Definitions:
THE ADVISOR: DONG A SECURITIES CO., LTD
65
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
CMT (Cut – Make – Trim): Processing export goods
− OEM (Original Equiment Manufacturing): Manufacturing under package contracts
− OBM (Original Brandname Manufacturing): Manufacturing under own brand
− ODM (Original Design Manufacturing): Designing and producing for major brands in
the industry.
−
 Global textile and garment industry
In 2013, total global textile and garment revenue reached USD766.2bn, rose 8,4%
compared to 2012 and achieved an average growth rate at 4,71% during the period from 2006
to 2013. China was the world largest textile and garment exporting country with total revenue
of USD316,6bn (2013), rose 9,9% compared to 2012 and made up 41% in the global sales.
China‟s neighbor country, India ranked No. 3, with an increase of 23% over 2012 – the
highest growth rate in the textile and garment exporting countries with a turnover of
USD35,8bn (2013). The others in Top 5 were from European countries namely Italy,
Germany and Turkey with USD37,2bn, USD35,8bn and USD27,6bn export value,
respectively.
Picture 10 Error! Bookmark not defined.: Major textile exporting – importing countries on
the world
Cáccountries
nước xuất
nhập export-import
khẩu chính
Main
of –textile
Khối
SNG
SNG
North
Bắc
Mỹ
America
EU-27
Japan
Nhật
China
Trung
Trung
Mỹ
Central
America
Nam
South
Asia
Á
Quốc
ASEAN
Australia
Úc
Export
Xuất
khẩu
Import
Nhập
khẩu
Table 16Error! Bookmark not defined.: The world textile and garment revenue
Revenue (USDbn)
FY2011A
FY2017E
FY2020E
FY2030E
617
800
943
1,664
Source: Malcolm Newbery (Just Style 2011)
According to Malcolm Newbery (Just
Style, 2011), the world's textile and garment
industry was expected to grow in revenue
during the period from 2011 to 2030,
reaching 1,664bn USD, an annual growth
rate of 5.4% per year. This will be the key
THE ADVISOR: DONG A SECURITIES CO., LTD
66
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
growth driver of T&G industry in general
and the fiber subsector in particular.
destinations for manufacturers in the textile
and garment industry.
Picture 11 Error! Bookmark not defined.:
The textile and garment shift from China to
Southeast Asia
Although China remains the largest
player in term of market share and export
value for many years, it is gradually losing
advantages due to increasing labor costs,
one-child policy reduced the amount of
common labor and some manufacturers are
applying the strategy "China + 1" to diverse
suppliers and reduce excessive dependence
on China. Some emerging countries with
young, abundant and low-cost labor force
and encouragement from the government
such as India, Bangladesh, Vietnam,
Indonesia, Cambodia, etc. are now attractive
In major textile and garment importers such as USA, EU and Japan, China's
market share has continued to decline in recent years. Meanwhile, emerging countries that
have advantages in textile and garment industry gradually occupy China‟s market share.
Table 17Error! Bookmark not defined.: Vietnam and China market share in some main
markets
Export
USA
Vietnam
2013
4 months 2014
8.38%
9.37%
39.79%
China
4 months 2014
34.93%
EU
Japan
2.72%
6.74%
39.91%
71.08%
34.36%
66.55%
Import
2.70%
7.62%
2013
Source: UAS Ministry of Commerce, Eurostat, Vitas
Chart 13Error! Bookmark not defined.: Avarage wage of some countries
* Total payment includes
basic salary, allowances,
social
insurance
costs,
overtime pay and bonuses
THE ADVISOR: DONG A SECURITIES CO., LTD
67
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Lương
cơ bản
Base Salary
Basic
salary
Bangladesh, 112
Cam pu chia, 147
Việt Nam, 250
Ấn Độ, 269
Cam pu chia, 101
Việt Nam, 162
Bangladesh, 86
-
Ấn Độ, 217
100
Philippines, 248
200
Indonesia, 234
300
Thái Lan, 366
400
Philippines, 327
xuất
Thái Lan, 578
dịch chuyển sản
giữa các quốc gia
Trung Quốc, 375
USD/month
USD/tháng
500
Clearly,
the wage
gap leads
to về
a
Rõ ràng,
khoảng
cách
tiền lương
dẫn đến
sự
production
shift among
countries
Trung Quốc, 625
600
Indonesia, 346
* tổng số chi trả bao
gồm lương cơ bản, phụ
cấp,
bảo
hiểm
xã
hội, làm thêm giờ và
tiền thưởng.
700
TổngTotal
chi
phí
1 lao
động *
costs
of one
Total
Paycho
Burden
*labor
Nguồn: Khảo sát các doanh nghiệp liên doanh Nhật Bản ở châu Á và châu Đại Dương.
Source:
Survey
ofJETRO.
Japanese joint ventures in Asia and Oceania. December 2013 JETRO
Tháng
12 năm
2013
 Vietnam Textile and Garment (T&G) industry

