IJM Land Berhad (187405-T) is the result following a rationalization exercise involving the merger of two highly reputable players in the Malaysian property scene, namely IJM Properties and RB Land and changed its name in June 2008. IJM Land Berhad brings the combined skills of RB Land’s distinct proficiency in township developm ts and IJM’s expertise in high-rise condominiums, niche developments and commercial buildings. Currently, it is the property development arm of IJM Corporation Berhad, one of the largest construction and infrastructure groups in Malaysia. Listed on the main board of the Bursa Malaysia Berhad, IJM Land Berhad is one of the largest property developers in Malaysia with sprawling townships, boutique developments, strategically located commercial buildings, high-rise and exclusive condominiums under development in key growth areas throughout the country stretching from Penang, Kuala Lumpur, Selangor, Johor, Negeri Sembilan, Melaka to Sabah and Sarawak in East Malaysia. The headquartered of the company is located at Subang Jaya in Petaling Jaya, Malaysia. Currently, IJM
Land Berhad has 6 subsidiaries, through its subsidiaries, it engages in the development and management of real estate properties in Malaysia. Its activities also include operation and management of hotels and recreation clubs; construction of residential, commercial, and industrial buildings; provision of landscaping services; and property investment.
Picture 1: IJM Land Berhad
The Research paper on Deva Student’s Property Website Development
In the United Kingdom, different scholars have noted the rapid increase in the housing demand an aspect created by the increase in the number of international and even local students in the UK based Universities and colleges. Consequently, this results to creation of large commercial markets in the provision of rental related services in the respective university towns, a market that is satisfied ...
1.2 Choices over IJM Land Berhad
First of all, the reason that we have decided to select IJM Land Berhad is because Malaysia is encountering the Economic Transformation Program (ETP) such as The Greater Kuala Lumpur/ Klang Valley and Iskandar Project. By this Economic Transformation Program (ETP), the properties company will be very attractive for local investors and foreign investors and we would like to analyze how the ETP affects the industry as well as the company. It indicates that there are plenty of chances for IJM Land Berhad to boost up their revenue and profits as well as reputation of the company. Thus, plans and strategies of recovery to boost up their future performances are their top priorities. 1.3 Analysis of current situation of IJM Land Berhad
According to IJM Land 2012 annual report, the company main operating revenue (96.4% of total operating revenue) is come from property development revenue such as township project, residential project and commercial/offices project. Besides, others operate revenue such as hotel operations (2.8%), rental income (0.3%) and rendering of other services (0.2%).
Moreover, The Group’s revenue and profit were steady increase year by year and the demand was increasing because of the ETP and the economics of Malaysia such as GDP has growing steady while the inflation rate also remain moderated. In line with the stable economic environment, improved labour market conditions and rising inflationary fears, the property market continued on a growth trend that only moderated towards the end of the year. In 2011, the Malaysian property market recorded an all time high 430,403 transactions valued at RM137.83 billion which were 14.3% and 28.3% higher respectively compared to 2010. In tandem with the vibrant property market, the Group’s projects throughout the country continued to enjoy healthy take up rates, which enabled it to achieve RM1.35 billion in sales. Riding on this positive
sentiment, the Group continued to enhance its value proposition to prospective buyers by offering a wide range of products incorporating contemporary designs and innovative features in our well located developments. The positive results of our efforts are reflected in the financial performance of the Group. According to the company CEO & Managing Director Dato’ Soam Heng Choon, our strategically located projects across the country generally experienced strong demand. In Penang, our prestigious “The Light” waterfront development, Maritime office suites, Pearl Regency, Vertiq and The Address condominium projects, Klang Valley’s Laman Granview in Puchong (an exclusive semi-detached and bungalow enclave), Johor’s landed residential development within Iskandar Malaysia called Nusa Duta, D’Rich and D’Ambience condominium projects, continued to receive overwhelming demand. Our on-going townships such as Seremban 2 in Negeri Sembilan, Shah Alam 2 in Puncak Alam, Selangor and Bandar Utama in Sandakan, Sabah, also continued to receive strong support. In 2012, the Malaysian economy is projected to grow at a steady pace of 4% to 5%, anchored by the resilient growth in domestic demand, despite the uncertainties on the global front.
The Business plan on Choosing the best project for the company
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In response, measures such as one-off financial assistance to low and middle income groups to support private consumptions and the on-going implementation of projects under the Economic Transformation Programme (ETP) to support private investment will help spur economic growth. Nevertheless, Bank Negara had adopted a pre-emptive approach for ensuring macroeconomic stability and prudent level of household debts. Among the measures implemented were, the maximum loan-to-value (LTV) ratio of 70% on third and subsequent residential housing loan, increasing minimum income threshold for credit card applicant and imposing a maximum credit limit to promote prudent financial management and the usage of net income as a criteria for assessing mortgage loan eligibility. The projects in the pipeline such as Seri Riana Residence, a new condominium project in Wangsa Maju, Kuala Lumpur which is strategically located adjacent to the highly successful Riana Green East project and within walking distance to the popular Wangsa Walk shopping centre and Sri Rampai LRT station, Sanctuary Gardens landed residential project in Permatang Tinggi, Penang and the Sky Mansions, our maiden project in Kota Kinabalu, Sabah which is a twin block condominium project with a panaromic view of the Likas Bay. Despite the cautious sentiment caused by
the Eurozone debt crisis, the outlook of the Group remains positive. This is backed by the strong level of committed sales in hand, our strategically located land bank and the extensive product mix coupled with the current accommodative interest rate regime.
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This part of the Code deals with safety from fire. It specifies the demarcation of fire zones, restrictions on construction of buildings in each fire zone, classification of buildings based on occupancy, types of building construction according to fire resistance of the structural and non-structural components and other restrictions and requirements necessary to minimise danger to life from fire, ...
1.3.1 Vision
* To be an internationally admired property developer
1.3.2 Proposed Vision Statement
* Become the top property developer to be involved in sustainable housing 1.4.1 Mission
* Passion
* Expertise
* Leading edge ideas
* Creating value for customers and stakeholders
1.4.2 Improved Mission
Safety, Ethics and Sustainable
* Low accident rate in their unwavering goal
* Uncompromising integrity, honesty, and fairness are the heart of their company * Better green initiative employed in all future development 1.5 Objectives (SMART)
* To become Malaysia’s Largest Property Developer with landbank size more than 10,000 acres and GDV exceeding RM 20billion in sustainable construction over the next 20 years.
