FiinRating Introduction · Financial Information •Business Information •Market Research...

The Most Trusted Credit Rating Agency in Vietnam 1

Fiin Ratings IntroductionDecember 2020


FiinGroup

AT A GLANCE

▪ Corporate Profile

▪ Business Portfolio

▪ Development History

▪ Senior Management


Corporate Overview

Established in March 2008, FiinGroup has become a market leader

in providing financial data, business information, industry research,

credit rating reports and other data-driven analytics services in

Vietnam.

In September 2014, our Company entered a strategic capital and

business alliance with Nikkei Inc. & Quick Corp. (Japan) under

which the Japanese partners hold 35.1% equity stake in our company

and jointly supported Japanese investors in Vietnam.

FiinGroup has been serving more than 1,000 local and foreign

financial institutions and corporations through our fintech platform as

a service (PaaS), annual packages and on-call services.

In October 2019, FiinGroup expanded its B2C model with the

introduction of FiinTrade Platform for individual investors and traders

in Vietnam Stock Market.

FiinGroup officially expanded into the field of Credit Rating Agency

(CRA) after being licensed by the Ministry of Finance on 20/03/2020,

the license number 02/GPXH/02/BTC dated 20/03/2020

FiinGroup currently has over 100 staffs including data analysts,

business analysts, market researchers, risk analysts, credit analysts,

IT engineers and client advisors working at Hanoi Head Office and

branch office in Ho Chi Minh City.

Location: Hanoi Head Office

Ho Chi Minh City branch

Shareholders: Nikkei: 17.55%;

QUICK: 17.55%;

Management and Others: 64.9%

Charter capital: VND 26 billion

No. of employees: 105 (as of June 2020)

Data Analysts, Business Analysts,

Market Analysts, Risk Analysts incl.

CFA, ACCA, CPA charterholders

IT Engineers & Client Advisors

Legal representative: Mr. Nguyen Quang Thuan

Date of establishment: March 11, 2008

FiinGroup (previously known as StoxPlus) is a Vietnam’s leader in financial data analytics, market research and independent

credit rating service

Auditor: PricewaterhouseCoopers

Strategic Partners:


Corporate Structure

We are operating in four main domains of knowledge offering information services from technology-based analytics to

analyst-based insights

FiinGroup Joint Stock Company

Vietnam’s leading integrated service provider of financial data, business information, industry research and other premium services.

Financial Information

The Largest and Most Innovative

Financial Information Provider

Business Information

The Most Innovative Business

Information Platform

Market Research

The Most Trusted Independent

Research House

Comprehensive and In-depth Financial

Database & Analytics for analysts and

researchers

Powerful Trading Information & Analytics

Platform for Brokers, Traders and Active

Investors

API Datafeed

Securities Data Solutions to Client’s

designated system via XML or API

Business Report

Report service for risk management, sales

leads, partner screening, due diligence

and so on

Corporate information platform which

maps out relationships between

companies and persons

Industry Report

Insightful reports for all key sectors of

Vietnam under paid publications ready to

use

Customised Research

Customised research at client’s request

including data analysis and on-the-

ground surveys

Market Entry Advisory

Experienced and seasoned professionals

to support clients expanding market in

Vietnam

Business Information and Risk Platform for

Vietnam

Credit Rating Agency

The Most Trusted CRA for both

Issuers and Investors


Business Portfolio

FiinGroup offers a wide range of services to build a financially credible community in Vietnam as its mission “Enlighten the

market” and support investors and enterprises grow their businesses and gain competitive advantage.

▪ FiinPro Platform

▪ FiinTrade Platform

▪ API Datafeed

▪ Business Evaluation Report

▪ FiinConnex Platform

▪ FiinGate Platform

▪ BI Analytics

▪ Issuer Credit Ratings

▪ Instrument Credit Ratings

▪ Corporate Rating Report

▪ Credit Evaluation

▪ Industry Report

▪ Customised Research

▪ Business Due Diligence

▪ Market Entry Advisory


We have 12 years of journey with few important milestones of development

Development History

2008

Established

StoxPlus JSC as

a stock market

information portal

by three ex-PwC

founders

August

2013

Signed MOU with

National Financial

Supervision

Commission (NFSC)

for data exchange

cooperation

September

2014

Entered a strategic

alliance with

NIKKEI and QUICK

from Japan

May

2015

Launched FiinPro

as the financial

database in

Vietnam

July

2016

Signed MOU

with SSC and

HOSE for

cooperation in

market

development

January

2017

Accepted as

Authorised Data

Vendor and Partner

with Vietnam

Enterprise Registration

Information Centre

under MPI of Vietnam

March

2018

Joined as a full

member of

Business

Information

International

Association (BIIA)

February

2019

Renamed from

StoxPlus to FiinGroup

October

2019

Launched

FiinTrade as the

first trading stock

information

platform in Vietnam

March

2020

Launched FiinConnex

as the first corporate

intelligence platform in

Vietnam

May

2020

Launched FiinGate as

the first business

information analytics

platform in Vietnam

June

2020

Launched Fiin Ratings

as the trusted Credit

Rating Agency in

Vietnam


Senior Management

Our forward-looking leadership team is made up of dedicated, focused and expertise professionals who previously worked

in the world’s largest consulting firms, banks, investment companies in the UK, Australia and Vietnam.