Vietnam is now in Top 5 T&G exporter
The T&G industry has grown impressively during the last 20 years with an
average annual growth rate of 15% and become the leading industry in the economy, with
export turnover contributing 10% - 15% to total GDP. The Vietnam‟s textile and garment
industry is expected to continue to grow to around 13% in 2015. Vietnam is now one of
the 5 leading T&G exporters in the world accounts for 4% - 5% market share. However,
currently the Vietnam T&G industry has only participated in the 3rd part of the global
T&G supply chain which is Cutting and Sewing.
Table 18: The World Top Ten T&G exporters
Unit: USDbn
2005
2012
2013
China
156.3
China
288.2
China
316.6
Italia
33.5
Italia
35.3
Italia
37.2
Germany
26.0
Germany
32.0
India
35.8
Turkey
18.9
India
29.1
Germany
33.3
United
Turkey
Turkey
States
17.4
25.3
27.6
India
17.1
Bangladesh
21.4
Bangladesh
25.4
France
15.5
United States
19.1
Vietnam
22.0
Belgium
14.2
United States
19.8
Vietnam
18.3
Korea
13.0
France
15.7
France
16.5
Korea
Pakistan
10.7
13.9
Belgium
14.7
Source: WTO
 Bottleneck at dyeing in the domestic T&G supply chain.
According to Vitas, Vietnam T&G industry currently has 5,982 companies. Along
those companies, garment companies accounted for a large proportion (70%), followed
by spinning (6%), dyeing (4%) and supporting (3%). Besides, the T&G industry is still
dependent on imported raw materials (about 70%), mainly from the China, Taiwan, South
THE ADVISOR: DONG A SECURITIES CO., LTD
68
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Korea. Local supply for yarn and fabric are not sufficient for export and local
consumption because of the bottleneck in dyeing. Currently, Vietnam still has to import 6
billion sqm of fabric. To meet the garment‟s fabric demand, domestic yarn producers
need to increase production capacity to provide more 600,000 tons of yarn for producing
finished fabrics.
Picture 12: Bottleneck in Vietnam T&G industry
Short staple fiber: 96
Sợi ngắn: 96 DN
companies
Sợi dài:
5 5DN
Long staple
fiber:
companies
Kéo sợi
Spinning
Dệt
Weaving
27%
Nhuộm
Dyeing
May mặc
Garment
số công ty
70%
Thắt nút
cổ chai
Bottleneck
Source: Vitas, 2012
 FTAs bring more opportunities for Vietnam's T&G industry.
Picture 13: Vietnam's T&G export value grows gradually with the increase of the free
trade agreements
Source: Vitas
A number of FTAs, typically Free Trade Agreement with Japan (signed in 2009),
with Korea (signed in 2015) and the Trans-Pacific Strategic Economic Partnership
Agreement (TPP) and the Free Trade Agreement with Europe (will be signed in 2015) are
expected to bring tremendous push for Vietnam T&G industry.
Table 19: Vietnam T&G industry’s market share and proportion of import in the US and EU27
Total import
2013
Marketshare
of Vietnam
(USDbn)
The US
112
9
EU - 27
103
2.8
Market
Vietnam
proportion
(%)
Vietnam
market
share‟s
growth
Current tax
rate
Tax rate
after FTA is
concluded
Estimated
year of FTA
concluded
8.83%
5% - 25%
Average 17%
0%
15%
2014
2.72%
9,6% - 11%
0%
20%
End of 2014
Source: Statistics General Office, AmCham, Project of Trade Policy and Investment Support
of the European Union (EU-MUTRAP), DAS collected
Vietnam T&G industry is forecasted to develop at a rapid pace in the upcoming
years. Vietnam government had set a target for the T&G industry in 2017-2020, which
will rank in the world Top 2 or Top 3 T&G exporter. And most recently, in the Vietnam
THE ADVISOR: DONG A SECURITIES CO., LTD
69
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
T&G industry development planning to 2020, vision to 2030 approved by the Ministry of
Industry and Trade on April 2014, the industry export growth and domestic market
growth targets reach 10% - 12% per year.
Dự báo kim ngạch xuất khẩu của ngành Dệt may
Chart 14: Forecast of
Vietnam
T&G
turnover (2014-2020)
Việt
Nam (2013
- 2020)
2020
40.9
2019
37.4
2018
34.1
2017
30.6
2016
CAGR
11,5%
26.9
2015
25.9
2014
21.4
0
10
20
30
40
50
Source: Vinatex
This is also a prerequisite for enterperises to invest in expanding production in
Vietnam textile industry to seize the opportunity from upcoming important free trade
agreements and increasing demand from domestic market.
Table 20: Number of new investment projects in Vietnam T&G industry
Time
Project
Company
Partner
Industry
Investment
value
(USDnm)
Location
2013
Crystal Pacific
Yarn- FabricGarment
525
Lai Vu
Hai
Phong,
Industria
l Park
2014
TAL
(HongKong)
Yarn- FabricGarment
600
Hai
Duong
Yulun (China)
Yarn- FabricGarment
68
Nam
Dinh
Weaving&
Dyeing
120
Binh
Duong
50
HCMC
140
Tay
Ninh
2014
Jiangsu
Yulun
Textile
Group
2014
Haputex
Nam Phuong Development
Textile Ltd.
Ltd.
(HongKong)
2014
Forever
Glorious
2014
Gain Lucky Shengzhou
Limited
International
Viet Huong
JSC
Sheico (Taiwan|)
THE ADVISOR: DONG A SECURITIES CO., LTD
Fabric
–
Garment
project
producing
water-sport
clothes
Weaving
projects
(55.000 tons in
stage 1 and
70
CENTURY SYNTHETIC FIBER CORPORATION
Time
Project
Company
PROSPESTUS
Partner
Investment
value
(USDnm)
Industry
Location
27.500 tons in
stage 2)
2015
TNHH
Worldon
(Vietnam)
2015
Gain Lucky
Limited (British
Virgin Island), a
subsidiary of
Shengzhou
International
Dong
Nam
Increasing
High quality
Industria
to 300
Garment
l Park,
from 140
Cu Chi,
HCM
Nobland
International
Inc. (Korea)
Garmen
20142015
Regina
Miracle
International
Vietnam
Garment
(Female
Undewear)
20142015
Delta Galil Delta Galil
Industries
Industries
(Isarel)
(Isarel)
Weaving
Dyeing
Increasing Tan Thoi
to 61 from Hiep,
43
HCMC
and
90
Hai
Phong
13
Phu Cat,
Binh
Dinh
Source: General Statistics Office
 Spinning subsector
Spinning is the first stage in the textile value chain and keeps a critical role in
providing inputs for remaining stages, including weaving - dyeing, cutting and sewing.
Until 2012, Vietnam has about 5.1 million spindles, accounts for approximately 2.04% of
global total spindles, producing 720,000 tons of fiber and yarn, of which 470,000 tons
were exported.
On the World, Fiber is classified into two types including natural fibers (about
33% of total demand) and manmade fibers (about 67% total fiber demand, of which
polyester fibers accounts for about 73% total manmade fiber demand). Compared to the
other kinds of fiber, polyester filament fiber achieved the highest growth rate at 8,6% in
the period 2005-2013, higher than the industry average growth at 2,9%, the polyester
staple at 3.7% và and the cotton at negative 0,75%. The Polyester filament fiber
accounted for 32,8% of global fiber demand. Of which, long staple polyester fibers
(polyester filament fiber) production fibers in the world 1 reached 29.6 million tons in
THE ADVISOR: DONG A SECURITIES CO., LTD
71
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
20134 and is expected to continue to grow faster than other kinds of fibers thanks to its
competitive price.
Vietnam fiber industry will take preferential tariffs benefit when exporting to
foreign markets under EPA ( Vietnam- Japan FTA), EVFTA (Vietnam EU FTA),
VKFTA (Vietnam Korea FTA) and TPP. In detail, Vietnam fiber, fabric and garment
products selling to EU will all enjoy 0% import tariff, down from 3,2%, 6,4% and 9,6%
respectively. For the US market, import tariff could be reduced to 0% from the current of
17,5% if TPP is concluded.. Moreover, according to VKFTA which was already signed
on 5 May, 2015, the current import tariff imposed on Vietnam fiber and garment
respectively 8% and 13% will be reduced to 0%.
In addition, Vietnam T&G is expected to grow rapidly in order to satisfy the
serious lack of raw material supply. (Currently, Vietnam only produces 0,9 billion meters
of fabric while total domestic fabric demand is 6.8 billion meters). The development of
weaving and dyeing subsectors will pave the wave for using fibers made in Vietnam in
order to enjoy preferential import tariffs imposed by EU, Japan (if fabric forward rule
requirement is met) and US ( if yarn forward rule requirement is met).
Import tariffs of fiber:
Table 21Error! Bookmark not defined.: Import rate of fiber in some countries
Item
Mặt
hàng
HS Chapter/
HS
Chapter/
HS
Chapter/
Subheading
Subheading
Silk
5003-5006
Cotton
5306-5308
Synthetic
5401-5406/5501Sợi nhân tạo
fiber
5511
US
US
EU
EU
0-2.5
0
0-13.2
0-5
4-5
3.8-5
Thổ Nhĩ
Trung
Japan
China
IndiaẤnIndonesia
Malaysia
Vietnam
Nhật Turkey Taiwan
Đài Loan
Độ Indonesia
Malaysia
Việt Nam
0-6.9
3-5.6
0-6.6
Kỳ
0-5
4-5
3.8 - 5
2.5 - 10
4
1.5 - 4
Quốc
6-9
5-6
2-5
10-15
10
5 - 10
5
5
0-5
0
10 - 15
0 - 30
5 - 10
5
0-5
Source: The United States International Trade Commission (USITC); Office of Textiles and
Apparel (OTEXA); World Trade Organization (WTO)
The strong growth prospects of the T&G industry, the demand - supply gap of
materials in the textile subsector, and the advantages from the TPP Agreement are
expected to bring tremendous opportunities for Vietnam T&G industry in general and
STK in particular.
8.3
Evaluating the compatibility of Company's development strategy with
industry’s, state’s policy and the general trend in the world
About the Company‟s capability, it has delicated, experienced and visionary
management team, modern factories with state-of-the-art equipment supplied by European
reputation supplier, good product quality to compete with products of other leading
companies in Vietnam as well as in the world. STK also has a flexible production of high
4
Source: "The Fiber Year 2014 - World Survey on Textile & Nonwoven" is published by Oerlikon on
14/05/2014
THE ADVISOR: DONG A SECURITIES CO., LTD
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CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
quality outputs which meets international standards and ensure good and stable quality
products. The company‟s export revenue accounts for 80% total revenue due to higher
demand from foreign countries than Vietnam. In fact, the domestic supply of fiber does
not enough to meet the demand, so STK has not faced fierce competition. Especially in
polyester filament yarn, there are not many companies can meet the standards in
technology, product quality and management to be able to produce this kind of product.
STK has not faced direct competition from Chinese companies as China fibers are mostly
of low quality while STK‟s products are positioned as the high quality segment. So this is
also a huge competitive advantage of STK.
In the near future, there will be a dramatic increase in high quality fiber demand
when the FDI companies shift their production into Vietnam. Therefore, STK is expected
to expand their domestic market share.
Besides, the Company intends to expand business activities along the supply chain
of T&G industry in both upstream and downstream, in particular it will expand operations
in weaving - dyeing (in Q22015, STK invested in Unitex and collaborate to build
Polyester Chips manufacturing plant to produce raw materials feeding to the existing
production lines, effectively to eliminate the need for external suppliers and avoid any
unnecessary mark-up (if have suitable partner). With existing advantages and business
expanding strategy, STK is expected to exploit its advantages to catch the developing
trend in both Vietnam and global T&G industry.
9.
Employee policy
9.1
STK’s human resource
As of 30/04/2015, STK employs 839 staff across the two factories with the labor
structure as following:
Table 22 Error! Bookmark not defined.: Employee structure by the Company
qualifications
Indicator
Number of employees
Percentage
(%)
Direct labor
654
77,95
Indirect labor
185
22,05
University and higher
60
7,15
College and Vocational School
194
23,12
Unskilled workers
585
69,73
By the nature of labor
By qualification
By contract term
THE ADVISOR: DONG A SECURITIES CO., LTD
73
CENTURY SYNTHETIC FIBER CORPORATION
Indicator
PROSPESTUS
Number of employees
Percentage
(%)
Indefinite contract
299
35,64
Definite contract
355
42,3
Being trained, evaluation of
contract signing
185
22,05
Source: STK
9.2
Working regulation and remuneration, allowances policies for employee
 Working regulation:
The Company applies 08 working hours/day and 48 working hours/week policy;
indirect employees work by office hours, direct employees work by work-shifts.

Wage policy:
Salary scheme and minimum wages applied in the Company comply with the
Government regulations. The Company‟s policy registered and approved by Labor
Administration Authority. Employee‟s basic salary depends on corresponding skills and
qualifications and employees will be arranged in accordance with STK‟s requirements.
Employees are paid accordingly to the quantity and quality of actual completed work.
Salary funds are distributed directly to employees, not used for other purposes. In
case of employees work overtime or night shift, the Company pays overtime work in
accordance with the regulation of the Labor Code was enacted.

Reward Policy:
Employees are rewarded based on job performance, productivity and compliance
with manufacturing process and the Company‟s internal rules. In addition, to encourage
employees‟ effort and completing targets, based on business performance, each year the
Board decide a Welfare Funds for employees.

