...Smelting Corporation Bhd • On 23 July 2013, Kinsteel Bhd obtained exclusive rights with KDYMM Sultan of Pahang to carry out mining operation of all types of iron ore and other minerals at Kuala Lipis 20 4 1 • Perwaja Holdings Bhd’s mining venture is still pending the final official award of iron ore mining concession in Bukit Besi from the Terengganu state government • Previous listed mining companies that have changed their core business: Listed Oil & Gas Companies Selangor Dredging Bhd Kuchai Development Bhd MMC Corporation Bhd Petaling Tin Bhd Exploration & Production Support Services (engineering, procurement, offshore drilling, equipment etc) 24 companies Shell Refining Company (Federation of Malaya) Bhd - one of the few listed in 1960s On 29 July 2013, UMW Oil & Gas Corporation Bhd received approval to list Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies Page 2 Mining and Oil & Gas Listings on Bursa Malaysia (Cont’d) No. of New IPOs for Oil & Gas Related Companies 8 6 4 2 0 2 2 No. of New IPOs 4 5 8 Source: Bloomberg Listings and IPOs on Bursa Malaysia for Mining and Oil and Gas Companies Page 3 Dearth of Mining Companies? • There are many non-listed mining companies… Iron Ore Ibam Mining Sdn Bhd Tajau Makmur Sdn Bhd Vetill Minerals Sdn Bhd Terengganu Anshan Iron & Steel Sdn Bhd HWG Tin Mining Sdn Bhd (part of Ho Wah Genting Bhd: Bursa) S.E.K. (M) Sdn Bhd Rahman Hydraulic Tin Sdn Bhd (part of Malaysia...
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...Jeffrey Cheong Board of Director of HCF Sdn Bhd From : Teoh Chin Teh Operations Director of HCF Sdn Bhd Subject : Concern of closing down the company ------------------------------------------------- Objective The purpose of this memorandum is to convey the issue that having in HCF Sdn Bhd and also related to closing down the Malaysian operations to the Board of Directors. ECF Sdn Bhd having some major issue in the company but as an Operation Director I would like to highlight the pertinent issues related to closing down the Malaysian operations and also I can recommend the action plan that management can consider incorporating into his report to the Board of Directors. Issues In analysing the issues in HCF Sdn Bhd, One of the main causes of the problem might be due to the potential China market growth which is very favourable for business premises who wants to increase their profit margin by lowering their cost. Low labour cost means lower operating expense, generating more profit. The economies of scale which only could be achieve this way, is also one of the main attraction to cause this problem. Furthermore, the relaxation of trade barriers between countries also contribute to this problem of outsourcing to the best potential lowest country of production, which as off now, is China. The lesser the restrictions, the easier it is to outsource. The main issue of the company is the fact that Jeffrey Cheong is not sure whether to move the HCF operations to China or just manufacturing...
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...Haute Couture Fashions Sdn Bhd need to adjust their business strategy, as China textile industry becoming a potential threat to it as its two major customers are now thinking of outsourcing to China for its lower operating cost. The management need to decide whether to move its operation to China or exit from contract manufacturing activity and stand on its own new created brand. It is recommended for Haute Couture Fashions Sdn Bhd to move their operations wholly by itself to China and halt their current local operations, to secure its existing customers, and attract new potential customer in the long run. Although it might seems as a big investment in the short term, but in the long term period, Haute Couture Fashions would enjoy the profit made by this big investment of today. Problems The management of Haute couture Fashions Sdn Bhd needs to make quick adjustment to their existing business strategy due to the emergence market of China in the textile industry. Many of the manufacturers from European and American market are changing their contract manufacturer to China due to its potential low operating cost. In the short term period, Haute Couture Fashions Sdn Bhd, HCF might lose its two major clients, which made up 44.2% of its sales annually. On the other hand, if no changes being implemented, in the long run, HCF might suffer even more, when all of its clients follow those steps, outsourcing to China. Potential alternative decision to be made by HCF management: 1) Expand operation...