Board of Directors

Thuan Nguyen, FCCA

Chairman and CEO

Co-founder of FiinGroup

previously working as an

investment manager of

Vietnam Holding Asset

Management Ltd and

manager at PwC Vietnam &

Sydney

Hieu Nguyen, MBA

Vice Chairman

Co-founder of FiinGroup

previously working as a

specialist at the Department

for International Development

of UK (DFID) in Vietnam. and

Consulting Manager at PwC

Vietnam

Yoichi Noor Iwamoto

Board Member

Representative of NIKKEI Inc.

at FiinGroup. He is currently

Managing Director of NIKKEI

CHINA (Hong Kong) Ltd.

Chiharu Kawai

Board Member

Representative from QUICK

Corp at FiinGroup. He is

currently General Manager of

Global Business Department

at QUICK Corp.

Bolat Duisenov

Board Member

CEO of Kusto Group Vietnam

– a private equity fund with

AUM of US$300M operating

in Vietnam.

Huy Mac, CPA, FCCA

Board Member

A well-known financier with

Lehman Brothers and KPMG.

Recently he was CEO of KB

Securities (Vietnam) and ex-

DCEO of MB Securities.

Dong Le, CFA

Director,

Market Research

Managing Research and

Consulting division.

Previously Senior Investment

Manager at BIDV-Vietnam

Partners Investment

Management with AUM

$100m and before that an

Audit Manager at Deloitte

Vietnam

Trang Truong, MBA

Sr. Managing Director,

Financial Information

Managing financial

product innovation and

oversight data

acquisition and

analytics. Trang joined

as a junior since the

start of the company

Tu Nguyen, MBA

Director, Credit

Rating Service

Managing risk

product innovation

and overseeing credit

report services.

Previously Senior

Auditor at KPMG and

Team Lead at IB at

TPBank

Executive Team

Trung Bui

Deputy Chief Technology

Officer

Managing IT and Project

Innovation. He designs

and develops the data

system and products at

FiinGroup. Trung joined

as a junior since the start

of the Company


Credit Rating

Service

1. Overview

2. Service Offerings

3. Rating Professionals

4. Why Fiin Ratings?

5. Track Records

6. Sample Report

7. Rating Process


We are operating Credit Rating Agency services under Fiin Ratings, as a part of FiinGroup’s business.

• Fiin Ratings, a brand and part of FiinGroup, licensed by the Ministry of

Finance to operate as a Credit Rating Agency (“CRA”) for Vietnam.

The license was awarded on 20 March 2020 to FiinGroup under the

Decree 88/2014/ND-CP dated 26 September 2014 governing Credit

Rating Agency services.

• Fiin Ratings is the second licensed CRA business in Vietnam and we

focus on below services:

Bond Credit Rating;

Issuer Credit Rating; and

Credit Assessment Report;

Credit Evaluation Service.

• Fiin Ratings focuses on credit rating for issuers and its instruments

such as bonds, corporate ratings and related services for investors

and creditors. Prior to expanding in credit rating services, FiinGroup

is well known in Vietnam as an independent information provider in

the country with financial information terminals, business information

portals and market research to support foreign and local institutional

investors and foreign trading partners to Vietnamese enterprises.

1. Overview


2. Service Offering

Client Target Service Description

Issuer Credit Rating Fiin Ratings also offers an independent opinion of your organization's overall creditworthiness: Fiin

Ratings’ Issuer Credit Rating provides your credit credential - an independent opinion of your organization's

overall creditworthiness and financial strength. It can be used as an information tool for capital markets

participants and your organization's counterparties-banks, clients, suppliers, joint-venture partners, brokers,

government agencies-even landlords.

Bond Credit Rating We provide a forward-looking opinion of an obligor’s creditworthiness: A Bond Credit Rating takes into

consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement on the

obligation. The opinion reflects our view of the obligor's capacity and willingness to meet its financial

commitments as they come due, and may assess terms, such as collateral security and subordination, which

could affect ultimate payment in the event of default.

The Bond Credit Ratings can be either long-term or short-term: Short-term ratings are generally assigned to

those obligations considered short-term which means obligations with an original maturity of no more than 365

days-including commercial paper. Short-term ratings are also used to indicate the creditworthiness of an obligor

with respect to put features on long-term obligations. Medium-term notes are assigned long-term ratings.