Company’s Welfare:
Besides the salary policy, the Company also build different beninfits for
employees through collaborating with Labor Union to provide accommodation for
employees. In addition, employees are offered a free and quality meal on shift at
cafeteria. When employees have accident or are hospitalized due to illness, they will be
subsidized by each specific case. Company‟s collective labor agreement was made and
registered with the Labor Administration Authority in accordance with law. The
Company fully implements compulsory insurance schemes (social insurance and health
insurance) for its employees on a timely basis to the Vietnam Social Security of Ho Chi
Minh city.
THE ADVISOR: DONG A SECURITIES CO., LTD
74
CENTURY SYNTHETIC FIBER CORPORATION

PROSPESTUS
Training Policy:
The Company pays properly attention to training programs aiming to enrich skills
for staff and workers. In particular, the Company has established a training team to
conduct training for workers in production units to ensure proper operation of 5S and
KAIZEN processes (Internal governance and management of production and business
activities process) of the Company. The Company carries out the training programs for
officers and employees in accordance with each departments‟ function and Company‟s
strategy, and satisfy employees‟ needs and personal development. All training costs will
be covered by the Company.
10. Dividend policy
In fiscal year 2012, the Company paid cash dividends to existing shareholders at a
rate of 15% of par value. In fiscal year 2013, the Company paid dividends in shares to
existing shareholders at a rate of 15% of chartered capital. In fiscal year 2014, the
Company paid dividends by cash at a rate of 15% of chartered capital and issued stock for
current shareholders to raise equity from equity capital at the rate of 10% of chartered
capital. History of dividend payments of the Company's from FY2009 to FY2014 and
expected dividend in FY2015 as follows:
Table 23 Error! Bookmark not defined.: History of dividend payments from 2009 to 2014
and dividend plan in 2015 (expected)
Payment method
FY2009A
1. Cash dividend
VND
1.200
2. Stock dividend
-
FY2010
A
FY2011
A
FY2012A
FY2013
A
VND
1.500
15%
20%
3. Stock compensation /
Stock issuance to raise
10%
chartered capital from
equity capital
FY2014A
VND
1.500
At least
15%/
Par
value.*
15%
15%
FY2015E
10%
10%
Source: STK
(*):The company targets to pay at least 15% dividend (based on par value) and could
pay more stock dividend depending on its annual business performance. Dividend payment is
based on the principle that the company prefer retaining earnings for reinvestment.
Therefore,the mixture of cash and stock dividend will depends on the company’s cashflow
and annual investment plan. The 2015 dividend payment will be considered and approved at
2016 AGM.
THE ADVISOR: DONG A SECURITIES CO., LTD
75
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
11. Historical financials activities
11.1 Basic of preparation of historical financial statements
The Company's fiscal year begins on 01 January and ends on 31 December of
respective year. The financial statements of the Company presented in VND, was
prepared and presented in accordance with the Vietnamese Accounting Standards issued
by the Ministry of Finance, and are audited annually.
As stipulated in Circular No. 75/2015 / TT-BTC dated 18/05/2015 on amending
and supplementing Article 128 of Circular No. 200/2014 / TT-BTC dated 22/12/2014
guiding the corporate accounting principle, Century Synthefic Fiber JSC‟s financial
statements of Q1, Q2, Q3, Q4 and semi-annual financial statements in 2015 will comply
with Decision No. 15/2006 / QD-BTC dated 20 / 03/2006 and Circular No. 244/2009 /
TT-BTC dated 31/12/2009. For the financial statements onwards, Century Synthetic Fiber
Corporation will comply with the Circular No. 200/2014 / TT-BTC dated 22/12/2014.

Report of the chartered capital and operational capital
Table 24Error! Bookmark not defined.: Status of authorized capital and operational
capital of the Company
Unit: VND
31/12/2013
31/12/2014
Owner’s equity
503.063.414.380
674.817.311.072
+ Owner‟s investment capital
315.425.840.000
423.053.360.000
+ Equity premium
-
40.026.904.470
+ Treasury shares
(11.826.900.000)
(11.826.900.000)
-
-
1.219.011.000
1.219.011.000
+ Retained earning
198.245.463.380
222.344.935.602
Liabilities
522.407.728.355
570.135.332.123
+ Short-term liabilities
306.047.497.556
207.533.888.644
+ Long-term liabilities
216.360.230.799
362.601.443.479
1.025.471.142.735
1.244.952.643.195
Item
+ Investment and development fund
+ Financial reserve fund
Total operational capital
Source: FY2013A, FY2014A Audited Financial Statement

The utilization of operational capital:
THE ADVISOR: DONG A SECURITIES CO., LTD
76
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Short-term debts of the Company are primarily used to finance working capital.
Long-term debts and the Company's chartered capital are used to invest in long-term
assets, including investment in imported machinery and equipments (Used in Phase 2 of
the project) which are accounted for a large proportion.

Depreciation of fixed assets
The Company applies straight-line depreciation method at Point a, Clause 2,
Article 13 of Circular 45/2013 / TT-BTC dated 04/25/2013 of the Ministry of Finance.
Quoted as follows:
“Pursuant to the ability to satisfy the applicable conditions specified for each
method depreciation, businesses are allowed to choose the suitable method depreciation
method for each type of its fixed assets:
Straight-line depreciation method brings the annually stable cost of production.
Enterprises operating with high economic efficiency can choose accelerated depreciation
method, but not exceed 2 times the level of depreciation based on straight-line basis for
rapid technological innovation. For accelerated depreciation method, fixed assets
involved in business activities includes machinery and equipment; measuring and
laboratory instruments, motor vehicle; management tools; livestock, perennial gardens.
When applying the accelerated depreciation method, enterprises must ensure profitable
business. Where enterprises accelerated depreciation exceeds 2 times the levels specified
in the Time frame mentioned in Appendix 1 of this Circular, the part of the accelerated
depreciation in excess (more than 2 times) are not included in reasonable expenses when
calculating income tax in the period.”
Depreciation of tangible assets, financial leasing assets and amortization of
Intangible fixed assets by the Company are consistent with the provisions criticized by
the Ministry of Finance, according to the straight-line method over the estimated useful
Time of the asset as follows:
Assets
Buiding and Structures
Machineryand Equipment
Motor vehicle
Office equipment
Computer software

Time
04 – 25 years
02 – 15years
04 – 10 years
03 – 05 years
04 – 05 years
Average income of employees:
Table 25Error! Bookmark not defined.: Average income of the Company’s employees
Unit: VND/person/month
Year
2012
THE ADVISOR: DONG A SECURITIES CO., LTD
2013
2014
77
CENTURY SYNTHETIC FIBER CORPORATION
Year
Average Salary
PROSPESTUS
2012
2013
2014
VND 6.049.000
VND 6.461.000
VND 6.669.000
Source: STK
The Company‟s employees‟ average income is relatively high compared to
companies operating in the same industry in Ho Chi Minh City.
Table 26Error! Bookmark not defined.: Labor average income of certain Vietnam T&G
companies on 2014
Chỉ tiêu
TCM
Phong Phú
Labor cost per employee 2014 (mnVND)
382.989
N/A
No of employees 2014 (people)
4.514
5.880
Income per employees 2014 (1.000 VND/employee/
month)
7.070
5.300
Source: TCM and Phong Phu Financial Statement and Annual Report 2014

Payment of due date debts
The Company's debts were fully paid. Currently, the Company does not have any
overdue debts.

Statutory payables
The Company always pays tax obligations and other payables fully and timely in
accordance with Government‟s regulation. Specifically, the company strictly implement
the tax payment including VAT, corporate income tax, personal income tax and other
amounts payable to the State.
Table 27Error! Bookmark not defined.: Payables to the State
Tax and payables to the
State
Corporate income tax
2013
2014
9.372.343.472
5.294.170.014
3.500.125.020
2.529.151.028
160.358.850
117.671.051
VAT
47.518.956
-
Others
22.010.340
13.305.600
13.102.356.638
7.954.297.693
Import Export tax
Personal Income tax
Total
Source: STK’s audited financial statements 2013, 2014

Appropriation of statutory funds
THE ADVISOR: DONG A SECURITIES CO., LTD
78
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
According to the Enterprise Law, appropriation and use of funds are decided
annually by the Company's Annual General Meeting. The Company sets aside funds
under the regulation of the Company‟s Charter and in accordance with current legislation.