2.0 Internal Analysis
Size
Time
Introduction Growth Maturity Decline
Residential Housing
Commercial and Office Building
Green Township
Property Investment
Size
Time
Introduction Growth Maturity Decline
Residential Housing
Commercial and Office Building
Green Township
Property Investment
2.1 Product Life Cycle of IJM Land
2.1.1 Introduction Stage
IJM Land Berhad responded to market demands and its building of residential housing gained momentum. After the merger and acquisition, IJMLand managed to pick up quickly and successfully hold a few key projects in Klang Valley. The price and quality competitiveness has caused more people to prefer on considering IJM Land. People are looking for affordable yet high quality houses where IJM Land at this point of time is doing well in sustainable construction compared to recent days. Meanwhile, the markets also show a bigger demand for residential houses. The demand of residential housing is increased and this caused the revenue of IJM Land rises. Therefore, the basic idea of IJM Land is to conduct their business by building more residential houses. IJM Land property is entirely made of quality and green building material. All of new developing residential housing is innovative and environmentally sustainable. Alternatively, residential housing is priced moderately so that it could compete with other competitor. Other than that, IJM Land property tends to create value to customer. That is the reason why IJM Land property is valuable to property owner. Generally, IJM property prices are value to money. The property building quality is one of the best in Malaysia. Together with these benefit and political issues will further bring growth. Overall building construction market would be elevated in time together with the economic transform program. 2.1.2 Growth Stage
The Term Paper on Land Law
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The sales of commercial and office building of IJM Land Berhad is their high strength, located in high population places, good infrastructure nearby, modern design and it fulfill green building index which also helped to create the brand awareness to the public. In order to adopt green measures, IJM Land Berhad had committed to reduce carbon trails and decelerates global climate change. When building projects that require hundreds of sheets of material or small projects such as flooring in bathroom, IJM Land can enjoy
sustainable profit. Cost of building is lower because IJMLand is able to bulk purchase and control the material prices by hedging the forward contract, IJM Land Berhad wanted to control the cost due to the uncertain in global economy. They also use recyclable building material to build their commercial and office building despite of increased price of raw materials and hiking cost cost. This is because investors out there are affordable to purchase office lots from IJM Land Berhad. The office has got GBI endorsed. In this stage, IJM Land Berhad started to provide building for worldwide market demands and service excellence are setting the standard around the world. It can be seen from its recent overseas venture to London. 2.1.3 Maturity Stage
Besides the core business, it also started to specialize in green townships. It expands beyond its core residential and commercial offices into value-added products such as the green home. The package include is high speed broad band, innovative material and household equipment, a centralized vacuum system, water and electric saving such as rain water harvesting and wind turbine power, and tons of community activity and recycling collection program. We have great expertise in green building, so why not we continue provide more value added features to our products and been able to support that expertise through upstream integration, lowering its costs in materials thru better procurement and create an unique marketing positioning so that others are hard to copy. This has also allowed it to gain a position as the best supplier for green home and office, and to take advantage of enormous economies of scale. With these solid competitive advantages backing it, green townships from IJM land are continuing to grow. It is expanding its green home and offices regionally, and intends to venture to overseas like London, United Kingdom. 2.1.4 Decline Stage
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Introduction Man, for a thousand of years, has inhabited all regions of the earth, from the most favorable terrain to places with the harshest of climates. Man has made great strides to master his natural environment instead of migrating to a more congenial and comfortable climate. His choice of building materials was dictated by what was locally available; ice in polar regions, sand and stone in ...
Because the IJM Land Berhad is not regular player in property investment, hence we highlighted infrastructure segment as declining stage. A lot of property invested from IJM Land was not receiving a good return. IJM does cater some demand of this products but the amount were not significant compare to its competitors. Due to IJM Land Berhad’s concentration on household and commercial building, it is hard for them to jump into property
investment directly. IJM Land Berhad is getting harder to earn profit from the investment due to long term cash allocation and reduced liquidity. 2.1.5 Conclusion of IJM Land Berhad’s Product Life Cycle
Currently, IJM Land Berhad is under growth stage. The selling prices of residential houses are determined by demand and supply. IJM Land Berhad is looking to acquire other more land bank in order to provide larger scale, remain price competitive relative to other real estate developer and lower costs by purchasing in bulk. The growth stage emerges when the necessary features and performance become clear and a dominant design emerges. With rising costs appearing to peak, the operating profit margin has already started to improve in year 2011. Figure 1.1: Operating profit margin
| 2011| 2012| 2013F| 2014F| 2015F|
Net Profit Margin (%)| 26.53| 23.49| 20.11| 21.06| 23.54|
Residential
Residential
2.2.1 Question Marks
Increase in commodity price affects the price of industrial property. Recent industrial property price had hike sharply, we see a 200% increment in semi-detached factory. The commodity price movement is slower and they partly mitigate this risk by having its own cement production called Strong Mix Concrete. The main material used in industrial construction is bricks and cement. When the raw material price of these increase, it caused the cost increase. In addition, IJM Land could transfer the cost increment to industrial property price. This explains why our market share will be lower as compare to other development. 2.2.2 Star
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IJM Land had been listed on Bursa Malaysia and it is merger between IJM Properties and RB Land. In 2008 it was taking advantage of the beginning of the financial crisis to double its gross profit. IJM Land is considered one of the more green environmental developers. It’s prestigious “The Light” waterfront development incorporated bunch of innovative and green measures. It has become the fastest-growing real estate developer. They had successfully branded themselves and distinguish with other property developer. 2.2.3 Cash Cows
IJM Land Berhad cash cow had always been residential. It has plenty condominium and landed houses stretch from northern to southern region. In additional, the company is putting 5 percentage of construction cost into green building technology. The outlook is definitely promising for its business. Basically the sales of residential housing will be like hot cakes. Thereafter, environmentally friendly materials and equipment in sustainable construction will get even more respond from the public. 2.2.4 Dogs
Due to certain reason, IJM Land rarely involve in large scale development in infrastructure hence IJM separated the management of business. IJM Infrastructure has been pulled down from IJM Land Berhad. IJM Group has got a subsidiary company named Besraya (M) Sdn Bhd to replace this role. Besraya(M) Sdn Bhd had been steadily involve in highway building and others. Although the separation could benefit the company in terms of managing
resources and skills, the loss of markets shares from here would also implies that IJM Land is slowing phasing out from infrastructure building. There is less likely an infrastructure building involve in green technology currently in Malaysia, hence IJM Land should not brand them over here. 2.2.5 Conclusion of IJM Land Boston Consulting Group Matrix To conclude BCG matrix, IJM land now has a stable growth with having sustainable cash generate. By having more land bank, each land bank can specialize in a building theme, which can help to improve construction efficiency since buyers nowadays are environmentally conscious and IJM Land Berhad would not have to concentrate in other segment. Therefore, the gap between PLC and BCG is in line. Due to the increasing sales of residential housing and commercial building, the company’s revenue also is increasing. The township shares are gaining momentum as more and more people are concern about what townships development will bring. A township development will improve the quality and lifestyle of developed region. Besides, the question mark will always be the industrial property as the focus of IJM Land is not there, while we see does see a market growth in this segment. Slowly, they can revamp the industrial property with green technology too. 2.3 Value of Chain
2.3.1 Inbound Logistics
