UPCOM:VAV

• Beneish M-Score -0.2647 (measures the likelihood of earnings manipulation; the company is in the 92nd percentile vs Vietnamese peers and the M-Score rose by +2.01 year-on-year, indicating an upward trajectory in the manipulation signal).
• AQI (accrual quality index) = 4.9745 (measures unusual accrual patterns; this very high value is a primary contributor to the M-Score increase).
• DSRI (days' sales in receivables index) = 1.1795 (measures growth in receivables relative to sales; a value >1 can signal revenue recognition or collection issues).
• Receivables quality = 24.1/100 (measures the quality and collectability of receivables; this low score is consistent with the elevated DSRI).
• Margin quality = 29.0/100 and Revenue quality = 41.9/100 (both low, indicating margins and reported revenues may be of lower quality).
• Piotroski F-Score = 2/9 (measures nine fundamental signals of financial strength; a score of 2 indicates weak operating and financial fundamentals).
• Earnings-quality Cash conversion component = 62.3/100 and three-year cash conversion (operating cash flow / net profit) = 1.29 (57th percentile) — profits are not converting strongly into operating cash relative to peers.

• Altman Z-Score = 4.23 (measures distance to bankruptcy using balance-sheet and earnings items; this places the company in the safe zone on that metric).
• Accruals quality = 88.0/100 (measures how much earnings are driven by accruals vs cash; a high score suggests relatively better accrual reporting quality).
• Receivables outside the trade cycle = 0.6% of total assets (26th percentile) (measures non-trade receivables such as loans, long-term receivables or prepayments; the low percentage reduces concern about large off-cycle receivables).
• No accumulated losses and zero consecutive years of parent net loss up to FY2025; owner's equity (excluding minority interest) is positive (these are direct balance-sheet facts showing retained earnings and equity are not in deficit).

The listed parent VCG holds 51.0% (control) as of 2026-06-30, with two other state/utility-style institutional holders (Công Ty TNHH Một Thành Viên Nước Sạch Hà Nội 23.7%, Công ty Cổ phần Đầu tư Nước sạch Sông Đà 15.1%) giving a concentrated ownership profile dominated by the state-linked group. Several other operating subsidiaries are held by the same parent, indicating potential group transactions and related-party flows to check.

• Compare the growth in trade receivables and the DSRI drivers: inspect the receivables note and the revenue recognition policy in the FY2025 annual report to reconcile revenue growth with receivable growth.
• Compare operating cash flow and components in the cash-flow statement with net profit: trace reconciling items (changes in working capital, non-cash expenses) that produce the three-year cash conversion ratio of 1.29.
• Review the note(s) on related-party transactions, loans to/from affiliates and 'other receivables' to verify the composition of the 0.6% of assets classified as receivables outside the trade cycle.
• Examine the accrual-related line items (provisions, depreciation, deferred revenue, and inventory accounting) and the auditor’s report to understand the drivers of the high AQI (4.9745) and the accruals-quality score of 88.0/100.