WooD WooD Update 5

8/2/2019 WooD WooD Update 5

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1

Iman Sahafzadeh 1101600764

Kamran Ahangarani 1101600795

Elnaz Ataei 1091200742

Ahmad Muzaimi 1111600028

Dineshan 1111600023

Semester ID: 10135

Group ----

September

2011


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Astino Berhad2

Astino Berhad was incorporated in 2000 as a holding

company of the Astino Group comprising Ooi Joo Kee &

Brothers .

the company has established itselfas one of the leading

industrial enterprise in the field ofwood product, and newbuilding products with three major manufacturing plants

located at strategic locations in Malaysia.

The successes of Astino Berhad were built on the company's

commitment to strive for continuous improvement on quality

product and excellence in services.


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Weighted average cost of capital3

Investors use WACC as a tool to decide whether to invest. The 14.4%

represents the minimum rate of return at which Astino produces value

for its investors

2010 Rm Rf Rs Rb WACC

1.4145 11.75% 3.73% 15.08% 3.80% 14.40%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Rm Rf Rs Rb WACC

Astino


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Value of the Firm4

Astino is a leveraged company.

The company could use its debt to increase the value.

93%

7%

2006

S

B95%

5%

2007

S

B 88%

12%

2008

S

B

89%

11%

2009

S

B

94%

6%

2010

S

B


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Capital Structure5

The market demand for products is steadily increasing

throughout the year of ouranalysis. So they used their debt

and make profit for the company.

Astino

year 2006 2007 2008 2009 2010

Debt ratio 0.23 0.38 0.28 0.13 0.32

Debt to Equity Ratio 0.39 0.72 0.52 0.17 0.51

TIE 9.5312 11.2268 11.1395 6.0076 19.1624

0

0.10.20.30.4

0.50.60.70.8

2006 2007 2008 2009 2010

Astino

Debt ratio

Debt to EquityRatio

0.00

5.00

10.00

15.00

20.00

25.00

2006 2007 2008 2009 2010

Astino

TIE


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Dividend Policy6

Astino is well known for its well balanced financial policy. Its

demand for product are increasing steadily in the market.

The dividend paid is in the range of 3 sen to 5 sen

throughout the year of our review. The lowest in the period

which is 2008 and 2009 is due to the major shares buy back.

Astino

2006 2007 2008 2009 2010

dividend 0.04 0.05 0.03 0.03 0.05

Earning per share 0.08 0.13 0.2 0.07 0.16

Payout Ratio 0.32 0.29 0.11 0.83 0.25

00.2

0.4

0.6

0.8

1

2006 2007 2008 2009 2010

Astino

Payout Ratio


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Net Working Capital7

There is no significant change in inventory period so

company needs to work on inventory period to

decrease its operating cycle if possible.

In 2010 payable period is decresed.

Inventory

Period

Payable

Period

Receivable

Period

Operating

Cycle Cash Cycle

Year ASTINO

2006 82.12 45.39 83.58 165.70 120.31

2007 92.62 31.88 77.62 170.24 138.36

2008 105.82 32.29 65.87 171.68 139.39

2009 94.44 36.24 65.83 160.27 124.03

2010 96.88 17.70 59.75 156.63 138.93


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The trend of receivable period is decreasing to collect

the money from in short period.

The trend of payable period is decreasing same as

receivable.

0.00

20.00

40.00

60.00

80.00

100.00

120.00

2006 2007 2008 2009 2010

Astino

Inventory Period

Payable Period

Receivable Period


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Classic Berhad9

Classic Scenic Berhad (CSCENIC) was incorporated on 10 November

2003, and listed on the Second Board of the Bursa Malaysia Securities

Berhad (Bursa Securities) on 4 November 2004. Subsequently on 6 June

2006, it was transferred to the Main Board (Main Board and Second Board

merged and now known as Main Market) of the Bursa Securities. CSCENIC

is an investment holding company, with subsidiaries principally engaged

in the manufacturing of wooden picture frame mouldings, and wooden

pallets.

The first mouldinags were made in 1994, and in recent years, we have

emerged to be the largest wooden picture frame manufacturer and

exporter in Malaysia, and one of the biggest operations in the region as

well. Current manufacturing facility comprises of 6 factories spread over

an area of 500,000 sq. ft., and a 450 strong workforce. There is still a long

road ahead, the Group will continuously focus on strengthening its overall

management in relation to a continuous improvement strategy in all

aspects of the business and move on to greater heights on our road to

success.


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2010 Rm Rf Rs Rb WACC0.5407 11.75% 3.73% 8.07% 0.00% 8.07%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Rm Rf Rs Rb WACC

Classic

Series1


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Value of the Firm11

100%

0%

2006

S

B

100%

0%

2009

S

B 100

%

0%

2008

S

B

100%

0%

2009

S

B100%

0%

2010

S

B


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Capital Structure12

No debt

Unlevered


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Dividend Policy13

The company has been steadily paying a dividend of4 sen forthe year2006,2007and 2008. Then there was a major increasein 2009and 2010. it is only natural for Classic Scenic, which ispurely financed by shareholders to pay more dividends in caseof extra free cash flows, to make sure the shareholders remainpleased.