Inbound activities are the activities of receiving, storing, and disseminating incoming goods or material for use. In this case, the general contractors are the one who ordered the materials to sites. The location of the projects IJM Land Berhad is across the whole Malaysia with concentration at Penang, Klang Valley and Johor. Engineering and design will go through general contractor before they reach the property developer. Meanwhile, general contractor in this case, can find their own suppliers for equipment and material also sub-contractors were to outsource the engineering and design works. 2.3.2 Technology
IJM Land explores into different kind of technology, including installing the High Speed Broadband to Home, centralized vacuum system and also rain water harvesting. The R&D of the technology is ongoing to make sure that IJM Land Berhad future project and existing ones will be benefited. All the technology employed can provide greener environment and also cost saving to
property owner. IJM Land Berhad has a dedicated workforce combines innovative ideas, efficient construction processes, and a rigorous commitment to quality to deliver exceptional buildings. The value added activity is IJM Berhad able to produce sustainable home with specific customer requirements fulfills all ranges of customer. 2.3.3 Expansion and Acquisition
In June 2008, there is exercise of merger and acquisition between IJM properties and RB Land. IJM Land Berhad brings the combined skills of RB Land. Currently, the company has expanded its market into London. They intend to expand internationally and trying to bring its sustainable construction overseas to compete. The future directions are provides even more savings and integration of digital lifestyle. The value added activities have further expanding on the overseas sites. 2.3.4 Geographical Segmentation
The geographical segmentation of IJM Land is Malaysia and United Kingdom. Malaysia involves a lot of project stretch from Penang, Klang Valley to Johor. The business segmentation is residential housing, commercial lots and township development. The main distribution of IJM Land is at region with high concentration of people and jobs. This made their property sells. 3.0 Organizational Strategy
3.1Corporate Level
Corporate (Plan &Execution)
Corporate (Plan &Execution)
Growth (Company expansion via acquisition)
Growth (Company expansion via acquisition)
Concentric
Concentric
Vertical
Vertical
Horizontal
Horizontal
Product & Marketing Development
(RB Land
And
IJM Properties)
Product & Marketing Development
(RB Land
And
IJM Properties)
Backward Integration
(Acquisition of suppliers’ company aimed for cost reduction & increased productivity) Backward Integration
(Acquisition of suppliers’ company aimed for cost reduction & increased productivity)
Taking Over Suppliers’ Role
(Strong Mix Concrete:
Production and supply of ready mixed concrete)
Taking Over Suppliers’ Role
(Strong Mix Concrete:
Production and supply of ready mixed concrete)
From the above chart, it is noticeable that acquisition of for RB Land and IJM Properties has been the activity of IJM Land Berhad in the expansionary mode. The group has also embarked on integrating vertically its raw material production as well as horizontally to fulfill its product and marketing needs. IJM Land Berhad has also acquired a subsidiary in Malaysia that will supply the group’s full cement requirement in their entire project. The group aimed to take over suppliers’ role, to continue the production by independently managing cement supply in their entire project. Before the acquisition, RB Land has a lot of township building expertise and IJM Properties has experience in building condominiums. So, after the acquisition of both company to become IJM Land can take an advantage on each
strength to fulfill their weakness and sector that never been covered this before. Besides that, before the acquisition RB Land did not have any projects in Penang but IJM Properties did. So, the land bank of IJM Land Berhad has become larger than before. It is very clear that IJM Land has taken a large step in expanding its productivity via acquisitions, however, the focus are too rigorous in the external factor, whereby the internal management could have been overlooked.
3.2Business Level
Competitive (Price competition in the market)
Competitive (Price competition in the market)
Focus
(Niche market: Township and Residential Building)
Focus
(Niche market: Township and Residential Building)
Differentiation (Using recyclable material as their raw material and apply the green technology at their project) Differentiation (Using recyclable material as their raw material and apply the green technology at their project)
According to the GM of IJM Land’s Penang office, Mr Toh Chin Leong, apartment from Linear and Point which are 90% are sold, the Collection I and II are 70% and 75% sold. As for Collection III, the project has been already received 45% booking rate. For the Bandar Rimbayu, out of the 526 units of linked houses to be launched for the first phase, IJM land has received more than 6000 registrants. For the above statement, we could found that the apartment and the project that introduced by the IJM Land is receiving a good respond from the public. This is result from the business strategy that used by the IJM Land which is apply the green environment technology on their project. Environmental friendly is one of the hottest topics at the construction area. Malaysia government has introduced a policy which is given tax deductible to the construction company that using the recycle material as their raw material and it is eco-friendly. Besides that, general
population of Malaysia also prefers those residential housing which are using green technology which can help them to save the energy. Energy efficiency is achievable by installing inverter air-conditioner. Besides, water savings is also important that IJM Land actually look into it and launch water efficient fittings such as dual flush toilet. So, sustainable construction is a win-win strategy for the IJM Land and the consumer. By using this strategy, IJM Land success to make a differentiation with their competitor and become the market leader in Malaysia.
4.0 Financial Analysis
4.1 Internal
| 2011| 2012| 2013E| 2014F| 2015F|
Ruturn on Asset (%)| 3.89| 2.29| 2.74| 3.06| 3.34|
Return on Equity (%)| 12.5| 9.1| 9.4| 10.4| 11.8|
Revenue (RMmil)| 1,162.2| 1,206.0| 1,557.1| 1,863.2| 2,006.7| Earnings Before Interest, Tax (RMmil)| 308.3| 295.4| 313.1| 392.4| 472.5| Earnings per Share (sen)| 19.4| 14| 17.1| 20.4| 25.2| Debt to Equity (%)| 1| (9.1)| (9.5) | (1.7)| (1.5)| Net Profit Margin (%)| 26.53| 23.49| 20.11| 21.06| 23.54| Operating Expenses (RMmil)| 95| 93| 98| 100| 103|
Diagram 4.1 Financial Analysis for the year 2011 to 2015 (Forecast) Return on Asset
Return on Assets (ROA) shows the efficiency of company on using its assets to maximize the profit. From 2011 to 2012, it was dropped 1.6%, one of the reason is the total asset that IJM owned increasing percentage high than increasing of return. Moreover, given that the ROA of the IJM Land forecasted steadily increase since 2012, it can be seen that the analyst is confidence that the management is strong in allocating resources to gain higher earnings in the future. This could be due to strong internal control and distribution of available assets or resources. We could see from the research report that IJM Land had the largest land bank count in Malaysia with 6,432 acres remaining to develop. Analyst believes that the land bank size will continue to grow as IJM Land had the cash to purchase more land.
Return on Equity
Return on Equity (ROE) indicates the profit gained in relative to shareholders’ investment. The ROE at 2011 is highest due to strengthening of Malaysia Ringgit, it reach 14 years highest exchange rate in this year, cost of project is reduce because of material imported become more cheaper. Although at 2012, the ROE is dropping and one of the reason is MYR exchange rate is become lower, and also the because of new shares release at 2011 caused increase of equity about RM70 million, but its forecast is increasing show that analyst believe that the ability of management able to create more return with equity owned. Revenue
Since a lot of new project such as The Light Collection, Bandar Rimbayu, hence the construction industry is also prosperous recently in Malaysia. Moreover, sales of IJM Land also continue to be strong, IJM Land has raked in new sales of RM900 million and confident of achieving between RM1.6 billion for full fiscal year. In additional, the demand of residential increasing is also be good news for IJM Land. So, revenue of IJM Land is increasing from 2011 – 2012 and will be keeping increasing after that by estimation. It show that IJM Land have a good future. The revenue projection is based on the unbilled project across west peninsular of Malaysia. Revenue of IJM Land will continue to growth as long as there is demand for sustainable construction.
Earnings before Interest, Tax
It compares the value of a business, free of debt, to earnings before interest. Other items are from latest annual report. Since IJM Land have a lot of project will be done in recent few years, and it is able to yield more than 20% of profit margin in average in these project. Moreover, the revenue of IJM Land is increasing and estimated that it will keep increasing at the future. So, Earning before Interest, Tax (EBIT) is also will keep increasing by the revenue. Most of analyst is confidence that IJM Land will be create a high earning in the future and give its stock a “buy” comment.
