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Sycal Ventures Bhd. Company Analysis
SYCAL VENTURES BHD. COMPANY ANALYSIS
KEVIN LEEGOH JENG JHIEHCHUA JIA CHENGHAZIQ ZARIFULKEVIN HIISYAFIQ ZARIFUL
031519203150800315160031413103192230314702
1
Sycal Ventures Bhd. Company Analysis
2
Background of the Company
Sycal Ventures Bhd. Company Analysis
3
Sycal Venture Berhad
- founded in 1980 and it was formally known as Cygal Berhad.
- An investment holding company which mainly focuses in building construction and civil engineering works in Malaysia and Hong Kong.
- 2 segments as its subsidiaries: property development & (12 indirect subsidiaries) manufacturing and trading.
- Chairman of the company: Dato’ Sri Haji Abd Rahim Bin Haji Abdul (66 years old)
Sycal Ventures Bhd. Company Analysis
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Principal Activities
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Contractor for building & Civil engineering works
Property Development
Manufacturing:-• Building Materials• Aircraft parts &
equipment
Sycal Ventures Bhd. Company Analysis
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Analysis of Revenue Contribution
Sycal Ventures Bhd. Company Analysis 7
Sycal Ventures Bhd. Company Analysis 8
Sycal Ventures Bhd. Company Analysis 9
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Evaluation of Current Industry
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Malaysia GDP (obtained from http://www.tradingeconomics.com/malaysia/gdp-from-construction )
• 12,558 MYR million GDP is the highest since 2010.• GDP averaging at 9,439 MYR million from 2010 to 2016. • Construction industry is on the rise.
Construction Industry GDP
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Future growth- Construction industry remain healthy.
- New plan for KL in the next 5 years.
- CAGR increase by 16% for the 11th Malaysia Plan.
- Positive expectations about future job supply have been supporting current stock prices.
Challenges- Increased in oil price.
- Imposed of GST.
- Depreciation of RM.
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Strength & Weaknesses
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Strength
- Operates through 3 sectors which is construction, property development and manufacturing and trading
- RM181.67m revenue with 169 numbers of employees
- Strong liquidity of the company
2015 2014 2013 2012 2011 Average
Current Ratio (times) 1.92 1.98 1.55 1.46 1.67 1.72
Quick Ratio (times) 1.8 1.84 1.51 1.37 1.57 1.62
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Weaknesses - Drop in net cash flow by 5.66M between years 2014 and 2015- Used more cash to support its operation - Producing a cash flow loss of RM426k- Inventory turnover could ascertain - Long time to pay accounts payable
2011 2012 2013 2014 2015
-6000-4000-2000
02000400060008000
10000
Cash Flow (RM'000)
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Strategic Plans
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Seizing Opportunities• Repayment of RM 69m from 2014 to 2016 • Cygal Development Sdn Bhd had a 12 year
contract with Pullman Hotel until 2022 • Will look to see it’s property development activities
to snap up profit in the next 5-10 years• Potential RM1.2 billion GDV in future township
development with PKNP
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Facing Challenges• Sycal had broken away from the down trend chart recently
after a strong rebound on the floor price
• The major challenge is that they should maintain flow of strong volume in trend chart
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Facing Challenges
• Going through the current local currency with the effect of GST and strict lending policies
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Capital Investments & Sources of Funding
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Sycal Ventures Bhd. Company Analysis
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SOURCE OF FUNDING
Equal to Total Additions of the year
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Evaluation of Cash Flows
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Sycal Ventures Bhd. Company Analysis
SUMMARY OF MAJOR CASH
FLOWS OF SYCAL BERHAD IN 2015
25
Sycal Ventures Bhd. Company Analysis 26
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Free Cash Flow
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2015 2014 2013 2012 2011
RM'000 RM'000 RM'000RM'00
0RM'00
0Net cash from operating activities = (426) (41,770) (14,148) 21,420 1,436 Cash payments planned for investments in long-term assets
= (1,407) (1,401) (407) (40) (908)
Dividends = 0 0 0 0 0 Total free cash flow =
(1,833)
(43,171)
(14,555)
21,380
528 Free Cash Flow from 2011 to 2015
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Evaluation of Company’s Performance
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(i) Liquidity2015 2014 2013 2012 2011 Average
Current Ratio (times) 1.92 1.98 1.55 1.46 1.67 1.72
Quick Ratio (times) 1.80 1.84 1.51 1.37 1.57 1.62
Average Collection Period (days)
360 291 340 298 503 358
Average Payment Period (days)
257 200 246 230 263 239
Liquidity ratios from 2011 - 2015
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(ii) Activities
Activities ratios from 2011 - 2015
2015 2014 2013 2012 2011 Average
Inventory Turnover (times)
14.07 18.37 39.55 18.25 10.69 20.19
Total Asset Turnover (times)
0.61 0.80 0.72 0.54 0.34 0.60
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(iii) Debt
Debt ratios from 2011 - 2015
2015 2014 2013 2012 2011 Average
Debt Ratio (%) 54.18 55.99 53.14 45.34 44.07 50.53
Times Interest Earned (times)
13.63 26.09 72.23 16.21 4.76 26.58
Fixed Payment Coverage Ratio (time)
2.22 5.94 3.43 1.68 2.91 3.24
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(iv) Profitability
Profitability Ratio from 2011 - 2015
2015 2014 2013 2012 2011 Average
Inventory Turnover (times) 14.07 18.37 39.55 18.25 10.69 20.19
Average Payment Period (days)
257 200 246 230 263 239
Total Asset Turnover (times) 0.61 0.80 0.72 0.54 0.34 0.60
Times Interest Earned (times) 13.63 26.09 72.23 16.21 4.76 26.58
Gross Profit Margin (%) 12.80 10.67 10.86 12.10 19.34 13.15
Operating Profit Margin (%) 7.32 9.54 6.5 8.77 10.24 8.47
Net Profit Margin (%) 5.38 8.59 5.96 5.26 5.79 6.20
Return on Total Assets (%) 11.27 17.70 16.28 24.60 11.65 16.3
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(v) Market performance
Market Performance Ratio from 2011 - 2015
2015 2014 2013 2012 2011 Average
Return on total assets (%) 3.49 6.99 4.44 2.84 1.78 3.91
Return on common equity (%) 7.75 16.11 9.58 5.24 3.22 8.38
Earning per share (RM) 0.05 0.11 0.05 0.03 0.02 0.05
Price/earnings (times) 7.59 2.93 5.14 6.45 9.97 6.41
Price/book ratio (times) 0.55 0.48 0.46 0.34 0.31 0.43
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Forecast of Financial Year 2016
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36
Fore
cast
of
Inco
me
Stat
emen
t 20
16
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37
Required New Funds (RNF) = A (ΔS) − L (ΔS) − PS2 (1−D)S S
A/S = Percentage of relationship of variable assets to sales
ΔS = Change in sales
L/S = Percentage of relationship of variable liabilities to sales
P = Profit margin
S2 = New sales level
D = Dividend payout ratio
Required New Funds for 2016
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Required New Funds (RNF) =
135.13% (19,303) −
70.20%
(19,303
) −5.38
%
(341,020) (1-0%)
=
26,083.71 − 13,550.87 −
18,346.88
= RM (5,814.04)
Required New Funds for 2016
Negative number indicates, with the forecasted 6% revenue growth, NO Additional external Funds are needed , to fund the growth
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Conclusion
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40
• Have great competitive advantages over companies
• Major drop in cash flow • Takes a long time to pay accounts payable• Maintain a strong positive cash flow
• Be more consistent in selling off its inventories and maintain a positive cash flow.
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41
THANK YOU