Classic

2006 2007 2008 2009 2010

dividend 0.04 0.04 0.04 0.07 0.09


Payout Ratio 0.48 0.48 0.46 1.02 0.91

0

0.2

0.4

0.6

0.8

1

1.2

2006 2007 2008 2009 2010

Classic

Payout Ratio


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There is increase in receivable period and inventoryperiod because of that we can see a increase in cashcycle.

Inventory

PeriodPayable Period

Receivable

Period

Operating

CycleCash Cycle

Year Classic Scenic

2006 190.40 32.45 52.08 242.48 210.04

2007 237.80 33.37 58.98 296.78 263.41

2008 306.70 40.70 64.73 371.43 330.73

2009 342.03 38.99 54.64 396.67 357.68

2010 227.67 33.06 46.32 273.99 240.93


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Decrease in cash cycle in 2010.

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

2006 2007 2008 2009 2010

Classic

Inventory Period

Payable Period

Receivable Period


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Dominant Berhad16

Dominant Enterprise Berhad is a public listed company on the

Main Board of Bursa Malaysia Securities Berhad.

Today, the company is proud to have eleven(11) subsidiaries

under its wings that are, among others, involved in the

manufacturing of environmentally friendly engineered woodmoldings, laminated wood panel products as well as the

distribution and export ofawide range ofwood products

worldwide


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A high WACC indicates that a company is spending a comparatively largeamount of Money in order to raise Capital, which means that the companymay be risky. On the other hand, a low WACC indicates that the companyacquires capital cheaply. Since our WACC is 8.26% is reasonable becauseit is almost in the middle ,it is not too risky and spending a large amount ofMoney for raising Capital.


0.8409 11.75% 3.73% 10.48% 5.15% 8.26%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Rm Rf Rs Rb WACC

Dominant

2010


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Value of the Firm18

Dominant is a leveraged company .

Percentages of debt and equity are constant in recent

years.

59%

41%

2007

S

B 63%

37%

2007

S

B 54%

46%

2008

S

B

54%

46%

2010

S

B54%

46%

2009

S

B


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Capital structure19

It is obviously clear that our debt to equity ratio is decreasing In whole period. The name of this ratio says it all; this ratio shows how much your business is in

debt, making it an excellent way to check your businesss long-term solvency

It is obviously clear that our debt to equity ratio is decreasing

It is mean that company is more able to pay its loan and other debt and changeits value to more equity, which is very good sign for us.

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2006 2007 2008 2009 2010

Dominant

Debt ratio

Debt to Equity Ratio

0.002.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

2006 2007 2008 2009 2010

Dominant

TIE

Dominant

year 2006 2007 2008 2009 2010

Debt ratio 0.29 0.3 0.35 0.24 0.26


TIE 6.80 8.16 6.57 7.53 13.86


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Dividend Policy20

The dividend for the year2009was lower compared to the

rest because the companys revenue was 1/3 from the

revenues in the previous years. So that is why the directors

decided to declare only 1.5 sen dividend per share.

Dominant

2006 2007 2008 2009 2010

dividend 0.04 0.05 0.03 0.01 0.04


Payout Ratio 0.55 0.27 0.3 0.16 0.26

0

0.1

0.2

0.3

0.4

0.5

0.6

2006 2007 2008 2009 2010

Dominant

Payout Ratio


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There is no significant change in payable and receivable

period , except in the last year

Inventory

Period

Payable

Period

Receivable

Period

Operating

CycleCash Cycle

Year Dominant

2006 68.95 35.61 73.50 142.45 106.84

2007 79.91 37.51 71.27 151.18 113.67

2008 83.43 32.32 72.77 156.19 123.88

2009 82.55 27.78 74.13 156.69 128.90

2010 91.86 32.87 70.39 162.25 129.38


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There is no significant change in inventory period,

except in the last year the inventory period in increased.

they need to work on inventory period.

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

100.00

2006 2007 2008 2009 2010

Dominant

Inventory Period

Payable Period

Receivable Period


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HeveBord Berhad23

Company incoopared 16 Aug 1997

23 May 1999 listed in the first board

Company objectives:

STRIVE TO MAXIMIZE THE USAGE OF RUBBERWOOD

RESIDUES

INCREASE CAPACITY FOR PARTICLEBOARD AND VALUE

ADDED FINISHED PRODUCTS

CREATE MORE HIGH SKILL EMPLOYMENT

OPPORTUNITIES FOR MALAYSIANS


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1.1312 11.63% 3.73% 12.67% 6.80% 7.25%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

Rm Rf Rs Rb WACC

HeveaBoard

2010


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Value of the Firm 25

At 2006, Shares 45%, borrowing 55% In 2007 there was an increase, the company was growing, lot

of project to invest in, a lot of capital was needed.

2008, bing increase in borrowing, company was growingrapidly.