Earnings per Share
The term of earnings per share (EPS) represents the portion of a
company’s earnings, net of taxes and preferred stock dividends, that is allocated to each share of common stock. Earnings per Share (EPS) are the portion of a company’s profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company’s profitability. At 2012, the EPS value started to decline, it is due to drop of EBIT of previous year. Besides this, in 2011, IJM Land gets IJM about RM400 million conversions of redeemable and convertible non-guaranteed bonds to 229 million new shares of IJM Land, it is the main factor of EPS at 2012 and 2013 is drop because total share is increase. But it is believe that earning of IJM Land will be increasing, so the forecast of EPS is also increasing yearly since 2012.
Debt-to-equity Ratio
Debt-to-equity ratio provides information whether IJM Land is operating more on debt basis or otherwise equity basis. At 2011, the Debt-to-equity Ratio of IJM Land is 1%, this shows that the company is able to borrow fewer funds to finance its company given that it can meet its obligations. After 2011, the debt-to-equity is become negative and estimated will negative at the future, it show that IJM Land lending is more than borrowing, it is quite evident to shows that IJM Land is in the state of financially healthy. The company can generate much of earning that can be used to sustain and also to grow the company further. There is still much room for improvements with the potential of the company. However, the company should increase their borrowing to create a new fund for more investment and development to generate profit with more efficiency.
Net Profit Margin
Due to the strengthening of Malaysia Ringgit and reached highest rate in these 14 years at 2011, costs of material imported become cheaper and make the net profit margin at 2011 become higher. However, the construction sector in Malaysia is prosperous and growing faster recently. The cost of material is increasing due to high demand, so the net profit margin is dropping but the management is confidence that they able to reduce the cost at the future, a good management of IJM Land is also make analyst confidence that the management able to increase the net profit margin at the future.
Operating Expenses
Operating expenses is a category of expenditure that a business incurs as a result of performing its normal business operations. One of the typical responsibilities that management must contend with is determining how low operating expenses can be reduced without significantly affecting the firm’s ability to compete with its competitors. Operating expenses also known as “OPEX”. From 2011 to 2012, operating cost is reducing about RM 2 million, it shows that IJM land has improved their efficiency on their operating. In forecasting, the operating expenses is improving year by year, one of the reason is because of IJM Land need more resource for their future development.
4.2 External
Liquidity Ratio
From year 2009 to 2011, the both current ratio and quick ratio of IJM Land Berhad has increased year by year and shows that overall its liquidity is growing. This reflects that the company has a strong current asset and reasonable current liabilities on its balance sheet. As a result, it makes IJM Land in a state of high monetary liquidity which is an opportunity as there is a high chance that the company is able to meet its current obligations. However, the monetary liquidity for its major competitors which are Sunway and IGB is lower than previous year. For Mah Sing Company, both of its current ratio and quick ratio status is decreased year by year from 2011 to 2013. The liquidity status for Sunway and IGB Company is remains at a low level.
Leverage Ratio
For the leverage ratio from year 2011 to 2013, IJM Land Berhad has a unified status which is increase in year 2011 and decrease in 2012. In year 2011, debt-to-equity ratio means that IJM Land Berhad has efficiency manage and control its debt. This may lead to increase the soundness and reputation of the company. At the same time, the leverage ratio of the Sunway is decreasing from 0.424 in year 2011 to 0.402 in year 2012 due to the increased in liability and decreased in shareholder’s equity. Besides that, IGB has fluctuated debt-to-equity ratio which are decrease in year 2011
compare with in year 2012 but increase in year 2013. However, decreasing its long-term debt-to- equity ratio from 0.7621to 0.569 reflects Mah Sing has control its long term debts. In conclusion, although IJM Land Berhad has a fluctuated leverage ratio, but it still has a better debt ratio compare to its competitors.
Activity Ratio
IJM Land Company has a good activity ratio during the year 2011 to 2013. It shows that company has great revenue and high utilization of assets. This may lead to perception that IJM Land has efficiency in generating its assets. The revenue for its competitor is more or less the same amount because the competitor chosen is in the same range. Their revenue project is also constantly increases from year 2011 to 2015F. This is because of current economic situation.
Profitability Ratio
From year 2011 to 2013, in profitability ratio, although it is slightly unstable in its net profit margin (from 26.5 in year 2011 to 20.11 in year 2013) and earning per share (from 19.4 in year 2011 to 17.1 in year 2013) and also price earnings ratio. The unstable in operating and net profit margin are because its expenses are increased in year 2011. However, due to the sufficient net income, it leads IJM Land has a healthy results in the other parts of profitability factors. Besides that, the increasing of earning per share will reflects investor confidence in gaining future returns. This may again due to the economic transform program. Based on the profitability ratio data, all competitors had a good profitability ratio too. IJM Land Berhad has the second highest place if compare with IGB. Sunway and Mah Sing doing quite fair for profit generation.
4.3 Positioning
By using strategic group mapping based on the criteria of establishment years, Landbank Size, GDV, Market Capital to identify our close competitors.
| Estabilished Year| Landbank Size (acres)|
IJM Land| 30| 10000|
Mah Sing| 48| 1430|
Sunway| 37| 2220|
IGB| 32| 2000|
| | |
| Market Capital (RM’million)| GDV (RM’billion)|
IJM Land| 4545| 20|
Mah Sing| 3515| 28|
Sunway| 5118| 24.4|
IGB| 3675| 14.3|
Table 1
Diagram 1
Diagram 2
The closest competitors we found using strategic group mapping (Table1 and Diagram 1&2) are Mah Sing, Sunway and IGB, we know that, IGB are less competitive to IJM Land. After analysising, we realized that IGB have taken down most of the agenda of the group mapping. In a short, IGB established time longer than IJM Land, it should be have enough time, technology, and experience and resource to enlarge their capital but it enable to improve their capital efficiency. Therefore, by these improvements, IJM Land enables to enlarge their company size efficiency. However, we also know that IJM Land is less competitive than Sunway and Mah Sing, because IJM Land can’t make their GDV higher than Sunway and Mah Sing by a huge landbank. Therefore, IJM Land is inability growing on development with rapidly.
5.0 SWOT Analysis
5.1 Internal Analysis
5.1.1 Strength
Vast Exposure and Overseas Venture
IJM Land had strong presence across Malaysia with a greater building capacity. IJM land had projects across Northern region, Central region, Southern region and also Eastern region. Just recently IJM Land expanded to Mint Street at London, Xian Rd located at Changchun, Jilin Province and also Phu Hoi, Vietman. IJM Land has a wide presence in most of the key states in
Malaysia, whereas current product portfolio started to add in overseas markets. Being the leader in the Malaysia property market, we believe IJM Land will gradually accumulate its premium valuations. IJM Land slowly introduces its exposure as well as the influence of green technology building towards overseas market. Its overseas venture is up for 5% this year compare to last year, IJM Land announced that it is venturing into London for a development of one block of five-star hotel-cum-residential apartment and three blocks of residential apartments with a total GFA of 650,000sf. The development, which has a GDV of GBP280mil (RM1.4bil), would be on a 2.7acre site in Central London. The property is located above the National Rail and DLR Railway Lines adjacent to the Royal Mint Street. The location is certainly attractive, where it would have a view of Tower of London, Tower Bridge and River Thames. Apart from the location, we view this acquisition positively because of the cheap entry cost, whereby land cost accounts for only 7% of the GDV. Compared to the Battersea land recently acquired by Sime Darby-SP Setia consortium, IJM Land’s land cost works out to GBP170psf (or RM850psf) or 30% cheaper vis-a-vis GBP235psf of the former. The scale of the project is also much smaller compared to SP Setia/Sime Darby’s RM40bn Battersea project. It was cited that a window of opportunity is spotted, given the lack of funding support for the developers in London, and current exchange rate is also favourable to IJM Land. The exchange rate had always been a matter to consider when venture abroad, this is why IJM Land chose to venture now as our home country currency appreciated. Till date our home currency exchange rate for £1GBP is equals to RM4.45, which is down for 25% since year 2009. It favours the finance and also procurement.