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...that I can analyzed. Firstly, Kiki and Houida which are two of major loyal customers of Couture Fashions Bhd (HCF)’s were writing to Jeffrey to inform him that they may looking to China to “contract manufacture” for them as the prices there were very competitive. Second, the previous adverse perception of “Made in China” labels had slowly changed as China now manufactured clothes that are higher quality at substantially lower operating costs. There were some recommendation that are going to implemented which are proposal to expand to China, proposal to close down HCF’s factories in Malaysia and Thailand or manufacturing its own label for Malaysian and Asean market. Statement of Problems HCF may lose their big major loyal customers which is Kiki and Houida as they may looking to China to “contract manufacture” for them as the prices there is cheaper. Apart from that, nowadays China was produce high quality product with cheaper price so then makes the perception of people about the “made in China” goods changed to a good view. This is because of the labour cost in China is cheaper rather than Malaysia. HCF now is very confusing to make decision but based on the problems they have to make accurate decision. According to these problems they have to deeply make consideration of their short term and long terms decision. As far as I am concerned, the short term problem is HCF may lose their big major loyal customers which is Kiki and Houida. For long term, they may face a very big...
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...INTEGRATED CASE STUDY REPORT ON CASE STUDY NO 4: CHINA DOLLS Question 1 Based on the financial information given in Appendix A, what is HCF’s current financial position, how it is performing, perform ratio analysis to assess its current financial position and financial performance. (a) HCF’S Current Financial Position. (b) How HCF is performing. * Falling margins and profits * Revenue decreased by 7.7% (RM10mil) but COGS increased by 6.5% (RM4740mil) in 2008 * Operating profit decreased by 67% (RM9240mil) in 2008 * Increase in current liabilities * Trade payables increased by 92% (RM6654mil) * Overdraft increased by 86% (RM1415mil) PROFITABILITY | FORMULA | YEAR 2008 | YEAR 2007 | Return on Capital Employed (ROCE) | EBITNET ASSETS ×100 | 330054841 ×100=6% | 1259049437 ×100=25.47% | Profit Margin | EBITNET NET SALES×100 | 3300120000 ×100=2.75% | 12590130,000 ×100=9.68% | Return on Assets | NET PROFITTOTAL ASSETS×100 | 244272661 ×100=3.36% | 919161729 ×100=14.89% | Gross Profit Margin | GROSS PROFIT SALES×100 | 42750120000 ×100=35.63% | 57490130000 ×100=10.65% | Operating Profit Margin | OPERATING PROFIT SALES×100 | 4600 120000×100=3.83% | 13840 130000×100=10.65% | * Resulting in overall increase of current liabilities by 45% (RM5528mil) RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. PROFITABILITY * ROCE To measure of...
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...Case Study : China Doll INTEGRATED CASE STUDY REPORT ON CASE STUDY NO 4: CHINA DOLLS Question 1 Based on the financial information given in Appendix A, what is HCF’s current financial position, how it is performing, perform ratio analysis to assess its current financial position and financial performance. (a) HCF’S Current Financial Position. (b) How HCF is performing. * Falling margins and profits * Revenue decreased by 7.7% (RM10mil) but COGS increased by 6.5% (RM4740mil) in 2008 * Operating profit decreased by 67% (RM9240mil) in 2008 * Increase in current liabilities * Trade payables increased by 92% (RM6654mil) * Overdraft increased by 86% (RM1415mil) PROFITABILITY | FORMULA | YEAR 2008 | YEAR 2007 | Return on Capital Employed (ROCE) | EBITNET ASSETS ×100 | 330054841 ×100=6% | 1259049437 ×100=25.47% | Profit Margin | EBITNET NET SALES×100 | 3300120000 ×100=2.75% | 12590130,000 ×100=9.68% | Return on Assets | NET PROFITTOTAL ASSETS×100 | 244272661 ×100=3.36% | 919161729 ×100=14.89% | Gross Profit Margin | GROSS PROFIT SALES×100 | 42750120000 ×100=35.63% | 57490130000 ×100=10.65% | Operating Profit Margin | OPERATING PROFIT SALES×100 | 4600 120000×100=3.83% | 13840 130000×100=10.65% | * Resulting in overall increase of current liabilities by 45% (RM5528mil) RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. RATIO: PROFITABILITY, LIABILITY, ACTIVITY & LEVERAGE. PROFITABILITY * ROCE To measure of the return that a business in achieving from...
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