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Harry Mao

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Submitted By chende111
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INDIVIDUAL PROJECT PAPER (10%)

GSM 5421 – INVESTMENT ANALYSIS

MINI-CASE STUDY:

You have recently met up with an old friend, Mr. Harry Mao at a shopping mall in Kuala Lumpur. He mentioned that he has recently graduated with a PhD in Electrical Engineering and has no working experience. Fortunately (or rather unfortunately) as the only child, he just inherited his late father business.

The company is involved in construction. The company has just completed a large development project in KL and is in the midst of securing a government construction project through private financial initiative (PFI - company will build with own source of funding and government will pay later). Being a conservative businessman, his late father kept almost all the company reserves in cash (RM30 million), owned a few parcel of agricultural land in Malaysia (book value at RM40 million) and 5 shop-lots (commercial properties) in several parts of Kuala Lumpur. The total estimate market price of the whole commercial property is about RM20 million. Currently, the 4 commercial properties are generating a total rental income of RM120,000 a year. Besides that, they have 5 units of apartments in Australia which are currently rented out to Monash University students at a rental rate of AUS$60,000 a year.

The company also owned a building (market value RM3.5 million) that is being used as their corporate office and some other office equipments, cars and heavy machineries value at RM2 million. The company does not have long-term debt asides from a small revolving bank credit of RM5 million.

You mentioned that you are about to complete your MBA in one of the top business school in Malaysia. As Mr. Harry Mao is financially naïve, he sought your advice on investment analysis and what he should do.

Please read the above case carefully and prepare the following:

i. briefly assess and discuss his investment portfolio; ii. advice him on financial assets available for investment; iii. likely method of funds raising to finance PFI project; iv. company/industry/economic analysis as well as some brief theoretical aspect of investment to help him understand better. v. Strategies for his company’s sustainable growth in the future vi. Your recommendation and why?

The project paper should not be more than 10 pages with ARIAL font size minimum 12” and 1-1/2 paragraph spacing. You can make some assumptions, such as financial position of the company going forward. Please quote your reference sources. The paper needs to be submitted on the last day of lecture of the semester.

“No matter what a person past may have been, his future is spotless”

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