Credit Assessment Reports Leveraging on our corporate database for all registered enterprises in Vietnam and our industry benchmarks,

we offer credit assessment service for both report orders or customised assignment to support your credit

decisioning.

Credit Evaluation Services We have conducted various independent credit evaluation for financing decisions by our clients in various

sectors including consumer finance, cement, retail, and education. Our credit analysts and risk experts can also

deliver various related services such as Credit Evaluation and trainings to corporates, investors or creditors on

relevant topics.

Our rating and related services are described as below


Our analytics team comprised of 20+ professionals including researchers, credit analysts, data & modelling

analytics experts.

Tu Nguyen, MBA

President

Credit Rating Service

Mr. Tu is currently the Director of Credit Rating Services of FiinGroup. He joined as a Lead of FiinGroup’s Business

Information Service since 2017. Before that, he was Head of Analyst Team at Investment Banking of TPBank and

previously a Senior Auditor of KPMG Vietnam. He has had extensive experience in independent credit appraisal and

market research projects for FiinGroup’s clients for many years and has managed a team of more than 30 risk analysts

for commercial credit.

Mr. Tu holds a Master of Business Administration from University of Pisa, Italy.

3. Rating Professionals: Rating Analysts

Prachi Gupta, MMS

Manager

Financial Institution

Ratings

Ms. Prachi Gupta is a Credit Research and Credit Ratings Professional with an overall experience of 10 years at India’s

leading ratings agency, CRISIL Ltd (a subsidiary of American company, S&P Global). In her role at CRISIL, she was

primarily responsible for managing projects and leading a team of qualified finance professionals engaged in analytical

execution and rating surveillance of financial sector entities. Ms. Prachi has also been a rating committee member and

has good experience in client management and investor outreach. Ms. Prachi is now engaged with Fiin Ratings as an

advisor and offers support to analytical team on the entire rating process.

Ms. Prachi received a Bachelor of Commerce in 2002 and a Master of Management Studies in 2004 from University of

Mumbai. Recently, she has also got an Advanced Certificate in Sustainability and Sustainable Businesses from

Singapore Management University.

Mr. Khang has over 10 years working in Finance and Banking. He spent 3 years working as Senior Auditor at KPMG

Vietnam and 3 years as Finance Manager at Investment Department of TPBank. Before joining Fiin Ratings, he worked as

Finance Manager at Toong – The Open House Company which is well-known as the pioneer in co-working space field in

Vietnam. In which, his responsibilities was formulating strategic direction, developing new business models and cultivating

business partnerships. Mr. Khang is a multi-skilled person with excellent knowledge of Finance and Accounting and

experience in Project Management.

He completed his Bachelor of Finance and Banking from National Economics University in 2011.

Khang Le

Manager

Credit Risk Analytics


Our analytics team comprised of 20+ professionals including researchers, credit analysts, data & modelling

analytics experts.

Trang is an Associate at Credit Risk Analytics of Fiin Ratings, who has an excellent knowledge of Mathematic and Model

innovation. She is currently responsible for credit scoring, credit exposure analysis and risk management solutions for

Fiin Ratings’ clients. Before joining Fiin Ratings, she led a team of business research and data analysts of Business

Information Service at FiinGroup providing in-depth standard and comprehensive business reports for big clients from

Japan, Singapore, Hong Kong, etc.

Trang graduated from Hanoi University and has qualified globally recognized Financial Risk Management (FRM) part I

Certificate.

Trang Pham

Associate


Tam Tran, MSc

Associate


Tam is currently an Associate at Credit Risk Analytics of Fiin Ratings covering both corporate sector and financial sector.

Before her secondment to Fiin Ratings, she was a Lead data analyst at Business Information Service at FiinGroup since

2018 when she managed a team covering credit and business evaluation reports supporting cross-border trade and

insurance. Before joining FiinGroup, she worked as a Credit Appraisal Officer at Maritime Bank.

Tam graduated from Hanoi University with major in Banking and Finance. She then obtained a Master Degree in

Accounting and International Finance at Deakin University, Australia.

3. Rating Professionals: Rating Analysts

Hoang Nguyen, CFA

Senior


Hoang is currently a Senior Associate at Credit Risk Analytics of Fiin Ratings. He has spent over 7 years of experience in

equity coverage, financial analysis and auditing. Before joining credit rating career, he was a Senior Equity Analyst at

FPT Securities for 5 years covering various sectors including Steel, Cement and other industrial sectors.

Hoang graduated from RMIT in 2014 and then had 2 years as an Auditor at KPMG. He has completed Chartered

Financial Analyst program (US) and become CFA Charterholder since 2018.