Balance of Company’s funds
Bảng 28Error! Bookmark not defined.: Balance of Company’s funds over the years
Unit: VND
Items
31/12/2013
31/12/2014
30/06/2015
Financial reserve fund
1.219.011.000
1.219.011.000
1.219.011.000
Bonus and welfare fund
2.668.669.922
1.921.391.255
2.552.579.855
(Audited Financial Statements of 2013, 2014, Reviewd Financial Statements in 6M 2015)
Source: STK

Current liabilities
o Receivables
Table 29 Error! Bookmark not defined.: The Company's receivable
Unit: VND
Items
Short-term receivables
31/12/2013
31/12/2014
30/06/2015
102.610.110.331
111.723.137.946
73.450.072.603
94.102.791.586
49.526.060.005
62.369.296.255
Advances to suppliers
6.497.190.493
60.711.348.389
10.447.142.639
Other receivables
2.010.128.252
1.485.729.552
633.633.709
Long-term receivables
500.000.000
-
-
Other long-term receivables
500.000.000
-
-
103.110.110.331
111.723.137.946
73.450.072.603
Receivables from customers
Total
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Nguồn: STK
o Payables
Table 30 Error! Bookmark not defined.: The Company's payables
Unit: thousand VND
Items
Short-term payables
Short-term borrowings and
liabilities
Accounts payables
Advances from customers
31/12/2013
31/12/2014
30/06/2015
306.047.497.556
207.533.888.644
285.501.374.674
71.091.246.144
25.927.315.002
95.814.061.777
202.035.732.451
143.401.284.862
143.098.715.619
5.310.643.377
6.993.191.400
11.251.715.531
THE ADVISOR: DONG A SECURITIES CO., LTD
79
CENTURY SYNTHETIC FIBER CORPORATION
Items
Taxes and payables to the State
budget
Payables to employees
PROSPESTUS
31/12/2013
31/12/2014
30/06/2015
13.102.356.638
7.954.297.693
14.127.420.371
4.414.071.427
10.845.779.461
7.734.124.683
Payables expenses
4.966.056.295
7.013.230.059
8.149.984.136
Other current payables
2.458.721.302
3.477.398.912
2.772.772.702
-
-
-
2.668.669.922
1.921.391.255
2.552.579.855
216.360.230.799
362.601.443.479
659.345.135.840
155.183.680.160
-
216.006.903.840
207.105.841.360
658.976.683.090
353.326.959
311.921.959
368.452.750
522.407.728.355
570.135.332.123
944.846.510.514
Defered Reveneus
Bonus and welfare fund
Long-term payables
Long term payables
Long-term loans and liabilities
Other long-term payables
Total
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK

Total outstanding loans
Bảng 31 Error! Bookmark not defined.: The Company’s Total outstanding debts
Unit: thousand VND
Outstanding
loans to
31/12/2013
Outstanding
loans to
31/12/2014
Outstanding
loans to
30/06/2015
Short-term borrowingsv
41.634.451
25.927.315
87.403.737
1
VietinBank
27.241.620
25.927.315
42.177.037
2
China Trust Commercial Bank
14.392.831
-
45.226.700
II
Long term loans due to date
29.456.795
-
8.410.325
1
Sacombank Finance Leasing
Company
16.828.884
-
2
Vietnam Export Import
Commercial Joint - Stock Bank
12.627.911
-
3
DongA Joint Stock Commercial
Bank
TT
Items
I
THE ADVISOR: DONG A SECURITIES CO., LTD
-
8.410.325
80
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
TT
Items
Outstanding
loans to
31/12/2013
III
Long-term borrowings
216.006.903
207.105.841
658.976.683
1
DongA Joint Stock Commercial
Bank
137.493.862
114.277.088
99.779.635
2
Vietnam Export Import
Commercial Joint - Stock Bank
58.879.764
92.828.753
559.197.048
3
Sacombank Finance Leasing
Company
19.633.277
-
-
287.098.149
233.033.156
754.790.745
Total
Outstanding
loans to
31/12/2014
Outstanding
loans to
30/06/2015
(From Audited Financial Statements of 2013, 2014, and Reviewd Financial Statements in 6M 2015)
Source: STK
In general, the Company used its loans effectively. While long-term loans are
mainly used to finance plant expansion activities, to enhance production capacity, the
Company is quite flexible with its short-term loans policy. Until the end of 2014, total
outstanding short-term loan was just VND 26 billion, significantly decreased from VND
41,6 billion at the end of 2013. Hence, the Company is able to borrow more short-term
loans in the coming time.
Beside the streamlined business operating model, taking advantage of suppliers‟
capital (the Company can defer payments to suppliers thanks to its reputation),
competitiveness of product quality and market also contribute to reduce its receivables
and even ask customers to pay in advance. Therefore, depend on short-term borrowing
rate and suppliers‟ credit policy, the Company is flexible to choose which policy that
advantages to the Company. For instant, if short-term rate is more competitive than
suppliers‟s credit policy, the Company will immediately pay suppliers and borrow shortterm loans with competitive interest rates to ensure the Company‟s financial performance.
In term of debt structure, long term debts in the 2013-2105 period accounted for
the major portion of 75%-89% total debt. The long term debts above were used to finance
for Trang Bang 3 project which has the investment of USDmn33,9. The longterm debts
reached to bnVND659 at the end of 1H2015, up from bnUSD207 at the end of 2014 when
the TB3 project was completed and put into operation.
THE ADVISOR: DONG A SECURITIES CO., LTD
81
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
11.2 Financial ratios
Bảng 32 Error! Bookmark not defined.: The Company’s main financial ratios in
FY2013A, FY2014A
Items
Unit
2013
2014
Solvency ratios
Short-term solvency ratio
Quick Ratio
Times
Times
1,32
0,63
2,23
1,35
Financing structure
Debt/ Total Capital ratio
Debt/ Equity ratio
%
%
50,94
45,80
103,85
84,49
Turnover
6,30
6,32
Turnover
1,42
1,28
Earning after tax/ Net sales
%
5,12
7,28
Earning after tax/ Equity
%
15,30
18,02
Earning after tax/ Total Assets
%
7,29
9,35
Profit from business operations/ net sales
%
6,57%
9,29%
VND/share
1.917
2.725
VND/share
15.949
15.951
Operational capability ratios
Inventory turnover (Cost of goods sold/
Average Inventory)
Total asset turnover (Net Sales/ Total
Assets)
Profitability ratios
Indicators related to shares
Earning per share (earning after
tax/Weighted average outstanding
shares)
The book value of a share (Equity/
Weighted average outstanding shares)
Source: STK’s Audited Financial Statement of FY2013A, FY2014A
Generally, the Company‟s business is stable and well developed over the years. This is
demonstrated through financial ratios as follow:
- About solvency: Short-term ratios and quick ratios in FY2014A increased
significantly compared to FY2013A due to the significant increase of the cash
equivalents (deposits with maturity of 03 months or less).
- Capital Structure: Debt proportion in the Company‟s total capital in FY2014A
decreased compared to FY2013A. This is a necessary move to balance STK‟s capital
structure to continue to lend from banks to fund Trang Bang plant expansion project –
Phase 3 to ensure the Company's capital structure remains balance.
- Operational capability ratios: With streamlined production methods (Kaizen, 5S, etc.)
as well as the application of advanced software for management (eg. SAP All in One),
THE ADVISOR: DONG A SECURITIES CO., LTD
82
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
the Company has managed inventory well and increased its production capability and
revenue thoughout the years. Consequently, inventory turnovers indicators have
significantly improved in the past years.
- Profitability ratios: As mentioned in the previous section, the Company‟s historical
net profit margin was affected by input and output markets. By the end of FY2014A,
ROE and ROA increased to 18,02% and 9,35%, respectively. This ratio is kind of
high compared to the same industry‟s other firms in the region.
12. Board of Directors. Board of Management, Supervisory Committee and Chief
Accountant
Table 33 Error! Bookmark not defined.: Members of BOD, BOM, SC and Chief
Accountant of the Company
No
Full name
Year of
birth
Title
BOARD OF DIRECTORS
1
Mr. Dang Trieu Hoa
1969
Chairman of the Board
2
Mrs. Dang My Linh
1972
Member of the Board
3
Mr. Dang Huong Cuong
1976
Member of the Board
4
Mrs. Cao Thi Que Anh
1966
Independent member of the Board
5
Mr. Lee Chien Kuan
1962
Independent member of the Board
6
Mr. Thai Tuan Chi
1963
Independent member of the Board
SUPERVISORY COMMITTEE
1
Mr. Nguyen Tu Luc
1952
Head of Supervisory Committee
2
Mrs. Nguyen Thi Ngoc
Linh
1976
Member of Supervisory Committee
3
Mr. Le Anh Tuan
1951
Member of Supervisory Committee
BOARD OF MANAGEMENT AND CHIEF ACCOUNTANT
1
Mr. Dang Trieu Hoa
1969
General Director
2
Mr. Phan Nhu Bich
1970
Chief Accountant
THE ADVISOR: DONG A SECURITIES CO., LTD
83
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
12.1 Board of Directors
 12.1.1. Mr. Dang Trieu Hoa - Chairman of Board Of Directors cum General
Director
-
Full name:
Dang Trieu Hoa
-
Gender:
Male
-
ID number: 023323686
-
Date of birth: 19/10/1969
-
Nationality: Vietnam
-
Hometown: China
-
Permanent Address: No. 51 (A30) Bau Cat Street, Tan Binh District, Ho Chi Minh
City
-
Education level: 12/12
-
Qualifications: Business Administration
-
Working experience:
Time
Issued on: 25/12/2006
Issued by: HCMC Police
Place of birth: Campuchia
Ethnic: Chinese
Working place
Position
1991 - 1995
Viet Phu Company Limited
Director
1995 - 2000
Hoan A Company Limited
Director
2000 - 2005
Century manufacturing – trading Co.,
Ltd.
Chairman of BOD cum
General Director
STK corporation
Chairman of BOD cum
General Director
2005 - Present
-
Position in the listing organization: Chairman of BOD cum General Director
-
Position held at other institutions: None
-
Number of shares owned: 5.881.419 shares, accounting for 13,9% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital
-
Ownership of related persons:
No Relationship
1
Sister
2
Brother
Full name
Dang My Linh
Dang Huong
ID number/ Business
Registration
Certificate
ID number: 023323687
Issued on:16/02/2011
Issued by:TP.HCM
ID number: 023323688
THE ADVISOR: DONG A SECURITIES CO., LTD
Number of
shares
owned
3.608.251
Owned
%/charter
capital
3.608.251
8,53%
8,53%
84
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Cuong
-
Issued on:12/07/2014
Issued by:TP.HCM
Liabilities to the Company: None.
-
Remuneration and other benefits: 90.000.000 VDN/ year
-
Benefits related to the listing organization: None
-
Law violation: None.
 12.1.2. Mrs. Dang My Linh - Member of Board of Directors
-
Full name:
Dang My Linh
-
Gender:
-
ID number: 023323687
Issued on: 16/02/2011 Issued by: HCMC Police
-
Date of birth: 19/01/1972
Place of birth: Campuchia
-
Nationality: Vietnam
Ethnic: Chinese
-
Hometown: China
-
Permanent Address: 65/39 Phu Tho Street, Ward 1, District 11, Ho Chi Minh City
-
Education level: 12/12
-
Qualifications: Master of Business Administration
Female
Degree
-
Majors
Education Unit
Master
Business Administration
Maastricht School of
management (Netherland)
Bachelor
English
University of languages and
international studies
Working experience:
Time
Working place
1993 - 1999
Worldtex Enterprise Co., Ltd
2000 - 2005
Century manufacturing – trading
Co., Ltd.
2001 - Present
Lien An Investment and
Commercial JSC
Position
Assistant of General
Director
Member of BOD
General Director
2005 - Present STK corporation
Member of BOD
2011 - Present
General Director
Khai Tien Real Estate Development
Company Limited
THE ADVISOR: DONG A SECURITIES CO., LTD
85
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Position in the listing organization: Member of BOD.
-
Position held at other institutions:
 Lien An Investment and Commercial JSC: General Director
 Khai Tien Real Estate Development Company Limited: General Director
-
Number of shares owned: 3.608.251 shares, accounting for 8,53% of charter
capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons:
No Relationship
Full name
ID number/ Business
Registration
Certificate
Number: 023323686
Issued on: 25/12/2006
Issued by: TP. HCM
Number: 023323688
Issued on: 12/07/2014
Issued by: TP.HCM
Number of
shares
owned
Owned
%/charter
capital
5.881.419
13,90
3.608.251
8,53
1
Brother
Dang Trieu Hoa
2
Brother
Dang Huong Cuong
-
Liabilities to the Company: None.
-
Remuneration and other benefits: 90.000.000 VND/ year
-
Benefits related to the listing organization: Lien An Investment and Commercial
JSC has trading relationship (purchasing) with the Company with a total
transaction value in FY2014A accounted for approximately 0,4% of STK‟s
revenue.
-
Law violation: None.
 12.1.3. Mr. Dang Huong Cuong – Member of Board of Directors
-
Full name:
Dang Huong Cuong
-
Gender:
-
ID number: 023323688
-
Date of birth: 04/07/1976
-
Nationality:
-
Hometown: China
-
Permanent Address: 65/39 Phu Tho Street, Ward 1, District 11, Ho Chi Minh City
-
Education level: 12/12
Male
Vietnam
Issued on: 12/07/2014
Issued by: HCMC Police
Place of birth: HCMC
Ethnic: Chinese
THE ADVISOR: DONG A SECURITIES CO., LTD
86
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Qualifications: Business Administration
-
Working experience:
Time
2000 - 2005
2004 - Present
Working place
Century manufacturing – trading
Co., Ltd.
Asia P.A.N Company Limited
2005 - Present
STK corporation
Position
Member of BOD
Director
Member of BOD
-
Position in the listing organization: Member of BOD.
-
Position held at other institutions: Director of Asia P.A.N Company Limited.
-
Number of shares owned: 3.608.251 shares, accounting for 8,53% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons:
No
Relationship
Full name
ID number/ Business
Registration Certificate
Number of
shares
owned
Owned
%/charter
capital
5.881.419
13,90
3.608.251
8,53
Number: 023323686
1
Brother
Dang Trieu Hoa
Issued on: 25/12/2006
Issued by: HCMC
2
Number: 023323687
Sister
Dang My Linh
Issued on: 16/02/2011
Issued by: HCMC
-
Liabilities to the Company: None.
-
Remuneration and other benefits: 90.000.000 VND/ year
-
Benefits related to the listing organization: P.A.N Asia Co.. Ltd. has trading
relationship (purchasing) with the Company with a total transaction value in
FY2014A accounted for approximately 0,46% of STK‟s revenue.
-
Law violation: None
 12.1.4. Mrs. Cao Thi Que Anh – Independent member of Board of Directors
-
Full name:
Cao Thi Que Anh
-
Gender:
-
ID number: 025490567
-
Date of birth: 17/04/1966
Female
Issued on: 08/10/2011
Issued by: HCMC Police
Place of birth: Thanh Hoa Province
THE ADVISOR: DONG A SECURITIES CO., LTD
87
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Nationality: Vietnam
