Finance Strategy – Pensonic and Khind
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[pic 1] Individual Assignment Principles of Corporate FinanceNAME:QIN Yi xuanID:I13004160Section:FN2Subject Code：MGT4240Lecture：Mr Lau Wei ThengDue Date :30th MarchContent Part One： Introduction……………………………………………………………………………………………1Part Two : Financial Analysis2.1 Ratio analysis………………………………………………………………………………………………………………22.2 Financial ,investment,dividend decision……………………………………………………………………….42.3Growth Prospect…………………………………………………………………………………………………………52.4 Theory………………………………………………………………………………………………………………………6Part Three Valuation………………………………………………………………………………………………………6Part Four Recommendation……………………………………………………………………………………………7Part Five Calculation and Chart…………………………………………………………………………………….8 Part one :Introduction[pic 2]VS[pic 3]I choose PENSONIC and KHIND as the main objects of my financial report ,they are all Malaysian electric housing appliances companies. PESONIC Holdings Berhad is a company which engaged in the manufacture, assembly, sale and distribution of electrical and electronic appliances in Malaysia. It is founded in 1965 by Dato Sri Chew Weng Khak in Balik Pulau, Penang. We use market mix to analysis the market of PENSONIC ,the target market of PENSONIC is the age of 35 to 55 of housewife. For the products of PENSONIC, it builds and sells over 200 electric products which are included kitchen applications, home comfort ,audio, visual ,laundry ,lighting ,refrigeration and so on.(PENSONIC .com 2016).For distribution of PENSONIC, it established many stores in 11 cities in Malaysia ,such as Penang, Johor, Melaka, Kuala Lumper, they also provide online store in order to convenient to customers .For price of PENSONIC, it set reasonable price and high quality of products. For position of PENSONIC in Malaysia, it has the decades of brand-building, competitive pricing, high quality and wide-ranging products have built its reputation as the premier Malaysian brand for electrical home appliances. PENSONIC is the only Electrical Home Appliances brand selected by the Malaysia External Trade Development Corporation (MATRADE) as one of the 20 leading and most prominent brands in Malaysia.
KHIND Holding Berhad is a Malaysian leading electronic applications company found in 1961 by Cheng King Fa. We use market mix analysis the market of KHIND. The target market of KHIND is the age of 30 to 55 .For products, they provide over 300 items in the markets such as fan series ,home appliances ,kitchen appliances ,lighting appliances ,electrical &writing accessories.(Kind.com 2016).For distribution, KHIND not only focus on Malaysian market ,it also focus on oversea ,they build a lot of subsidiaries in Hong Kong ,Singapore ,Guangzhou. For price , compare the price with PENSONIC,KHIND will cheaper than PENSONIC ,KHIND set their own online shop to sell their products, they also cooperate with other popular online shopping website like Alibaba, Ebay ,Amazon to sell their products .For position of KHIND, For position of KHIND, Over the years, KHIND has won many accolades and awards. The most recent are the SMI Achievers Award and Innovation Award 2004, the KLSE Corporate Sectorial Award 2003, the Prime Minister Quality Award 2003 and the industry Excellence Award 2003 by the Ministry of International Trade and Industry .These awards are testimonies of our drive for quality, energy efficiency, product design, creativity and innovation as well as compliance to SIRIM standards.Part Two ：Financial Report Part Two : Financial Analysis2.1 Ratio analysisNet Profit Margins[pic 4][pic 5](Table2.3)From Table 2.3 shows that Net Profit Margins between KHIND and PENSONIC. Firstly ,we can see the whole trend of KHIND is positive, especially KHIND has strongly increased by 1.32% in 2013 compare with 2012.I commit KHIND may improve sales or increase price of product to make its Net Profit Margins increased in 2013.However,KHIND is not stable ,it decreased by 1.19% in 2014 compare with in 2013.I commit, KHIND’s sales is very poor in 2014 or high price and poor service make sales drop to influence net profit decreased .Secondly, the net profit margins trend of PENSONIC is not stable ,even it appear negative in 2012.I comment ,according to Star newspapers on December 3th 2012 show that many global housing appliances brand enter Malaysia in 2012 ,it makes PENSONIC sales decrease directly. In conclusion, if we analysis whole trend of the net profit margin between two companies .KHIND will better than PENSONIC, it means KHIND has high efficiency to translate sales into profit at various stages than PENSONIC.Return of Equity[pic 6][pic 7](Table 2.4)From Table 2.4 shows that Return of Equity between KHIND and PENSONIC. Firstly, the trend of KHIND’s return of equity is highest in 2013,i commit KHIND has efficiency to use the money from shareholders to generate profits and grow the company in 2013.However,KHIND appeared decrease by 3.93% in 2014 compare with 2013.I commit KHIND has inefficiency to use investment to generate earning growth. Secondly, PENSONIC has strongly decreased by 15.86% in 2012 compare with 2011,i commit PENSONIC didn’t use investor’s fund effectively and it may cause more lost in 2012.In conclusion, if we compare the return of equity between KHIND and PENSONIC ,we can get the return of equity of KHIND is higher and more stable than PENSONIC ,it means KHIND has more efficiency of the firm in generating return for its shareholders than PENSONIC .