Reputable Brand and Industry position
IJM land is the only listed developer with five anchor projects – The Light, Rimbayu, Shah Alam 2, Seremban 2 and Nusa Duta, besides the other on going township projects in Malaysia. These developments will give IJM Land a strong foothold in the lucrative township development. We estimate that the annual pre-sales at the township may reach RM1bil at the peak for Rimbayu. The company is well-positioned to ride on the buoyant sentiment on the property sector. The recent sector re-rating has largely underestimated the
growth potential of IJM Land. The stock is currently trading at a PE of only 13x, still some 30% below the previous up cycle PE of 20x. Great expertise in green technology building had given great advantage to IJM Land. It has been able to support that expertise through upstream integration, lowering its costs thru bulk purchase. Besides, the existing research and development team for this technology could have accelerated development momentum in green townships. There are green economic activities created and expected to result in spill over benefits for company remaining land bank. Meanwhile in terms of production and operation, IJM Land is more of an existing player in the industries and it got experience in sustainable constructions. The recent announcement of IJM Land project The Light in Penang as GBI certified project explains that the company doing great in green building. This GBI for township further spike up the share price of IJM Land, till date the share price had grown more than 60% since the announcement of the result on previous year. Share price for now is at staggering RM 3.40. The share price is not only show that the company is financially sound but it also tells that the company have a good management of assets. Return of equity increased slightly by 0.3% from year 2012 to 2013 indicates that the shareholder have foreseen the future value of IJM Land. Besides that, the company uses its marketing tool well. The company uses better utilization of internet media and mobile application. As we can see the download rate of these application from IJM Land rise at a rate of 300% compare to past year. The marketing team had create a link on the website of IJM Land, where user can directed to download its IJM apps and also recently the company launched an application for its Pandan Bistari project, namely Sh’ng Villa.
5.1.2 Weakness
Oversupply on Certain Area
Currently, the on-going project which still selling are The Light, Rimbayu and Nusa Duta had applauded in the properties buyers. IJM Land is also getting a high sales and high revenue on these projects after each phase of launching. However oversupply of properties often occurs in the certain area especially southern region.
According to strategic positioning and market penetration of IJM Land,
exclude the property concentration of East Malaysia, most properties selling prices are higher than RM500, 000. This indicates that IJM Land is charging a higher premium and it is a high-priced real estate. However, from the findings in Department of Statistics Malaysia, in 2012 the mean monthly household income of middle and bottom income groups is actually less than RM5, 000. From a loan calculator tool of Maybank, it shows that if a personal who monthly income is RM5,000 want to buy a house which cost RM500,000 with 30 years loan tenure and 6.6% interest rate, the maximum loan that the personal can get is RM450,000 and the monthly repayment is RM2,874 per month. However, the maximum monthly repayments that can approve by bank for the personal loan at just RM2, 000 only. There have 80% of household is actually at the middle and bottom income class. This tells that majority of household in Malaysia is actually unable to buy the property of IJM Land if without enough saving especially Bumiputera and Indians.
Source: Department of Statistics Malaysia
However the majority monthly household incomes in urban area are not more than RM5,000. From this statistics, we also see that currently the price of IJM Land’s project is actually suitable for Wilayah Persekutuan and Selangor residence only.
Mean Monthly Household Income for State
Source: Department of Statistics Malaysia
Because of high pricing of product, it cause oversupply on certain area and finally oversupply on certain area are become a weakness of IJM Land. Under this of weakness, the payback period of product will become more longer. It will make IJM Land faces cash flow problem. Moreover, it also will have a bad impact at development of company such as EBIT is dropped RM12.9 million from 2011 to 2012 because of payback period is long and can’t get profit immediately. Besides this, oversupply meaning it will indirectly increase the resource allocated. More labour force need to allocate to promote and selling these properties. It is estimated that there are financial risk involve in holding unsold properties. It increases the cost of goods sold. It is also one of the reason that net profit margin is dropped 3.04% from 2011 to 2012 due to cost increasing. In additional, IJM Land will also hard
to commerce a new project such as having an initial loan for building. It is due to some of resource such as labour force is allocated to overcome the oversupply. Development at key states will be hard because lack of resource and cash flow due to oversupply on certain area. It is also one of the reason causes the net profit growth is decreasing 12.2% and 79.8% from 2010 to 2012. In conclusion, the weakness of IJM Land is holding too many unsold properties due to oversupply will give a bad influence to development of company and compete with competitors. Same Sector with Parents Company’s Subsidiaries Company
The relationship between IJM Corp and IJM Land is IJM Corp is the parent company of IJM Land. However, under IJM Corp there has a lot of Subsidiaries Company which are included a lot of company is actually same business sector with IJM Land such as at construction and infrastructure part, there have IJM Construction Sdn Bhd, IJM (India) Infrastructure Limited. At the properties part, beside IJM Land, there still have IJM Properties Sdn Bhd, Shah Alam 2 Sdn Bhd. At the site of IJM Land, all of these companies sometime will be form a competition situation with IJM Land. Even these companies which size is lower than IJM Land, but it is still will give some influence to IJM Land.
According to the CEO of IJM Land Dato Soam Heng Choon, IJM Land is not considered develop at India even India has a large market at construction. It is because of develop at India will direct compete with IJM (India) Infrastructure Limited which are owned by IJM Corp and will also grab some market share from there. It shows that IJM Land is sacrifice one of the opportunities due to avoid have a benefit conflict with subsidiaries company of parent company. Beside India, IJM Corp have also some subsidiaries company at Vietnam and Singapore, it will also easily complete and have a benefit conflict with IJM Land when open a new market at these countries. Besides this, at the infrastructure part, IJM own some company such as Road Builder (M) Holdings Bhd, IJM Investments (M) Limited. These companies are concern in project of infrastructure which is also the company taking most of infrastructure project in IJM Corp. In the structure of IJM Corp, IJM Land is concern in development of properties to avoid have a competition between subsidiaries company. It is also one of the reason that IJM Land is own a very low market share at infrastructure sector,
because it have a barriers from parents company is block IJM Land entry to infrastructure sector. Moreover, IJM Corp which are own more than 60% of share of IJM Land. It means that IJM Land is fully controlled by IJM Corp. For a mission of a management, they are responsible to maximize company profit. Therefore, it means that sometime IJM Corp maybe will abandon the benefit of IJM Land in order to care about its own benefit or the development of other subsidiaries company when the benefit conflict is occur.