-
Hometown: Thanh Hoa Province
-
Địa chỉ liên lạc: 31A Le Van Mien Street, Thao Dien Ward, District 2, HCMC
-
Education level: 12/12
-
Qualifications: Food Chemical Engineer (Ha Noi University of Science and
Technology).
-
Working experience:
Time
Ethnic: Vietnamese
Working place
Position
1991 - 2003
The Republic of Poland
Free business
2003 - 2008
Ho Chi Minh City
Free business
Greenfood
Company
2008 - Present
Joint
Stock
General Director
Member of Investment Board;
Vietnam
Securities JSC.
2009 - 2012
International
Member of Board of
Directors;
Chairman of Board of
Directors.
01/2015 - Present
Century
Synthetic
Corporation
Fiber
Member of BOD
-
Position in the listing organization: Member of BOD
-
Position held at other institutions: General Director of Greenfood Joint Stock
Company.
-
Number of shares owned: 0 shares accounting for 0% of charter capital.
-
Number of shares represented ownership: 0 shares accounting for 0% of charter
capital.
-
Ownership of related persons:
No Relationship
1
-
General
Director
Full name
ID number/ Business
Registration Certificate
Number of
shares
owned
Owned
%/charter
capital
Greenfood Joint
Stock Company
Number: 3700151313
Issued on: 20/11/2014
Issued by: Department of
planning and investment
Binh Duong Province
300.000
0,71
Liabilities to the Company: None.
THE ADVISOR: DONG A SECURITIES CO., LTD
88
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Remuneration and other benefits: 90.000.000 VND/ year
-
Benefits related to the listing organization: None.
-
Law violation: None
 12.1.5. Mr. Lee Chien Kuan – Independent member of Board of Directors
-
Full name:
Lee Chien Kuan
-
Gender:
-
ID number: 300136393
-
Date of birth: 05/07/1962
-
Nationality: Taiwan
-
Hometown: Taiwan
-
Permanent Address: 1F. No 22, Lane 180, San-Ming Rd, Taipei, Đài Loan
-
Education level:
-
Qualifications: Bachelor of Management
-
Working experience:
Male
Time
Issued on: 09/02/2009
Issued by: Taiwan
Place of birth: Taiwan
Ethnic: Chinese
Working place
2008 - Present
STK corporation
Position
Member of BOD
-
Position in the listing organization: Member of BOD.
-
Position held at other institutions: None.
-
Number of shares owned: 0 shares, accounting for 0% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons: None.
-
Liabilities to the Company: None.
-
Remuneration and other benefits: 90.000.000 VND/ year
-
Benefits related to the listing organization: None
-
Law violation: None
 12.1.6. Mr. Thai Tuan Chi – Independent member of Board of Directors
-
Full name:
-
Gender:
-
ID number:
Thai Tuan Chi
Male
022054568 Issued on: 11/06/2012
THE ADVISOR: DONG A SECURITIES CO., LTD
Issued by: HCMC Police
89
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Date of birth: 10/08/1963
Place of birth: Vietnam
-
Nationality: Vietnam
-
Hometown:
-
Permanent Address: QQ18B Ba Vi Street, Ward 15, District 10, Ho Chi Minh City
-
Education level: 12/12
-
Qualifications: Master of Business Administration
Ethnic: Chinese
Guangdong - China
o High level of Business Administration (University of Tuck - Dartmouth,
USA)
o Business Management Asia Pacific (Japan)
o Mini - MBA (IIM International Management Institute - National Institute
CNAM. Legal)
-
Working experience:
Time
Working place
1982 - 1991
Position
Ho Chi Minh City
Free business
1991 - 09/1995
District 4 Service Trading Company
Limited
Staff
09/1995 - 1998
Thai Tuan Textile Co., Ltd
Chairman of BOD cum
General Director
06/1998 - 2003
Thai Tuan Textile Co., Ltd
Chairman of BOD cum
General Director
02/2003 - 2007
Thai Tuan Textile and Garment Co., Ltd
Chairman of BOD cum
General Director
12/2007 - 2009
Thai Tuan Textile and Garment
Corporation
Chairman of BOD cum
General Director
Thai Tuan Group Corporation
Chairman of BOD cum
General Director
STK corporation
Member of BOD
05/2009 Present
2007 - Present
-
Position in the listing organization: Member of BOD
-
Position held at other institutions: Chairman of BOD cum General Director of Thai
Tuan Group Corporation.
-
Number of shares owned: 0 shares, accounting for 0% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons:
THE ADVISOR: DONG A SECURITIES CO., LTD
90
CENTURY SYNTHETIC FIBER CORPORATION
No Relationship
1
Full name
Chairman
of BOD
cum
General
Director
PROSPESTUS
ID number/ Business
Registration
Certificate
Number
Owned
of shares %/charter
owned
capital
Number: 301455459
Thai Tuan Group
Corporation
Issued on: 25/12/2009
458.245
1,08
Issued by: TP. HCM
-
Liabilities to the Company: None.
-
Remuneration and other benefits: 90.000.000 VND/ year
-
Benefits related to the listing organization: None
-
Law violation: None
12.2 Supervisory Commitee
 12.2.1. Mr. Nguyen Tu Luc - Head of the Supervisory Commitee
-
Full name:
Nguyen Tu Luc
-
Gender:
-
ID number:
-
Date of birth:
05/01/1952
-
Nationality:
Vietnam
-
Hometown:
Ha Noi.
-
Permanent Address: 227/28 Nguyen Trong Tuyen Street, Ward 8, Phu Nhuan
District, Ho Chi Minh City
-
Education level: 12/12
-
Qualifications: Bachelor of Accounting.
-
Working experience:
Male
020064724 Issued on: 18/07/2002
Time
Issued by: HCMC Police
Place of birth: HCMC
Ethnic: Kinh
Working place
Position
1980 - 1984
Ho Chi Minh City Hotel
Company
Chief Accountant of Saigon
Hotel
1984 - 2000
Nam A Shoes Import – Export
Company
Chief Accountant
2000 - 2007
STK corporation
2007 Present
STK corporation
Chief Accountant
Assistant of General Director
Head of Supervisory
Committee
2006 Present
Thanh Cong Textile Garment
THE ADVISOR: DONG A SECURITIES CO., LTD
Head of the Supervisory
91
CENTURY SYNTHETIC FIBER CORPORATION
Time
01/2015 Present
Working place
Investment Trading JSC.
Mai Hoang Vu Co., Ltd.
PROSPESTUS
Position
Commitee
Chief Accountant
Head of Financial Department
-
Position in the listing organization: Assistant of General Director, Head of
Supervisory Committee
-
Position held at other institutions:
 Head of Supervisory Committee of Thanh Cong Textile Garment Investment
Trading JSC. (TCM)
 Chief Accountant and Head of Financial Department of Mai Hoang Vu Co., Ltd.
-
Number of shares owned: 47.656 cổ phần, accounting for 0,11% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons: None
-
Remuneration and other benefits: 32.000.000 VND/ year
-
Liabilities to the Company: None
-
Benefits related to the listing organization: None
-
Law violation: None
 12.2.2. Mrs. Nguyen Thi Ngoc Linh - Member of Supervisory Board
-
Full name: Nguyen Thi Ngoc Linh
-
ID number: 012545593
Issued on:14/02/2008 Issued by: Ha Noi Police
-
Date of birth: 21/02/1976
Place of birth: Ha Noi
-
Nationality: Vietnam
Ethnic: Kinh
-
Hometown: Ha Noi
-
Permanent Address: 1225/24/9 Huynh Tan Phat Street, KP 4, Phu Than Ward,
District 7, HCMC
-
Education level: 12/12
-
Qualifications: Finance, Bank
-
Working experience:
Time
1998 - 2003
Working place
Position
Thang Long Computer Supermarket –
Thang Long brance – FINTEC Chief Accountant
Company
THE ADVISOR: DONG A SECURITIES CO., LTD
92
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Dong A Securities Company Limited Director of
– Consultant division (IB)
Organizational Customer
Service, Head, Leader,
Senior officer
Incomfish Fisheries Commercial
Investment Corporation; Phu Hoa Tan
Member of Supervisory
Water Supply Corporation; Ben
Board
Thanh Water Supply Corporation;
Nha Be Water Supply Corporation;
Dong A Securities Company Limited Deputy Director,
- Ha Noi branch
Director of Hanoi Branch
Member of Supervisory
STK corporation
Board
2004 - 2014
2006 - 2014
2008 - 2014
2007 - Present
-
Position in the listing organization: Member of Supervisory Board.
-
Position held at other institutions: None.
-
Number of shares owned: 0 shares, accounting for 0% of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons: None
-
Remuneration and other benefits: 32.000.000 VND/ year
-
Liabilities to the Company: None
-
Benefits related to the listing organization: None
-
Law violation: None
 12.2.3. Mr. Le Anh Tuan - Member of the Supervisory Board
-
Full name: Le Anh Tuan
-
Gender: Male
-
ID number:
-
Date of birth:
-
Nationality: Vietnam
-
Hometown: Ho Chi Minh City
-
Permanent Address: 46/10/30 Nguyen Cuu Van Street, Ward 17, Binh Thanh
District, Ho Chi Minh City
-
Education level: 12/12
-
Qualifications: Economic Management - Business Management MSc.
-
Working experience
020151867 Issued on: 20/11/2009
31/10/1951
Issued by: HCMC Police
Place of birth: HCMC
Ethnic: Kinh
THE ADVISOR: DONG A SECURITIES CO., LTD
93
CENTURY SYNTHETIC FIBER CORPORATION
Time
PROSPESTUS
Working place
Position
1985 - 1998
Saigon Co-op
Deputy General
Director
1996 - 1998
HCM Council of cooperative alliance
Member.Chief of
Economic Committee
1995 - 1998
South Saigon Development Corporation
Member of BOD
1998 - 1999
HCMC Community Party‟s Organizing
Committee
Executive
1999 - 2012
Management Board HCMC Export
Processing And Industrial Zones
Authority (HEPZA)
Deputy head
STK corporation
Member of the
Supervisory
Committee
2013 - Present
-
Position in the listing organization: Member of the Supervisory Committee
-
Position held at other institutions: None
-
Number of shares owned: 50.312 shares, accounting for 0,12% of charter capital
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital
-
Ownership of related persons: None
-
Remuneration and other benefits: 32.000.000 VND/ year
-
Liabilities to the Company: None
-
Benefits related to the listing organization: None
-
Law violation: None
12.3 Board of Directors
 12.3.1. Mr. Dang Trieu Hoa – General Director
(Curriculum vitae presented above)
12.4 Chief Accountant
 Mr. Phan Nhu Bich - Chief Accountant
-
Full name: Phan Nhu Bich
-
Gender: Male
-
ID number: 026000231
Issued on: 03/03/2015
-
Date of birth: 13/06/1970
Place of birth: Quang Ngai Province
-
Nationality: Vietnam
Ethnic: Kinh
THE ADVISOR: DONG A SECURITIES CO., LTD
Issued by: HCMC Police
94
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
-
Hometown: Quang Ngai Province
-
Permanent Address: 69/14/9 No 3 street, Quarter 2, Binh Hung Hoa Ward, Binh Tan
District, HCMC.
-
Education level: 12/12
-
Qualifications: Accouting, Auditing
-
Working experience:
Time
Working place
Position
1997 - 2004
Binh Phuoc Province Electric
Accountant
2004 - 2010
ThanhCong Textile garment investment
Accountant and
trading joint stock company
Supervisor
STK corporation
Chief Accountant
2010 - Present
-
Position in the listing organization: Chief Accountant.
-
Position held at other institutions: None.
-
Number of shares owned: 28.625 cổ phần, accounting for 0,068 % of charter capital.
-
Number of shares represented ownership: 0 shares, accounting for 0% of charter
capital.
-
Ownership of related persons: None.
-
Liabilities to the Company: None.
-
Remuneration and other benefits: None
-
Benefits related to the listing organization: None.
-
Law violation: None
13. Assets
Fixed Assets value of the Company as of 30/06/2015 as follows:
Table 34: Tangible and Intangible fixed assets of the Company at 30/06/2015
Unit: VND
Remaining
No
Item
Cost
Remaining value
ratio
1 Tangible fixed assets
874.640.556.581
453.650.450.338
51,87%
1.1 Building and structures
150.598.256.568
78.081.341.721
51,85%
1.2 Machinery and equipments
661.440.723.589
343.198.208.967
51,89%
62.315.221.616
32.263.086.955
51,77%
1.3
Means of transports and
transmission equipments
THE ADVISOR: DONG A SECURITIES CO., LTD
95
CENTURY SYNTHETIC FIBER CORPORATION
No
1.4
2
3
Remaining value
Remaining
ratio
286.354.808
107.812.695
37,65%
-
-
13.834.916.387
5.093.886.080
36,82%
13.834.916.387
5.093.886.080
36,82%
715.634.264.852
715.634.264.852
100,00%
1.604.109.737.820
1.174.378.601.270
73,21%
Item
Cost
Management devices and
tools
Fixed assets of financial
leasing
Intangible assets
3.1 Computer software
4
PROSPESTUS
Construction in Progress
Total
Source: Reviewed 6M2015 Finanicial statements
Construction in Progress as of 30/06/2015 included construction cost of machines
and factory in the process of investing Trang Bang - Phase 3 project (TB3).

