CMS

• Beneish M-Score: -1.569 and Vietnam peer percentile 78th — this places the company above most Vietnamese peers on the aggression scale (note: the -1.78 US cutoff is not VN-calibrated).
• Year-over-year M-Score change: -2.00 — the M-Score moved substantially from the prior year, which is a secondary cue to changing accounting patterns.
• AQI (asset quality index) = 1.5699 — a relatively high AQI component, which measures increases in non-current/other assets (e.g., write-ups, capitalised costs, long-term receivables).
• SGI (sales growth index) = 1.6865 — elevated sales growth, which can stress quality if not matched by cash generation.
• Cash conversion (three-year operating cash flow / net profit) = -8.27 (4th percentile among Vietnamese non-financials) — reported profits are not converting to operating cash and rank poorly versus peers.
• Earnings-quality sub-scores: Cash conversion 0.0/100, Margin quality 0.0/100, Revenue quality 0.0/100 — these indicate weak observable cash and margin support for reported earnings and revenue recognition.
• Altman Z-Score = 1.89 (grey zone) — distance-to-distress is moderate and not in the safe zone.
• Director-deal registrations net +0.39% of shares outstanding (1 sale registration: 3,000,000 shares; 2 purchase registrations: 3,100,000 shares) — registrations are non-binding intentions but show insiders/related parties registering trades in 2025-10-30 to 2026-10-30.

• Receivables outside the trade cycle = 3.5% of total assets (59th percentile) — limited exposure to long-term/atypical receivables relative to peers.
• Receivables quality sub-score = 100.0/100 — receivables appearance and aging appear strong by the applied measures.
• Accruals quality = 63.6/100 — moderate accruals quality suggests some alignment between reported earnings and accrual patterns.
• Piotroski F-Score = 6/9 — fundamentals are neutral-to-favourable on profitability, leverage/liquidity, and operating efficiency checks.
• No accumulated losses and zero consecutive years of parent net loss up to FY2025 — retained earnings are positive and the parent company is not reporting consecutive statutory losses.
• Statutory loss tests (Decree 155/2020 Art. 120(1)(e) as amended) — none met in the audited annual statements for FY2025.

The listed group controls VCE with a 68.4% holding (control). Top individual shareholders are concentrated: Phạm Minh Phúc 24.3%, Phạm Văn Tùng 5.0%, Phạm Văn Xuyên 4.9%; overall control and a dominant group holding indicate concentrated ownership and potential for related-party activity under group control.

• Compare FY2025 cash flow from operations (statement of cash flows) with parent net profit to corroborate the three-year cash conversion ratio of -8.27 and identify major non-cash reconciling items.
• Inspect the notes for receivables and other long-term receivables / prepayments to verify the 3.5% of total assets classified as receivables outside the trade cycle and check counterparties and related-party flags.
• Examine the ‘related-party transactions’ note for large loans, prepayments, transfers or guarantees with the listed group or with the top shareholders (68.4% group control and the named individuals).
• Read the auditor’s report and the accounting policies note for revenue recognition, capitalisation policies and asset reclassifications that could explain the high AQI (1.5699) and zeroes in revenue/margin quality.