Hiep is currently an Associate at Credit Risk Analytics of Fiin Ratings, who has a knowledge background of most of

commercial and manufactural sectors in Vietnam. Previously, he was mainly in charge of reviewing and supervising

comprehensive business reports before delivering to clients of FiinGroup’s Business Information Service. Additionally, he

has experience in processing, automating data entry and credit scoring process.

He holds a Bachelor Degree in Business Administration from International School – Vietnam National University, Hanoi

and has passed level II of the Chartered Financial Analyst Program (US).

Hiep Nguyen

Associate



3. Rating Professionals: Rating Committee

Rating Committee Members and Experts comprised of seasoned professionals in credit decisioning, corporate finance, investment and

credit rating. Committee members work on-call basis depending on their expertise and conflict-of interest clearance

Le Anh Thi, MBA FCCA

Rating Committee Member


Mr. Thi has over 22 years in audit,

investment and corporate finance

operations. He is previously CFO of SEAF

Fund Management and several companies

in constructions and real estate business

form 2012-2019. Mr. Thi used to be DCEO

of Au Viet Securities Company. From 1998 –

2002, he was audit supervisor with PwC VN

and then investment executive at the

Vietnam’s leading private equity fund

Mekong Capital. Mr. Thi completed his

Bachelor of Economics from National

Economics University in 1998 and then

obtained Master of Commerce with Major in

Finance and Banking at The University of

New South Wales, Australia in 2005.

Tran Viet Duc, CPA



Mr. Duc is currently Managing

Partner of IDG Ventures Vietnam

based in Hanoi. Before that he

was deputy general director of

Deloitte Vietnam (previously

VACO) from 1991 to 2005. He

completed his bachelor in

economics at National Economics

University in Hanoi and got his

MBA from Taxas University. He is

also the first who obtained CPA

from the Ministry of Finance of

Vietnam

Pham Duy Hieu



Mr. Hieu is currently chairman of

Vietnam Startup Foundation, a not-for-

profit organization established to

support startups and innovations in

Vietnam the region. Previously, Mr.

Hieu was CEO of ABBank, tier 2

commercial bank in Vietnam from

2013 - 2020. Before that he was CEO

of Viet A Bank, CFO of Geleximco, a

diversified business group based in

Hanoi. He started his career in 1999 as

credit officer with Vietcombank

Leasing and then investment

executives with Sabeco Fund

management and few securities firms.

Khong Van Minh, MBA



Mr. Minh has 24 years working in the

banking and finance sector in

Vietnam. Mr. Minh is concurrently

the Head of Supervisory Board of

Hiep Phuoc Industrial Park JSC in

Ho Chi Minh City. With 10 years of

experience working at Jaccar

Holdings Fund Management

Company and Service Company To

Foreign Missions (Fosco). Currently

he is a professional advisor and

directly involved in the rating

process. Mr. Minh received his MBA

in 2003.

Nguyen Thi Lan, CFA



Ms. Lan joined FiinGroup in June 2020 as

a member of the Credit Rating

Committee. Ms. Lan is concurrently the

Deputy General Director of VietinBank

Fund Management Company Ltd. and has

many years of experience as an

Investment Analyst at Chien Thang

Securities Investment Fund Management

JSC. Ms. Lan received her Master's

degree from the University of New South

Wales in 2005.

Paul Coughlin

Advisor and Rating Committee

Member


Mr Coughlin spent 26 years with S&P

Global Ratings working in all analytical

segments of the business and was

based in Australia, then HongKong

followed by Singapore. He was

promoted to global leadership of the

Corporate & Government based in

New York in 2005 and after the

Financial Crisis the Structured

Finance group was also placed under

his supervision. He was at the that

point and until 2015 globally

responsible for all credit rating

activities of S&P.


4. Why Fiin Ratings?

Fiin Ratings is well prepared and positioned to bring benefits to issuers, investors and all related stakeholders

Experienced credit

decisioning

practitioners and

professionals

Built up from

outstanding research

capabilities

Strong Investor

Base

Track records in

Credit Scoring

• Our team comprised of

seasoned professionals

at both rating committee

level and rating analyst

level.

• They are all practitioners

and experienced in

credit decisioning and

scoring at the local

business context and

credit rating from

developed market via

technical support from

international technical

advisors.

• Our rating

methodologies have

been developed and

improved from our 10-

year expertise in

industry research and

data analytics;

• We are a pioneer in paid

service for market

research and industry

studies for key sectors

and sub-sectors of

Vietnam;

Industry Analytics

and Benchmarks

• Analytics models and

data benchmarks are at

the heart of any rating

models. We are very

proud of being the first

in Vietnam occupying

such models and

benchmarks which is

built up from our data-

mining works over the

last 12 years;

• We are continuously

developing such models

and rating benchmarks

• Before expanding to CRA,

we have worked for 5

years in corporate credit

evaluation and scoring

under our Business

Information Service under

data analytics platform

and on-call request for

both credit and trade

credits

• We produce around 5

thousand credit reports

on Vietnamese

companies per year for

our international clients

• We have a great network

of local and foreign

financial investors

including asset managers,

insurance firms, banks,

and corporate investors;

• This is our special

advantages for corporate

issuers in diversifying the

funding source.