IJM Land subsidiary by IJM Corp, both also will get a lot of benefits especially IJM Corp. However, at the site of IJM Land, sometime its freedom will limit by parent company due to maximize its profit and lack to care about the benefit of IJM Land. Therefore, the relationship between IJM Land and parent’s company, and which have a lot of subsidiaries companies is same business sector with IJM Land and this threaten IJM Land to develop freely and maximize its profit.
5.1.3 Opportunities
Green building
Green building promotes resource conservation, including energy efficiency, renewable energy, and water conservation. It is consider as environmental impacts and waste minimization, create a healthily and comfortable environment and reduce operation and maintenance costs. Nowadays, most of the country have trend to build an eco-friendly building because of the rapid development has been destroyed the Mother Nature environment deeply. In 24 July 2009, Malaysia Prime Minister was launched National Green Technology Policy to minimize growth of energy consumption and increase national capability and capacity for innovation on Malaysia building. Since January 2010, a total of RM1.5billion has been made available for soft loans to interested parties with low interest rates, including approximately RM 50 million for producer and RM 10 million for users of green technology. Moreover, in the 2013 budget, the government gave and additional RM2 billion for green technology projects under the Green Technology Financing Scheme (GFTS).
Besides, tax incentives were introduced in the hopes of encouraging green technology. First of all, tax allowance for companies investing in
generation of energy from renewable sources and energy conservation/energy efficient activities. Secondly, indirect tax exemptions for equipment used to generate energy from renewable sources, energy conservation equipment, energy efficiency equipment such as high-efficiency motors and insulation materials, and energy-efficiency consumer goods. Thirdly, stamp duty exemption for purchase of property with Green Building Index (GBI) certification. Lastly, income tax exemption on additional capital expenditure incurred to obtain GBI certification.
IJMland is one of the developers who are tending to be a leader of green building in Malaysia. According to the annual report 2012, the project Bandar Rimbayu, formerly Canal City (township) under the silver category had been qualified to receive the GBI certification. According to Malaysian Photovoltaic Industry Association president Shamsudin Khalid, in Malaysia, solar energy is used for two purposes: 1) solar thermal applications, and 2) photovoltaic (PV) technologies. Solar thermal applications are where heat from the solar energy is used for heating purposes, while PV technologies are for electricity generation. Solar panels for either thermal or electricity purpose can be mounted on rooftops. Although the rooftops of house and buildings are said to be “dead space” because they are unused, not all rooftops are suitable to be mounted. Since the electricity expenses are increasing every year because of the commodity price was fluctuated and polluted, so by using solar power in building, it is able to reduce the usage of electricity so it will reduce the electricity bill eventually. The rainfall recorded in some parts of Malaysia has shown a marked increase in the last five years. Commercial and household water consumption has been increasing steadily in the last century, and as the climate warms, other usages of water will increase. With a rainwater harvesting system, a rainwater harvesting system can provide water for non-potable purposes because the rainwater may be contaminated with bacteria, it is often considered unsuitable for drinking without any prior treatment but it is suitable for flush toilets, water plants in the garden, wash clothes, wash the car and general cleaning. Rainwater harvesting also helps reduce your water bills. Besides, it can provide an alternative water supply during rationing or interruption. A rainwater harvesting system also enhances the value of your property and can satisfy the water requirements of various
levels of certifications for a sustainable home. It can form part of the rainwater management scheme, by reducing storm-water run-off, reducing or mitigating the possibility of flash floods.
Source:
http://www.met.gov.my
Population and income level of Malaysia
According to Maybank Investment Bank research, Malaysia is a developing countries and it has around 29.18million (source from index mundi) and the average growth rate is 1.54% – 2.01%. From the graph below shows that that is aging structure in Malaysia in 2012. The highest aging structure in Malaysia is 25-54 years old or occupied 41.2% over the total population and the second highest is 15-24 years old or occupied around 17.2%. It implies that Malaysia has the young aging population structure and it is also implies that the demand for this group of aging (25-54 years old) is the highest because some of them just graduated, some of them need a house for marry purpose and some of them are for investment purposed while the income level is the highest compared to others group age. According to a study by De Leeuw in 1997 shows that the main determinants of the demand for housing are population size and population growth. However, family size, the age composition of the family, the number of children, net migration, and non-family household formation, the number of double family households, death rates, divorce rates, and marriages are other demographic variables that would influence demand for housing. Other factors such as household income, price of housing, cost, availability of credit, consumer preferences, investor preferences, price of substitutes and price of complements all play a role in determining demand for housing.
Age structure (years) | Percentage|
0-14| 29.4%|
15-24| 17.2%|
25-54| 41.2%|
55-64| 7.1%|
65 and over| 5.1%|
Source: http://www.indexmundi.com,2012
Source: http://www.indexmundi.com
Source: http://www.indexmundi.com
According to Malaysia’s Transformation Programme & Reform Initiatives, Malaysia’s vision 2020 is targeted to become a high income nation by 2020 which increasing the GNI from USD 6,700 in 2009 to USD 15,000 in 2020. Therefore, in order to make sure the target is achieve, the government of Malaysia will take step one-by-one. The 2012 Household Income Survey found the average monthly income of Malaysian households rising from RM4,025 in 2009 to RM5,000 in 2012, an increase of 7.2% annually. In announcing the statistics here today, Minister in the Prime Minister’s Department Tan Sri Nor Mohamed Yakcop said the urban household monthly income increased at a rate of 6.6% a year from RM4,705 in 2009 to RM5,742 last year, while the rural household monthly income rose 6.4% annually from RM2,545 to RM3,080. “The significant income rise was achieved with the federal government’s efforts in ensuring continuous, stable and strong growth in the economy. The impact was via widespread increase in economic opportunities which generated employment with business and industrial development in various economic sectors,” he said. Nor Mohamed said all states also recorded better average monthly household incomes with Kuala Lumpur leading with the highest growth of 14.9% from RM5,488 to RM8,586.
Source: http://www.statistics.gov.my, 2012 Household Income Survey.
Source: http://www.statistics.gov.my, 2012 Household Income Survey.
Malaysia-Singapore high-speed rail link
In February 2013, the Malaysia government and Singapore government have announced the breakthrough agreement at a press conference by building up Malaysia-Singapore high-speed rail link and this rail is targeted to cut travel time until around 90 minutes. The high-speed train “is a strategic
development that will dramatically improve the connectivity between Malaysia and Singapore,” the two governments said in a joint statement. “It will facilitate seamless travel between Kuala Lumpur and Singapore, enhance business linkages and bring the people of Malaysia and Singapore closer together,” they said. “Ultimately, this project will give both countries greater stake in each other’s prosperity and success,” it added. It now takes around four hours to drive from Singapore to Kuala Lumpur, which are about 300 km (186 miles) apart. A flight takes around 50 minutes but travellers must spend time checking in and out of airports, as well as taking a one-hour bus ride from Kuala Lumpur International Airport to the city centre.