List of real estate the Company is managing and using:
Table 35: List of real estate the Company is managing and using
TT
1
2
Danh mục
Địa chỉ
Head office of B1-1 Cu Chi North
West Industrial
STK
Zone HCM City
Trang
Bangbranch
No 8 Street. Trang
Bang Industrial
Zone. An Tinh
Ward. Trang Bang
District. Tay Ninh
Province
Diện tích
(m2)
Thời
hạn
Ghi chú
11,200
5,600
Leased Land, paid
50 years periodically until 2045
land
45 years (long-term
leasing)
50,000
Certificate of land
using right number:
BA
021765
on
07/05/2012 issued by
45 years
People‟s Committee
of Tay Ninh province
(Long term leased
land)
Source: STK
14.
Development orientation, profit and dividend in the next year.
14.1 Development Orientation
In the period 2015 - 2016, the most important objective is to build up Trang Bang
Phase-3 project (TB3). When completed, it will be a factory owned the most modern
equipment chain, ensuring the supply of advanced fiber for Vietnam market.
Table 36 Error! Bookmark not defined.: Disbursement progress Trang Bang Phase 3
project
THE ADVISOR: DONG A SECURITIES CO., LTD
96
CENTURY SYNTHETIC FIBER CORPORATION
Project
Estimate of
Expenditure
PROSPESTUS
Disbursement Progress
Billion VND
2015
2016
729
525
91
Trang Bang Phase 3 project
Source: STK
The plant has been put into operation since July 2015. 50% of Trang Bang 3
capacity will gather steam by 3Q2015 before the factory is running at full capacity of
52,000 tons starting January 2016.
Moreover, the company is expected to invest 12.5 million USD (approximately
273 billion VND) in the plant Trang Bang 4 to raise its capacity by 8.000 tons / year.
Machinery installation is projected to be occured from Q4 2015 to Q2/2016. By the end
of Q3/2016, it is expected for the company to complete the machinery installation and
production launching, raising the total capacity to 60.000 tons/year.
Table 37: Investment Projects
July 2015
First quarter
2016
Implemented
50% capacity of 100% capacity
Trang Band 3
of Trang Bang
3
Expected
The feasibility of
the establishment
of
fiber/weaving/dye
ing is now under
consideration
Fourth
quarter 2015
to second
quarter 2016
Fourth
quarter 2016
Installing
Trang
Bang
machines and Phase-4 will be
equipment of under operation
Trang
Bang
Phase -4 project
Source:STK
Beside investing activities for production expansion, the company will focus on
important activities in 2015 and upcoming year:
-
-
Promoting the rebranding, expanding markets, particularly in advanced fiber
products;
Increasing productivity, output, lowering product cost, enhancing the production
of advanced products, increasing operation efficiency of production lines,
machinery;
Recruit and train staff; improve quailifications and quality labor;
THE ADVISOR: DONG A SECURITIES CO., LTD
97
CENTURY SYNTHETIC FIBER CORPORATION
-
PROSPESTUS
Focusing on developing added value products;
Restructuring capital, focusing capital on
development.
investment
and
sustainable
14.2 Business Plan in the period of 2015-2016:
According to this orientation, the major financial targets for the years 2015 and
2016 of STK are as follows:
Table 38Error! Bookmark not defined.: Business plan in period of 2015-2016
Unit: Million VND
FY2014A
Plan
Finished
Item
Revenue
1.579.000
Earning before tax
FY2015F
Plan
% 2014
1.457.517 1.694.884
FY2016F
Plan
% 2015
16,29% 1.978.000
16,70%
119.000
136.146
148.842
9,33%
179.000
20,26%
Earning after tax
92.820
106.107
116.097
9,42%
160.000
37,82%
Chartered capital
423.053
423.053
465.358
10%
465.358
-
Return on chartered
capital (%)
21,94%
25,08%
24,95%
-0,13%
34,38%
9,43%
63.458
63.458
69.804
6.346
69.804
-
15%
15%
15%
-
15%
-
Dividends
Dividend payout ratio
(%)
Source: STK
14.3 Purusant to achieve the earning and dividend plan in 2015 -2016
In the period 2013-2014, because the machinery and equipments of the Company
have been fully exploited, there is no way to increase production and revenue
significantly. To ensure the achieving of profit targets in 2014, the Company focuses on
implementing action plans as follows:
 Marketing plans to expand the market
Developing marketing strategies focusing on customer needs, enhancing on
diversifying customer base.
Expanding marketing plans in other countries in the region and with FDI
enterprises in Vietnam.
 Technical and personnel investment plans
Recruiting and training employees in order to creating comparative advantage in
human resource, improving product quality, product diversification, product costs cuts.
THE ADVISOR: DONG A SECURITIES CO., LTD
98
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Build up a good trained labor force, having policies to attract and retain highly
skilled and experienced experts.
Offer Professional Training courses about technical and management skills to
staff. Planning successor programs to ensure that qualified candidates have opportunities
to be promoted to management positions.
Advancing the quality control in the factory to every individual in the
management team to insure productivity and product quality.
 Other plans
Expanding Trang Bang Phase-3 project (TB3) advanced in economy of scales.
When the plant is completed in middle 2015 and early 2016, revenue will grow
significantly, leading to profit increasing (30.3% in 2016 compared to 2015). According
to STK, these revenue and profit targets have not included the positive impact (if any)
from the TPP Agreement.
Focusing on creating added value products. Investing in R&D to provide products
that meet the unique needs of each client.
Strictly follow manufacturing processes to ensure the quality standard of ISO
9001-2008, continuing to apply management methods like Kaizen and 5S as well as
inviting experts from abroad to train and enhance management team.
15. Advisory’s opinions on profit and dividend plan
In 2015, STK will focus on market expansion, improving productivity and
efficiency of human resources. In addition, the Company also strives to implement Trang
Bang Phase-3 project and restructuring capital, taking advantage of opportunities in the
capital markets to help the Company reduce finance cost, increasing profit for the
coming years.
Based on the information collected, analyzing business situation and the current
financial situation of The STK, along with market analysis, Dong A Securities Company
considers that the profit and dividend plan STK expected in 2015 is feasible without
encountering unforeseen risks and other unchangeable factors.
We note that our comments are only for reference for investors and based on the
collected information. We do not intend to guarantee the value of the securities as well as
the reliability of the forecast data.
16. Information of listing organization about the commitment but not yet
implemented
None.
17.
Information of litigation involving the Company that may affect the price of the
THE ADVISOR: DONG A SECURITIES CO., LTD
99
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
listing shares
None.
V.
LISTING SHARES
1.
Type of shares
All offered shares of STK are common shares.
2.
Par value
Share par value is 10,000 VND per share.
3.
Total number of listing shares
Total number of listing shares is 42.305.336 shares.
4.
The number of shares is restricted to transfer according to the regulations of
law or of listing organization
Pursuant to the regulation at Article 53 of the Government's Decree No.
58/2012/ND-CP dated July 20, 2012 of the Government stipulating in detail and guiding
the implementation of a number of articles of the securities Law and the law amending
and supplementing a number of articles of securities Law: “ Shareholders who are
individuals and organizations that property representatives are members of the Board of
Directors, Supervisory Committee, Director (General Director), Deputy Director (Deputy
General Director) and Chief accountant of the company; major shareholders who are
related to members of the Board of Directors, Supervisory Committee, Director (General
Director), Deputy Director (Deputy General Director) and Chief accountant of the
company must commit to hold 100% of the their own shares in the period of 06 months
from the listing date and 50% of these shares during the next 06 months, excluding the
shares owned by the State that above individuals represent to hold”.
Accordingly, the total number of shares is restricted to transfer for individuals and
organizations as stipulated above of the Century Synthetic Fiber Corporation from the
date of listing is 13.224.514 shares, detail as follow:
Table 39Error! Bookmark not defined.: The total number of shares is restricted to
transfer
No
Full name
Position in the listing
company
Number
of owned
share
(share)
Owned
proportion
(%)
Note
Board of Director, Board of Management and Chief accountant
1
Mr Dang Trieu Hoa
Chairman of Board Of
Directors cum General
Director
THE ADVISOR: DONG A SECURITIES CO., LTD
5.881.419
13,9%
100
CENTURY SYNTHETIC FIBER CORPORATION
No
Full name
PROSPESTUS
Position in the listing
company
2
Mrs. Dang My Linh
Member of
Directors
Board
Of
3
Mr. Dang Huong Cuong
Member of
Directors
Board
Of
4
Mrs. Cao Thi Que Anh
5
Number
of owned
share
(share)
Owned
proportion
(%)
3.608.251
8,53%
3.608.251
8,53%
Independent Member of
Board Of Directors
0
0%
Mr. Lee Chien Kuan
Independent Member of
Board Of Directors
0
0%
6
Mr. Thai Tuan Chi
Independent Member of
Board Of Directors
0
0%
7
Mr. Phan Nhu Bich
Chief accountant
28.625
0,067%
47.656
0,11%
Note
Supervisory Committee
1
Mr. Nguyen Tu Luc
Chief
of
Committee
Supervisory
2
Mr. Le Anh Tuan
Member of Supervisory
Committee
50.312
0,12%
3
Mrs. Nguyen Thi Ngoc Member of Supervisory
Linh
Committee
0
0%
13.224.514
31,26%
Total
Source: STK
5.
Price valuation method
Shares price of the Company is calculated by comparing with other companies
operating in the textile and garment industry (P/E and P/BV).
5.1 Selection criteria of comparing companies
 The companies operating in textile and garment industry, relating to textile
industry and their shares already listed on the Stock Exchange (HNX/ HOSE);
 The Chartered capital Scale of the companies selected to compare are not
exceed 20 times of the Chartered Capital of the Company.
5.2 The calculation formula of method P/E
P = EPS x (P/E)Average
In which:
P : 1 share market price at the time of valuation (07/08/2015)
THE ADVISOR: DONG A SECURITIES CO., LTD
101
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
EPS: Earnings per share (calculated for the last 4 quarters to the time of
valuation)
(P/E)Average : Average coefficient of share market price/ Earnings per share