Our credit rating capacity has been certified by Vietnamese Government Agencies during the CRA licensing

process for FiinGroup

5. Relevant Track Record

No Project Customer Customer Purpose Assignment DescriptionCompletion

time

1 Vietnam

Banking and

Finance -

Periodic

Review

The World Bank Financial stability is an

important factor for World

Bank's concern on agenda

with the Vietnamese

government, especially

after the 2008-2010

financial crisis.

FiinGroup is the only unit designated in the form of "Single

Source of Information" to periodically support World Bank in

this project. The scope of work includes (i) data analysis and

(ii) quarterly review of banking sector performance, non-

banking firms, bond market, equity market, macroeconomics

and related factors which contain potential risks that affect the

safety and sustainability of the financial system.

FiinGroup conducts reports and presentations, sometimes with

World Bank, on important issues for the State Bank of Vietnam.

Ongoing.

quarterly and

annually. The

project

started in

2015

2 Credit

Assessment

Review

Supporting FE Credit in

working with their creditors

for financing

We were engaged by FE Credit, the largest consumer finance

company in Vietnam to conduct an independent credit

assessment. The report was used by FE Credit for their design

of financing plan and negotiation with theirlocal and

international creditors.

June 2019

3 Vietnam

Consumer

Finance -

Periodic Report

For their strategy, planning

and operating

Vietnam Consumer Finance Report is FiinGroup's semi-annual

in-depth reporting series and is used mostly by key players in

industries, related financial institutions operating in the

industry, and sponsors for consumer finance companies such

as investment funds, banks, insurance companies and foreign

credit institutions.

Ongoing half-

year

4 Corporate

Credit Scoring

Counterparty credit risk

identification

Trade credit insurance

premium pricing

KYC Support and Credit

Risk Control

Corporate Credit Scoring is one of the key services FiinGroup

deployed since 2014.

FiinGroup produces approximately 10,000 appraisal reports

per annum semi-automatically through the technology system

and scoring model, as well as manually by a credit risk team

Ongoing


We also have a track record in various credit assessment engagements relating to financing Vietnamese enterprises

5. Relevant Track Record

No Project Customer Customer Purpose Assignment DescriptionCompletion

time

5 Independent

credit appraisal

on the project

for a 1.5 Mt/yr

cement

production

capacity

expansion

Xuan Thanh Cement

Joint Stock Company

(Ninh Binh Province)

Conduct an independent

assessment for a loan of

US$100 million to finance for

a 1.5 Mt/yr production

capacity expansion project in

Ninh Binh Province

FiinGroup was appointed by VietinBank to work with Xuan Thanh

Cement., Jsc to conduct:

• Research and assessment on Vietnam cement industry

prospect, focusing on supply in the Central and consumption

market in the South.

• Independent appraisal and credit rating of a business in the

cement industry in Vietnam

• Providing report on Xuan Thanh Cement and supporting credit

financing decision of Vietinbank

June 2018

6 Market and

credit appraisal

to finance M&A

in a fashion

retail chain –

ELISE

Japanese Investment

Fund - Advantage

Partners (AP)

Raising fund for M&A

transaction to buy 70%

shares of ELISE fashion chain

with a valuation of more than

VND1,000 billion

In addition to its self-financing capital, Advantage Partners raised

fund for transaction from Meritz Investment Bank (Hong Kong)

• FiinGroup was hired by Advantage Partners to conduct an

independent assessment of the fashion retail industry in

Vietnam and Business Due Diligence of ELISE to serve the

investment decision of Advantage Partners and the investment

bank in financing this transaction

• In addition to the market appraisal, FiinGroup also worked

independently with the Bank financing this deal

February 2019

7 Stainless Steel

Market

Appraisal

Viet Duc Steel Joint

Stock Company (Binh

Duong Province)

Viet Duc Steel expands a

stainless-steel factory with a

capacity of 300,000 tons/year

in Dong Nai

Viet Duc Steel approached BIDV for a loan to finance the project.

However, BIDV required an independent assessment of the

market potential and a credit score of Viet Duc Steel to make

decision.

With the designation of BIDV, Viet Duc Steel hired FiinGroup to

conduct a detailed appraisal and assessment on (i) the stainless-

steel industry in general and (ii) the feasibility of the project in

particular. The analysis team of FiinGroup presented assessment

to leaders of Viet Duc Steal and BIDV to refer and make a decision

to finance the project.