By taking this advantage, the Iskandar Project Malaysia will be the major beneficial because it make convenient between 2 countries, especially the property in that area. Iskandar, three times the size of Singapore, has seen a surge in investment from the city-state after the two governments signed a broad agreement in 2010 to address longstanding issues. In October, Singapore government-linked firm Ascendas, whose projects include the Singapore Science Park and the International Tech Park in Bangalore, said it will help build a $1.2 billion industrial park in Iskandar. Malaysia Prime Minister Najib and Singapore Prime Minister Lee Hsien Loong were officiating at joint venture projects involving their sovereign investors Khazanah Nasional Bhd KHAZA.UL and Temasek Holdings TEM.UL in Singapore and Iskandar. The two leaders will also be at the unveiling of a project by Singapore’s CapitaLand Ltd in Iskandar, the first in the zone by Southeast Asia’s biggest developer. According to Reuters, the two leaders will also officiate joint-venture projects involving state investors Temasek Holdings and Khazanah Nasional Bhd in Singapore and Iskandar, just across a narrow strip of water from the city-state.
Temasek and Khazanah agreed in 2011 jointly to develop “wellness” projects in Iskandar that they believe will be worth around RM billion when completed. Singapore companies dominate the firms setting up factories in Iskandar after being initially lukewarm. Interest picked up only after the two countries signed a broad agreement in 2010 to address longstanding issues. A number of Singapore residents have already bought homes in Iskandar, including Templeton fund manager Mark Mobius, who
has a bungalow for weekend getaways. Singapore government-linked firm Ascendas, whose projects include the Singapore Science Park and the International Tech Park in Bangalore, said in October it will help build a US$1.2 billion (RM3.7 billion) industrial park in Iskandar. Therefore, with the Iskandar Project and Malaysia-Singapore high-speed rail link project, we believe the property surround Iskandar will be increases. The reason is because the Iskandar project is estimated to create 50,000 jobs in attractive the industry in Malaysia and Singapore. Besides, Singapore had announced the new taxes policies imposed on the properties in Singapore in order to slow down the properties price. So, it will make Singaporeans and other foreigners switch their preference to Iskandar Project Malaysia and it will boost up the properties price. According to the IJMland annual report 2012, in the page 158-162 under the top ten properties, it is having around 11 thousands Sq.ft in Johor Bahru Johor Darul Takzim. Furthermore, the advantage form the high-speed rail is the rail will stop in few places along to Kuala Lumpur from Singapore. IJMland had large amount of area was located in Seremban, as our estimate it will be a good potential to develop in future because of the convenient transportation.
5.1.4 Threat
Threat of construction sector
Material Costs
According to the Master Builders Association Malaysia (MBAM), Matthew Tee, the cost of building material costs are expects an increase in 2013 due to the growth of the sector compare with the cost of 2012 have been generally stable. One of the reasons that cause the cost become higher is the import duties on heavy machinery. Besides that, the bottleneck in supply to meet the higher demand is also the other reasons that cause the cost of material become higher. On year 2011, Malaysia government has introduced the National Wages Consultative Act 2011 is the main reason that causes the cost become higher and higher. According to the minimum wage requirement, workers in Malaysia were to receive minimum wages of RM900 for Peninsular Malaysia and RM800 for Sabah and Sarawak, which is apply for the foreign worker and local worker.
From chart 1, we could found out that the minimum wage policy for Peninsular Malaysia is from RM674 to RM900 and the percentage of that adjustment is 33% which means that the cost of the labour force is increase 33% for IJM Land under the minimum wage policy. For Sabah and Sarawak, the minimum wage is from RM579 increased to RM800, the percentage of the adjustment is 38%, higher than Peninsular Malaysia 5%.
Chart 2 is listed down the percentage of the worker who is earning below the minimum wage by particular sector. Construction sector is the second higher according to the chart 2 which is 29.2% of the construction worker is under pay. Bank Negara Malaysia claimed that by introduce the minimum wage policy will alleviate labour market and distortions and maximise the efficiency of the labour usage in economy. It would lead to low labour participation rates in the economy when wages are artificially suppressed below productivity levels. This situation is happening at Malaysia now whereby most of the employer prefers to employ that foreign worker who claims for lower wages and lower benefit. Second, by increasing the income of the low-wage workers, it would fulfil their basic needs and the economic welfare of workers. When they are getting more salary means that they would increase their consumption and by the way increase the domestic demand from the macroeconomic perspective. Third, minimum wage policy also part of the effort of government to meet with their objective of transforming Malaysia into high income and high productivity economy. Firm may encourage investing in automation and newer technology that could increase the productivity as the relative cost between capital and labour narrows. Political Factor
As we know, the construction sector of Malaysia is fully depends on the Malaysia government. Malaysia government has introduced a lot of infrastructure project on year 2012, which include the Mass Rapid Transit (MRT), Light Rail Transit (LRT) and initiatives under Economic Transformation Programme (ETP).
However, the General Election is going held on this year and it is going to impact the construction sector. According to the JP Morgan Securities, the investors worry that if the opposition wins. When there is uncertainty, investors typically act negatively. JP Morgan Securities added that an opposition victory could leave question marks
hanging over the current government’s infrastructure programmes, which would likely go ahead as planned if the Barisan National is returned to power. Labour shortage
Master Builders Association Malaysia (MBAM), Matthew Tee mention that the sector is already faced the shortage of skilled labour. He added that the wages for skilled workers have increased in the range of 20% to 40% while those of general workers have increased by 20% to 30%. Tee explains that the percentage of raising the wages for the skilled worker is higher than the unskilled worker is due to the lack of skilled worker. Bolton Bhd executive director Chan Wing Hong says that the booming development in Indonesia has led to a shortage of Indonesian labourers coming to Malaysia. He added that the problem is mitigated by hiring labourers from other countries like Bangladesh, but they lack the specialised skills and communication edge that Indonesians have.
As we know, most of the labour force for construction area is come from foreign country, likes Indonesia, Bangladesh, Myanmar and others. Through table 1, we could found that the number and the percentage of the foreign labours is decreasing start from year 2007. So, construction is having a shortage of labour force, especially skilled worker.
Guidelines on Responsible Financing
To ensure prudent, responsible and transparent retail financing practices for both consumers and financial institutions, Bank Negara Malaysia (BNM) has issued the Guidelines on Responsible Financing towards ensuring that the household sector and credit market remain resilient. The guidelines apply to loans offered to individuals, namely home financing, personal financing, vehicle financing, credit cards, charge cards and financing for the purchase of securities. Financial institutions are required to ensure that appropriate consideration is given to borrower’s need and financial circumstances to ensure that individuals and households borrow within their means. One of the main changes for personal loans is financial institutions must take into consideration all debt repayment obligations and income after statutory deductions, for example income tax and SOCSO. Net income
calculation:
Net income = Gross income – EPF (CPF) – Tax – Socso
1) Compulsory to deduct SOCSO for all loan application.
For customer who is unable to produce the payslip evidence on the amount of SOCSO deduction and they are under employment, banks will presume SOCSO deduction amount at RM14.75. Only the following category of borrower is exempted from SOCSO deduction: – Government servant
– working with foreign employer
– Self-employed (Owned business or family business)
For example:
Mr.Chan’s monthly gross income is RM 5,000. His EPF contribution is RM 650 / month, Tax RM 100 / month and SOCSO is RM 14.75. He plans to buy a condominium in Kota Damansara. With the new guidelines, banks’ will calculate his eligible income based on Net income. Net income= RM 5,000 (gross income) – RM 650 (EPF) – RM 100 (Tax) – RM 14.75 (Socso) = RM 4235.25 Sources: Bank Negara Malaysia
Besides that, the other main change for Guidelines on Responsible Financing is the loan-to-value ratio of 70% applied to 3rd housing loans onwards. Under this regulation, the maximum loan amount that the applicant could apply from the bank is 70% of the house value.