2009, start paying off debt, borrowing reduced to 77%

2010, borrowings reduced even more, company stable.

45%

55%

2006

S

B

33%

67%

2007

S

B

6%

94%

2008

S

B

23%

77%

2009

S

B

28%

72%

2010

S

B


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Capital Structure26

Debt ratio, 2009 and 2010 was a bit riskier in terms of leverage, the ability topayout the debt. Compared to previous years.

Debt equity, got lower over the years, less aggressive in financing theiroperations. In 2009, they have increased their shares, so they are leaningtowards inside financing as the directors of the company feel that it is not worththe risk.

TIE, 2009 onwards there is a steady increase, as the company has issuedshares and they have cash inside the company, so theyre able to pay off theirdebts.

HeveaBoard

year 2006 2007 2008 2009 2010

Debt ratio 0.51 0.51 0.5 0.47 0.42


TIE 3.19 1.01 0.99 2.58 3.42

0

0.5

1

1.5

2

2006 2007 2008 2009 2010

HeveaBord

Debt ratio

Debt to EquityRatio

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

4.00

2006 2007 2008 2009 2010

HeveaBord

TIE


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Dividend Policy27

The reason for the company not to pay out any dividends in

the year2009and 2010 to the shareholders is because the

company is growing, they are preparing to invest in otherbig

projects, hence the directors decided not to pay any

dividends to their shareholders.

HeveaBoard

2006 2007 2008 2009 2010

dividend 0.05 0.03 - - -


Payout Ratio 0.38 0.4 - - -

0

0.1

0.2

0.3

0.4

0.5

2006 2007 2008 2009 2010

HeveaBord

Payout Ratio


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Working Capital28

The company can manage their inventory, acc receivable, and accpayable rather well.

Confident can pay back their customers.

Cash cycle 2007, lowest. Starting from 2008 there was anincrease.

Both the payable and receivable period getting lower through the

years.

Inventory

Period

Payable

Period

Receivable

Period

Operating

CycleCash Cycle

Year HeveaBoard

2006 87.94 116.60 68.18 156.13 39.53

2007 61.89 100.45 50.85 112.73 12.29

2008 56.10 80.03 38.82 94.92 14.89

2009 72.53 77.69 39.87 112.40 34.71

2010 64.55 56.49 47.20 111.74 55.25


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Working Capital29

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

2006 2007 2008 2009 2010

HeveaBord

Inventory Period

Payable Period

Receivable Period


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Minho Berhad30

The activities in which the Group is currently involved are

concerning timberand its related activities, which are logging

and manufacturing. This means, its all about timberand related

wood-based industries. To ensure that the Group is committed

to responsible stewardship of the environment throughout alloperations, the following environment policies have been

adopted.


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Minho

2010

Rm Rf Rs Rb WACC

1.4327 11.63% 3.73% 15.05% 6.30% 11.47%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

Rm Rf Rs Rb WACC

Minho

2010


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Value of the Firm 32

Number of Shares remains

Only borrowings figure change

Less dependency on debt over the years

51%49%

2007

S

B 63%

37%

2008

S

B51%49%

2006

S

B

58%

42%

2009

S

B 65%

35%

2010

S

B


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Capital Structure33

Debt ratio never exceed of total assets

Debt ratio and Debt to Equity Downward sloping Trend

0

0.1

0.2

0.3

0.4

0.5

0.60.7

2006 2007 2008 2009 2010

Minho

Debt ratio

Debt to EquityRatio

0.00

1.00

2.00

3.00

4.00

5.00

2006 2007 2008 2009 2010

Minho

TIE

Minho

year 2006 2007 2008 2009 2010

Debt ratio 0.22 0.2 0.16 0.14 0.12


TIE 4.17 4.20 2.36 1.99 2.23


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Dividend Policy34

There were no dividends declared from the year2006 till the

year2010. From ouranalysis, we find that Minho is doing

well; hence they did not have to pay their shareholders

dividend. The shareholders can see the share prices

increasing each and every year. This gives them confidenceto remain and keep investing in the company.

Minho

2006 2007 2008 2009 2010

dividend - - - - -

Earning per share 0.14 0.12 0.12 0.02 -0.01

Payout Ratio - - - - -


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No obvious trend

Receivable period always lesser than payable period.

Takes long time to sell their products

Suggestion Improve Inventory Period

Inventory

Period

Payable

Period

Receivable

Period

Operating

CycleCash Cycle

Year Minho

2006 120.43 75.33 70.74 191.16 115.83

2007 156.40 109.96 73.47 229.88 119.92

2008 197.43 135.36 81.85 279.28 143.93

2009 211.65 160.56 107.27 318.92 158.36

2010 171.73 123.31 91.52 263.25 139.94


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Inventory period is the highest, followed by Payable

period and Receivable Period

0.00

50.00

100.00

150.00

200.00

250.00

2006 2007 2008 2009 2010

Minho

Inventory Period

Payable Period

Receivable Period


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Documents

WooD WooD Update 5