June 2017


6. Sample Rating Report: Issuer Rating

Rating Deliverables at Fiin Ratings are subject to rigorous quality review by highly qualified credit analysts

and rating committee


6. Sample Rating Report: Sample Rating Snapshot

Assigning a rating scale to a scorecard factor will be based on our industry benchmark data, calibrated historical

probability of defaults and our credit assessment

ABC INVESTMENT JSC

Retail Industry Rating Factors Current Outlook

As of 31-12-2018 As of 31-12-2019

Factor 1: Business Profile (25%) Measure Score Measure Score

a) Stability of Product Baa Baa Baa Baa

b) Execution and Competitive Position Baa Baa Baa Baa

Factor 2: Business Scale (10%)

a) Revenue (VNDb) 86,516 Aaa 102,868 Aaa

Factor 3: Profitability (10%)

a) EBITDA margin (%) 5.9% A 6.6% Aa

b) FAT 25.7x Baa 23.5x Ba

Factor 4: Leverage & Coverage (40%)

a) EBIT / Interest Expense 8.9x A 8.8x A

b) Retained Cash Flow / Net Debt -5.9% Ca -73.6% Ca

c) Debt/EBITDA 1.4x Aa 2.09x A

Factor 5: Financial Management (15%)

a) Solid credit and financial profile A A A A

RATING

Baseline Credit Assessment Baa+ A-

Default Dependence Low

Support Low

Final Rating Baa+ A-


7. Rating Process

STEP 2: Due Diligence

& Analysis

Conduct Due Diligence

Interview

Conduct Preliminary Data

Analysis

Credit

Analyst

Team

Receive request

for Credit Rating

from the Issuer

Sign Credit Rating

Engagement Agreement

with the Issuer

KYC

Accept the

request

STEP 1: Preparation – Engagement Agreement with the Issuer/ Entity

Send the request for

information to the issuer

along with a defined

FormatClient

Coverage/ DB

YES

STEP 3: Identify Principal

Risk Components (PRC)

Further processes

and analyses

the Data & makes

Inter-Firm

comparison

STEP 4: Preliminary

Rating

STEP 5: Rating

Determination

• Reviews Rating Report

• Goes through the Rating

materials and report.

• Finalizes the proposed

Credit Rating Credit Rating

Committee

Fiin Ratings Issues

a Press Release

Entering Credit Rating

into the Database

Fiin Ratings Conducts

Surveillance of

Credit Rating

Collecting the

Information and Data

STEP 7:

Rating Announcement

and Records Filing

YESSTEP 6: Feedback and Revaluation

Fiin Ratings Sends

Rating Letter & Rationale

to the Issuer

Issuer Accepts /

Not Accepts The

Rating

Issuer represents

to review The

Credit Rating

NO NO PROPOSAL

CLOSED

Arrives at the rating

and proposes the

same to Fiin

Ratings Credit

Rating Committee

(CRC)

Workflow for a Rating Action to be applied at Fiin Ratings is as follow:


Fiin Ratings

Methodology

1. Master Model

2. Assessment Framework

3. Rating Scale

Our Rating Methodology has been

developed with technical support by

ex-Moody’s experts over the last 3

years. The model is based on our

industry and corporate data employed

by FiinGroup across almost all 56

sectors and sub-sectors of Vietnam


1. Master Model

Financial Risk

Intrinsic Scorecard

Preliminary Rating Range

Issuer Credit Rating

Industry

Risk

Macroeconomy

RiskBusiness Risk

Governance &

Management Risk

ISSUER RATING

Quantitative Factors + Qualitative Factors

Debt Instrument Rating

ISSUE RATING Liquidity Management

Foreign-Currency Related Risk

Financial Controls

Susceptibility to Event Risk

Investment and Acquisition Strategy

+/- Adjustment Factors

Our master rating model is explained as below


Business RiskIndustry RiskCountry Risk Financial RiskGovernance &

Management Risk

Rule of Law Risk

Financial System Risk

National Economic Growth

Government Effectiveness

Risk Appetite &

Risk Management

Human Resources Risk

Financial Management

Competitive Position

Stability of Product

Years in business

Non-financial Factors Score * Weighting Financial Factors *

Weighting

Scale

Profitability & Efficiency

Liquidity

Leverage & Coverage

Competitive Risk &

Growth

Business Cyclicality

Final Score Preliminary Credit Rating Range from Aaa to Ca Mapping to Rating Scales by Probability of Default (PD)

Model can be implemented as a linear scorecard using both financial and non-financial factors and

their associated weightings. Below is the assessment framework used to rate corporates

1. Master Model: Issuer Credit Rating


• Issuer rating: General estimate of the creditworthiness of the Company

• Issue rating: Specific rating for a financial instrument (e.g corporate bond, unsecured debt instruments…)

• The issue rating = Issuer rating +/- Issue notching factors (Qualitative and Quantitative factors)