Determine EPS for the last 4 quarters
EPS for the last 4 quarters are calculated base on financial statements of the first
and second quarter of 2015, and the third and fourth quarter of 2014 of compared
companies published on the website of Ho Chi Minh Stock Exchange, detail as following:
Net profit (VND)
Stock code
The last 4 quarters
The average
number of
outstanding
shares for last 4
quarters
EPS for last
4 quarters
(VND/share)
GMC
78.536.168.363
11.641.070
6.746
TCM
170.830.898.232
49.099.501
3.479
NPS
1.643.881.345
2.170.000
758
TNG
67.612.581.221
18.745.167
3.607
5.3 The calculation formula of method P/BV
P = BV x (P/BV) Average
In which:
P
: 1 share market price at the time of valuation (07/08/2015)
BV
: Book value per share at the time of valuation 30/06/2015
(P/BV) Average : Average coefficient of share market price/ Book value per share
5.4 Determine (P/BV)average và (P/E) average:
Stock code
EPS for last 4
quarters
(VND/share)
BV
(VND/share)
P
(07/08/2015)
(VND/share)
P/E
P/B
GMC
6.746
22.730
48.400
7,17
2,13
TCM
3.479
14.926
36.500
10,49
2,45
NPS
758
15.224
14.000
18,48
0,92
THE ADVISOR: DONG A SECURITIES CO., LTD
102
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Stock code
EPS for last 4
quarters
(VND/share)
BV
(VND/share)
P
(07/08/2015)
(VND/share)
P/E
P/B
TNG
3.607
13.614
26.500
7,35
1,95
10,87
1,86
Average
5.5 Determine price of shares
Price of shares of Century Synthetic Fiber Corporation is determined as follow:
Owner‟s equity at the time 30/06/2015
673.284.544.687 VND
Intangible asset at the time 30/06/2015
5.093.886.080 VND
Total number of outstanding shares
42.305.336 share
Book value per share (BV)
15.794 VND/share
Earnings per share for last 4 quarter (EPS)
2.620 VND/share
Average P/E of industry
10,87 time
Average P/B of industry
1,86 time
Share price
P = EPS x P/Eaverage
28.487 VND/share
P = BV x P/BVaverage
29.417 VND/share
5.6 Summary of results
The valuation results of STK share are summaried as follow:
Share price
(VND/share)
Proportion
Method P/E
28.487
50%
MethodP/BV
29.417
50%
Method
Average share price
28.952
Thus, Century Synthetic Fiber Corporation expected their share price trading on
Ho Chi Minh Stock Exchage is 29.000 VND/share.
However, depending on the market situation and the activities of the Company at
the time of listing, the Board of Director of STK may consider to change the expected
trading price above and decide share price officially listed on the Ho Chi Minh Stock
Exchanges.
THE ADVISOR: DONG A SECURITIES CO., LTD
103
CENTURY SYNTHETIC FIBER CORPORATION
6.
PROSPESTUS
Limitation on number of shares held by foreigners
Currently, the Company‟s Charter of does not regulate specific provision on
foreign ownership ratio. After STK shares are listed on the Ho Chi Minh Stock
Exchanges, the foreign ownership ratio will comply with the regulation at the clause 2
Article 1 of Decree 60/2015/NĐ-CP dated 26th June 2015 (effect as from 1st September
2015) of the Government about amending and supplementing some articles of Decree
No.58/2012/ND-CP dated 20th July 2012, in which regulates:
“1. Foreign ownership caps at public companies:
a) If Vietnam is a member of the international treaties containing provisions on
foreign ownership caps, such provisions of the international treaties shall apply;
b) If a public company operates in an industry or sector related to business
investments and the laws on investment and relevant laws contain provisions on foreign
ownership caps, the provisions of such laws shall apply.
If a public company operates in an industry or sector related to business
investments that are conditional applicable to foreign investors, and where there is no
specific provision on foreign ownership caps, the maximum of 49% shall apply;
c) If a public company operates in multi – sectors and different foreign ownership
caps are stipulated, the applicable cap shall not exceed the lowest limit among the
foreign ownership caps provided for the sectors (in which the company operates
businesses), unless the international treaties specify otherwise;
d) If a public company does not fall into any above circumstances, the foreign
ownership cap shall be unrestricted, unless its Charter specifies otherwise.”
However, until now there are no documents guiding in detail about the foreign
ownership ratio for specific businesses of public companies according to the Decree
60/2015/NĐ-CP. Therefore, Century Synthetic Fiber Corporation will temporarily apply
the provision on foreign ownership ratio is maximum 49% of charter capital. After having
documents guide about the foreign ownership caps for specific businesses, STK will
review their business and base on that, STK will estimate the foreign ownership ratio
according to the regulation of law. Then STK will amend and supplement their
Company‟s Charter (if necessary) via convening the General Assembly of Shareholders.
Regarding to reporting and announcing information about the foreign ownership ratio,
the Company will comply with the provisions of law.
On 15th May 2015, the proportion of the foreign ownership cap over the
Company‟s charter capital is 9,45%.
7.
Related taxes:
Corporate Income Tax: Currently, STK pays enterprise income tax in accordance
with the tax rate 22% for business and production activities in the Cu Chi plant and
THE ADVISOR: DONG A SECURITIES CO., LTD
104
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Trang Bang plant phase 1 & 2. However, the factory Trang Bang Phase 1 is reduced by
50% tax rate for 2015 and 2016, the factory Trang Bang Phase 2 is reduced by 50%
from 2015 to 2018.
After the completion of Phase 3 of the Trang Bang plant, the Company will be
entitled to the preferential tax rates for manufacturing operations of the plant with the
tax rate as follows: tax exemption in the first 2 years, reducing 50% of 20% tax rate in
the next 4 years, and paying tax rate of 20% in the next 4 years later : Miễn thuế trong 2
năm đầu, giảm 50% mức thuế suất trong 4 năm tiếp theo sau đó.
Value Added Tax: The Company pays tax under the Value Added Tax deduction
method with a rate of 10% for types of products.
Personal Income Tax: The investors participating in the securities market are
subject to personal income tax under the provisions of the Personal Income Tax Law No.
04/2007QH12 dated 21/11/2007. As the rule, investors can choose one of two ways to
determine the amount to be paid: 0.1% of the total transaction value or 20% of the total
profit from investment securities. In addition, pursuant to Decree 111/2013/TT-BTC,
dividends received from capital contribution or share purchase will be subject to 5% tax.
THE ADVISOR: DONG A SECURITIES CO., LTD
105
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
VI.
THE PARTNERS WITH REGARD TO LISTING
1.
Advising Company:
Dong A Securities Company LTD
Headquarters
Address
: Floor 2 & 3, Building 468 Nguyen Thi Minh Khai Street, Ward 2,
District 3, HCMC
Phone
: (08) 38 336 333
Fax
Website
: www.dag.vn
Email : [email protected]
: (08) 3835 1919
Hanoi Branch
Address
: 181 Nguyen Luong Bang Street, Dong Da District, Hanoi
Phone
: (04) 3944 5175
Fax
: (04) 3944 5178
East Saigon Branch
2.
Address
: 60-70 Nguyen Cong Tru Street, Nguyen Thai Binh Ward, District
1, HCMC
Phone
: (08) 3821 8666
Fax
: (08) 3914 4372
Auditing Company:
Ernst & Young Vietnam Co., LTD
Address
Phone
: No. 2 HaiTrieu Street, Ben Nghe Ward, District 1, HCMC
: (08) 3824 5252
Fax
: (08) 3824 5250
Email
: [email protected]
Website
: www.ey.com
THE ADVISOR: DONG A SECURITIES CO., LTD
106
CENTURY SYNTHETIC FIBER CORPORATION
VII.
PROSPESTUS
APPENDIX
Appendix
Documents
Appendix I A valid Copy of business registration Certificate
Appendix
II
A valid copy of Company's Charter
Appendix
III
Audited Financial Statements of 2012, 2013, 2014, and Reviewd
Financial Statements in 6M 2015
Appendix
IV
Person information of the members of the Board, Board of
Management, Supervisory Board and Chief Accountant
THE ADVISOR: DONG A SECURITIES CO., LTD
107
CENTURY SYNTHETIC FIBER CORPORATION
PROSPESTUS
Ho Chi Minh City, on ………… 2015
LISTING REPRESENTATIVE
CENTURY SYNTHETIC FIBER CORPORATION
CHIEF OF SUPERVISORY COMMITEE CHAIRMAN OF BOARD OF DIRECTORS
CUM GENERAL DIRECTOR
DANG TRIEU HOA
NGUYEN TU LUC
CHIEF ACCOUNTANT
PHAN NHU BICH
CONSULTING UNIT REPRESENTATIVE
DONG A SECURITIES COMPANY LIMITED
DEPUTY GENERAL DIRECTOR
TRUONG NGUYEN THIEN KIM
THE ADVISOR: DONG A SECURITIES CO., LTD
108

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