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Proposal of business policies
Ratio •Liquidity ratio •Profit margin •Earning per shares
Other Indicators •Staff turnover rate •Fluctuation of the market price of company shares •Customer survey •Credit ratings
Social Responsibilities
The well-beings of the stakeholders should be given the same weighting as the shareholders’ profits
Stakeholders: • Employees
Sustainable development
Ensuring both the current prosperity and future progress
Analysis of past performance
2006200720062007
$7 billion 5-year term/ revolving loan facility
MTRC can ask the banks to lend money repaid in the 5 years.
Specification:
Liquidity problem will not be resulted from repayment of loan
Raising $10 billion for the merger
Advantages for syndicated loan
Low interest rate Little time and money are needed
Long loan tenor MTRC can ask the banks to lend the money repaid in the 5 years
Low financing cost
ROCE
2.72 2.59
Investors are willing to pay a higher price
Earnings per share
0.7:1 1.8:1
Current ratio
Interest cover
Threats Economic downturn
Extensive diversification of operating activities
Having sufficient resources to operate in the foreseeable future
Opportunities Expansion of renewable portfolio
Development in both local and international markets
Synergy effects of the merger
Significant increase in market share, patronage
and recurrent profitability
16.3%
Capturing future growth opportunities
certainty to the future fare setting
Synergy effects of the merger
Open up new markets
Expansion of structure
Markets in the mainland and Eastern Europe are attractive with development potential
Lots of time and money are invested
Promoting sustainable development
Fulfilling social responsibility
Underlying Principles
Marketing
Financing
Underground Streets
Generating further rental income
Products
Proposed locations: 1.Linking Nam Cheong Station with Sham Shui Po Station
Reasons: • Nearby areas • Link up different lines • Time-consuming to transfer in between
Examples of theme and types of shops: • Cuisine • Lower cost mini store • Wine
Products
2. Utilizing the area in between the stations of Tsim Sha Tsui and East Tsim Sha Tsui
Reasons: - Booster local cultural development
- Diversifying local district colors
- Lending out areas for cultural activities
Products
Examples :
Traveling between the stations and some new estates (by co-operating with the developers)
Traveling towards sight-seeing spots
Subsidiaries facilities
Subsidiaries facilities
To improve quality of the services, different subsidiaries facilities can be provided Examples :
• Provision of free Wi-fi services
• Installation of lockers in the stations
• Toilets available in all stations
• Having more exits
Through self-recommending to take part in construction of trans-boundary bridges, the MTR can take the advantage of
Extending its network to mainland
Efficient use of idle cash
Increasing income from railways operation
Sharing profits from highway tolls
Products
Marketing
Inter-modal discount
Small gifts
Fares reduction
Rental income
Advertising Income
Careful management of the investment portfolio • Avoid investing in high-risk financial products
Cooperation with other enterprises • other transportation company
• property development company
Financial
Further fund raising
If the MTR liked to collect more fund, we would suggest it issuing preference shares.
Why ?
No effect on liabilities
Usually issue at a higher price than that of ordinary shares
Small financing cost
Human Resources Management
• More familiar with development planning in China
• Cooperation with universities in China by providing specific training programmes
Human Resources Management
• Service training
• Bonus system
Evade the stream-the vicious circle under the financial turmoil
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