Recovery Rate

Qualitative

90% - 100% 70% - 90% 50% - 70% 30% - 50% 10% - 30% 0% - 10%

Extensive creditor protection +3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch

Reasonable creditor protection +/- 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch

Inadequate creditor protection (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch (+/-) 0 to 3 notch -3 notch

The issuer rating could be notched up or not notched down maximum 3 notches (1 category) to come up

with the final issuer rating. Issue notching matrix is demonstrated as below:

Issuer Rating

Issue Notching

Factors

Quantitative Factors

Recovery Rate

Issue Rating

Qualitative Factors

Terms & Conditions

Financial

Covenants

Termination

rights

Negative

pledges

Other

Guarantees

Value of

Assets

Physical

Collateral

Ranking of

the issue

Our Model for Issue rating:

1. Master Model: Issuer Credit Rating


Section Factor Definition Trend Weighting

(%)

Measure Factor

Score

Leverage &

Coverage

Adjusted Gearing

(Capital and reserves)

Gross debt excluding long term

Subordinated Debt/ Shareholders Fund.

Descending α1 β1 Aaa - Ca

Adjusted Gross Debt/

EBITDA (excluding

exceptional items)

Gross debt excluding long term

Subordinated Debt/ EBITDA (excluding

exceptional items)

Descending α2 β2 Aaa - Ca

Interest Coverage Ratio EBIT/ Interest expense Ascending … … Aaa - Ca

Cash flow interest cover Net cash after operations/ interest

payable

Ascending …. …. Aaa - Ca

Liquidity Quick ratio (Current assets – stocks) / current

liabilities

Ascending … … Aaa - Ca

Current ratio Current assets / current liabilities Ascending α10 β10 Aaa - Ca

Profitability PBT to Turnover PBT / Turnover Ascending … … Aaa - Ca

EBITDA margin EBITDA / Turn-over Ascending … … Aaa - Ca

Scale Turnover Value in billion VND Ascending αn-1 βn-1 Aaa - Ca

Total assets Value in billion VND Ascending αn βn Aaa - Ca

Below is an example of financial factors used in our credit scoring. Financial factors are scored based on our Rating

Scale from Aaa to Ca.

For corporate, we use a set of 20 – 30 factors to used for various models, data from our database, from government

agencies and from companies.

Financial Factors sample for Non-Financial Companies

2. Assessment Framework: Issuer Credit Rating


Score Range for Real Estate Sector (Residential Sub-Sector) by Fiin Ratings for Vietnam:

Sub-factor

Range

Revenue

(VNDb)

Tangible

Net Worth

(VNDb)

Gross Margin

(%)

EBITDA

Margin (%)

Return on

Capital (%)

Revenue to

Debt (%)

Interest

Coverage

Ratio (x)

Cash to

Short-term

Debt

Coverage (x)

Extremely Low Risk > 1,426 > 2,415 > 46% > 30% > 18% > 761% > 71.0 > 3.19

Very Low Risk 469 – 1,426 823 - 2,415 32 - 46% 20 - 30% 10 - 18% 271 - 761% 14.5 – 71.0 0.94 – 3.19

Low Risk 239 - 469 424 - 823 23 - 32% 13 - 20% 6 - 10% 157 - 271% 5.2 – 14.5 0.37 – 0.94

Medium Risk 117 - 239 228 - 424 16 - 23% 7 - 13% 3 - 6% 94 - 157% 1.7 – 5.2 0.15 – 0.37

High Risk 43 – 117 125 – 228 8 - 16% 1 - 7% 1 - 3% 48 – 94% 0.2 – 1.7 0.07 – 0.15

Very high risk < 43 < 125 < 8% < 1% < 1% < 48% < 0.2 < 0.07

Industry benchmarking data is the core heart of any rating model. We have developed

benchmarks for Real Estate Sector (Residential Sub-Sector) as below



Below is an example of financial factors used in our credit scoring. Financial factors are scored based on our Rating

Scale from Aaa to Ca.

Financial Factors sample for Financial Companies

Factors Sub-factors Sub-factor Weight

Quantitative

Assessment

Profitability Net Income / Average Managed Assets 10.00%

Capital Adequacy and

Leverage

Tangible Common Equity / Tangible Managed

Assets

25.00%

Asset Quality Problem Loans / Gross Loans 10.00%

Net Charge-Offs / Average Gross Loans 10.00%

Cash Flow and Liquidity Debt Maturities Coverage 20.00%

FFO / Total Debt 15.00%

Secured Debt / Gross Tangible Assets 20.00%

Total Financial Profile Score X1 W1

Qualitative Assessment

Economic Strength 18.18%

Institution and Governance Strength 18.18%

Support Consideration 26.37%

Industry Risks & Strengths 36.30%

Susceptibility to Event Risk 9.09%

Total Qualitative Score X2 W2 (=1-W1)

