Old Chang Kee

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TABLE OF CONTENTS

1INTRODUCTION TO OLD CHNAG KEE GROUP4

1.1Overview4

1.2History5

1.3Share Price Performance5

1.4Products and Services5

1.5Brands5

1.6Corporate Strategy and Objectives5

1.7Sources of Competitive Advantage5

1.8Ownership Structure5

1.9Capital Structure5

1.10Management Structure5

2INDUSTRY Analysis6

2.1Overview6

2.2Industry External Drivers6

2.3Market Segmentation6

2.4Products and Services Segmentation6

2.5Major Market Segmentation6

2.6Industry Participants / Competitors6

2.7Porter Analysis6
2.7.1Bargaining Power of Suppliers6
2.7.2Bargaining Power of Buyers6
2.7.3Barriers and Threat to Entry6
2.7.4Threat of Substitute Products6
2.7.5Rivalry among Existing Competitors6

2.8SWOT Analysis7
2.8.1Strength7
2.8.2Weaknesses7
2.8.3Opportunities7
2.8.4Threats7

2.9Industry Outlook7

3ECONOMIC Environment8

3.1Overview8

3.2Macroeconomics Indicators8
3.2.1Inflation8
3.2.2Interest Rates8
3.2.3Exchange Rates8

3.3Economic Outlook8
3.3.1Estimated Market Return8

4Current Issues9

4.1Macroeconomic Factors9

4.2Microeconomic Factors9

5Financial Analysis10

5.1Dupont Analysis10
5.1.1EBIT / Sales10
5.1.2Sales/ Total Assets10
5.1.3EBIT / Total Assets10
5.1.4Interest Expense / Total Assets10
5.1.5Net Before Tax / Total Assets10
5.1.6Total Assets / Common Equity10
5.1.7Net Before Tax / Common Equity10
5.1.8Tax Retention on Ratio10
5.1.9Return on Equity10

6Valuation Assumptions11

6.1Required Rate of Return (CAPM)11

7Valuation Analysis12

7.1Dividend Discount Model (DDM)12
7.1.1Dividend Forecast12
7.1.2Intrinsic Share Prices12
7.1.3Sensitivity Analysis12

7.2Free Cash Flow to Equity Model12
7.2.1Cash Flow Forecast13
7.2.2Intrinsic Share Price13
7.2.3Sensitivity Analysis13

7.3Pricing Earning Ratio13
7.3.1Sensitivity Analysis13

7.4Price / Book Value Ratio (P/B)13
7.4.1Sensitivity Analysis13

7.5Net Tangible Asset Backing Model (NTA)13

8VALUATION DISSCUSION14

8.1Dividend Discount Model (DDM)14

8.2Free Cash flow to Equity Model (FCFE Model)14

8.3Price / Earnings Ratio Model (P/E)14

8.4Price / Book Value Ratio (P/B)14

8.5Net Tangible Asset Backing Model (NTA)14

8.6Preferred Valuation Method\14

9CONCLUSION & RECOMMENDATIONS15

10APPENDIX16

11 References17

11 Contribution Statement18

INTRODUCTION TO OLD CHNAG KEE GROUP

1 Overview

Old Chang Kee (OCK) was incorporated in Singapore on 16 December 2004 as a private limited company under the name “Old Chang Kee Singapore Pte Ltd.”. The Group is in the industry of food and beverages, principally engaging in the manufacture and sale of affordable food products of consistent quality under the brand name “Old Chang Kee”. The company started out in 1956 with its well-known signature product, Old Chang Kee curry puff and augmented by a suite of more than 40 other food products such as fish balls, spring rolls and chicken wings. In order to differentiate their products from others in today’s competitive market, OCK has developed haunting and idiosyncratic brand names for all their products. OCK currently have interest in retail outlets, catering, delivery, and franchise and dine-in operations. Besides Singapore, OCK also have vested operations interest in Australia, Thailand, China (Chengdu), Indonesia, Philippines and Malaysia....
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