Fm presentation final

Sycal Ventures Bhd. Company Analysis

SYCAL VENTURES BHD. COMPANY ANALYSIS

KEVIN LEEGOH JENG JHIEHCHUA JIA CHENGHAZIQ ZARIFULKEVIN HIISYAFIQ ZARIFUL

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Sycal Ventures Bhd. Company Analysis

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Background of the Company

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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)

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Principal Activities

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Contractor for building & Civil engineering works

Property Development

Manufacturing:-• Building Materials• Aircraft parts &

equipment

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Analysis of Revenue Contribution

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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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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

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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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Fore

cast

of

Inco

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Stat

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16

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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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• 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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THANK YOU