Final Scoring W1*X1+W2*X2 100%

Sample Scorecard for Financial Institutions:



Score Range for Consumer Finance Companies by Fiin Ratings for Vietnam:

Sub-factor

Range

Net Income /

Average

Managed

Assets

Tangible

Common Equity /

Tangible

Managed Assets

Problem Loans /

Gross Loans

Net Charge-offs /

Average Gross

Loans

Debt Maturities

CoverageFFO / Total Debt

Secured Debt /

Gross Tangible

Assets

Extremely Low Risk > 5.5 > 31% < 0.5% < 1% > 300% > 45% 8%

Very Low Risk 2.5 - 5.5% 16 - 31% 0.5 -0.75% 1 - 1.5% 200 - 300% 30 - 45% 8 - 15%

Low Risk 1 - 2.5% 12 - 16% 0.75 - 2% 1.5 - 3% 120 - 200% 20 - 30% 15 - 30%

Medium Risk 0.5 - 1% 8 - 12% 2 - 4% 3 - 5% 60 - 120% 12.5 - 20% 30 - 45%

High Risk 0 - 0.5% 4 - 8% 4 - 7% 5 - 8% 40 - 60% 5 – 12.5% 45 - 60%

Very high risk < 0% < 4% > 7% > 8% < 40% < 5% > 60%

Industry benchmarking data is the core heart of any rating model. Below is sample benchmarks

for Non-Bank Financial Institutions (Consumer Finance Sub-sector) as below



Factor Section Clarity text Weighting

(%)

Available

response

Score

Year in

business

Business Risk The length of time a company has been in

business can be valuable in determining the

strength of its “staying in power” and quality of

management, particular if this has covered one

ore more periods of economic of business

downturn.

α1 > 20 years

11 – 20 years

4 – 10 years

1- 3 years

Start-up

Aaa

TBC

TBC

TBC

Ca

Financial

Management

Governance &

Management

Risk

Consider the following when making decision:

• Experience and qualification of the Finance

Director and predecessors compared to the

size and complexity of the business.

• The strength of the finance and treasury

function’s voice in the overall management

team.

• The professionalism of dealing with banks.

If there is evidence of either the company’s

auditors resigning and refusing signing off the

accounts OR there has been frequent change in

auditors …..

α2 EXCEPTIONAL

ABOVE AVERAGE

AVERAGE

BERLOW

AVERAGE

INDEQUATE

Aaa

TBC

TBC

TBC

Ca

Non-financial Factors sample for Non-Financial Companies

Below is an example of non-financial or qualitative factors used in our credit scoring. Non-financial factors are

scored based on Fiin Ratings Scales from Aaa to Ca.



3. Rating scale: Rating Scales vs. International

A national CRA will help remove the rating compression by Global CRAs in assigning

Vietnamese issuers and its instruments

Vietnam Definition Global

Definition

Global Scale 1 Global Scale 2

Extremely strong capacity to meet

financial obligation

Aaa Highest

Grade Credit

Aaa AAA

Very strong capacity to meet financial

obligation

Aa+

Very High-

Grade Credit

Aa1 AA+

Aa Aa2 AA

Aa- Aa3 AA-

Strong capacity to meet financial

obligations but somewhat susceptible

to adverse economic conditions and

changes in circumstances

A+

High Grade

Credit

A1 A+

A A2 A

A- A3 A-

Moderate capacity to meet financial

commitments but more vulnerable to

adverse developments and economic

conditions

Baa+

Good Credit

Grade

Baa1 BBB+

Baa Baa2 BBB

Baa- Baa3 BBB-

Low capability to meet financial

obligations but speculative elements

Ba+

Speculative

Grade

Ba1 BB+

Ba Ba2 BB

Ba- Ba3 BB-

Weak capacity to meet financial

obligations. Sensitive to business,

financial and economic conditions.

High risk.

B+Very

Speculative

Grade

B1 B+

B B2 B

B- B3 B-

Very weak capability or very likely to

get into default. Very sensitive to

business, financial and economic

conditions. Substantial risk.

Caa+

Substantial

Risk

Caa1 CCC+

Caa Caa2 CCC

Caa- Caa3 CC

Ca Ca C

This is basically the “Blind Area” for

all Vietnamese issuers and its

instruments who are subject to Global

Scale Ratings

Head Office

10th Floor, Peakview Tower,

36 Hoang Cau, O Cho Dua, Dong Da,

Hanoi, Vietnam

Tel: (84-24) 3562 6962

Email: [email protected]

Ho Chi Minh City Branch

3rd Floor, Profomilk Plaza Building,

51-53 Vo Van Tan, Ward 6, District 3,

Ho Chi Minh, Vietnam

Tel: (84-28) 3933 3586

Email: [email protected]

mailto:[email protected]

mailto:[email protected]

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