5.2 SWOT Matrix
StrengthsS1 Vast ExposureS2 Overseas VentureS3 Reputable BrandS4 Industry Position| Weaknesses W1 Oversupplies in areaW2 Competition with parent company|
OpportunitiesO1 Green BuildingO2 Population & Income LevelO3 My-Sg High Speed Railway& Greater KL| ThreatsT1 Material CostT2 Labour ShortageT3 Household debtT4 Political Influences|
6.0 TOWS Strategy Proposal
We purpose S1,O1, and O2 as SO Strategy. Meanwhile S2,S4,T1 and T2 as ST Strategy. Besides, we discussed that W1,O1 and O2 to be WO Strategy. Lastly,
W1 and T3 to be WT Strategy. 6.1 SO Strategy
We suggested they can focus more and concentration on investing in green environment technology area. IJM Land should take account of their strategic analysis which is its strength in exposure where it got a stretch of strategic places of land bank across Malaysia from Penang, Klang Valley to Johor. These land bank located at three key states at the same time is the places where mostly rich people stay. Also the developed and developing projects of IJM Land have established its brand identity over there. Since IJM Land is leading in green environment technology already, they should have reinvested into the research and development whether in engineering, construction or architecture. There are a lot of new green technologies to be discovered, yet they should focus on renewable and recyclable energy used in their building. With the high population growth in age group of 25-54 at about 41.2% and there are potential of 60% people who have purchasing power of goods and services. Hence, it is wise that IJM Land continue to develop as the leader in sustainable construction. For example, IJM Land can give education of general public of the importance of applying green initiatives in green building also to try and convince them about IJM Land’s effort in pushing the technology way ahead. So, our group thinks that the possible solutions for IJM Land is employ the green environmental technology in building and further its research and development so that they could attract a group of property buyer which is environmental conscious at the same time those buyer are the one with higher level of income. IJM can sell their green idea and having more intensive campaign in areas of population with highly educated person and at the same time high income level. Using internal strength to capture external opportunity like green technology is a good fit to IJM Land. The impact is that IJM Land creates brand awareness and more competitive real estate developer by joining green building index. This could be an advantage where people nowadays would want to purchase sustainable construction compare to traditional building. Sustainable building got more features and it is good in water and energy efficiency. 6.2 ST Strategy
The strategy that we propose for ST strategy is technology venture. Technology venture means that learns the latest technology with those
experts in that particular sector and apply it in our own project. The technology that we propose IJM Land to learn is green technology. Although IJM Land currently is the green technology leader in Malaysia, however compare with foreign construction company IJM Land still have a lot of spaces need to improve. The reason why we propose IJM Land have a technology venture is because IJM Land has expand their business into overseas market through joint venture with foreign local company for a development of one block of five star hotel-cum-residential apartment and three blocks of residential apartment in London. Besides that, IJM Land also expands their business into China and Vietnam.
On the same time, IJM Land is facing the material cost increased sharply by this few years on the same time. The reason that cause material cost is getting higher is because the supplier is facing a bottleneck on supply the material to the huge demand. Therefore, technology venture could minimize the threat of IJM Land which is high material cost with its strength which is currently joint venture with foreign company to have a development project in London. Since IJM Land is currently joint venture with the foreign local company, so there is a chance for IJM Land to learn and import the latest construction technology in foreign country to overcome the high material cost. For example, China’s Board Group has erects 15 story hotel in less than 6 days by a team of 200 workers. According to the Board, the hotel is built to withstand a 9.0 earthquake while using one sixth the material and costing 20% less. Board Group claims that their buildings are simply better for construction crews, the environment and residents. The building itself uses one sixth the materials of a comparable facility with 15 stories and 600 hundred square meter per floor. Waste generated by construction was only 1% of the total weight, not including waste generated during prefabrication. So, IJM Land may joint venture with China’s Board Group and learn the technology that how they minimize their material by 20% less and eco-friendly on the same time. Besides that, foreign construction has applied green technology on their project earlier than Malaysia. They are more expert on the green technology than IJM Land who is the market leader for green technology. Therefore, IJM Land may fixed their leader position through learning more and developing more green environment technology with the foreign company. Moreover, most of the construction project’s cost is getting high is due to Malaysia is
lack of high technology machinery and professional engineering to develop. Most of the project, for example SMART, KLCC and more are employ the foreign construction company or engineering to become the advisor and main developer of the project. The cost of those foreign construction companies is high and most of the time we have to share the profit of that particular project with them at the future time. So, if IJM Land could build up a long term relationship with those company and engineering through sending their engineering to the foreign construction to learn and share the technology that had been developed by them. It could directly reduce the cost of the project. 6.3 WO Strategy
Based on our research and analyse on IJM Land, we had determined few weaknesses and opportunities. By using WO strategy, we need to minimize weaknesses by utilizing opportunities. After discussion, we had decided to minimize the oversupply building in certain area (W1) which is due to poor researches on that area during the progress of approval projects. From our research, we found that many construction companies had wrongly evaluated on certain area and this thing always happens in those areas which are lack of populations and infrastructures such as rural area. The reason is, in rural areas, there is lack of job opportunities for people and it has causing income level decline. Besides, there are some people will leave their town and move to other places in order to get a jobs for their life. At the end, those building build on rural areas will facing difficulty to sell. Therefore, in order to solve this problem, those companies need to conduct a lot of researches before making any decision.
However, there is an opportunity for IJM Land to solve the weakness by involving themselves into the Iskandar Project in Johor. By evaluated the Iskandar Project, we found that that is a lot of chances for properties companies because of the project will attract many companies to set up their firm and it will lead to many jobs created. Moreover, the infrastructures such as Malaysia-Singapore high speed rail link will give a chance for foreign investors such as Singaporean investors invest in Iskandar Project. Besides that, Singapore had announced the new taxes policies imposed on the properties in Singapore in order to slow down the properties price. So, it will make Singaporeans and other foreigners’ switch their preference to Iskandar Project and it
will increase the demand in Malaysia. So, we strongly believe that with basic infrastructures and income, the demand on properties in Johor will increase and it is able to avoid the oversupply problems. Furthermore, the consciousness of society wills also affected by the education level especially the climate nowadays was extreme vary. In addition, the globally consciousness nowadays also trend to have a sustainable construction when developing counties. Therefore, IJM Land having an advantaged by involving in Iskandar Project because it is one of the green building leaders in Malaysia. The proposed strategy will be scale down their project to the property hotspot and reduces the risk of oversupply problem. In brief, we strongly believe that the good economic condition will lead to employment rate maintain in satisfy level and finally it will lead to increase income level of populations. So, in order to make sure the economic maintain in comfortable level, the political factors are the main issues. Besides, the education level and consciousness of people will also changing the trend of demand by people. So, by having efficiency and experience management team, we believe that IJM Land is able to produce a high quality building by fulfilling the requirement and demanded of the market. 6.4 WT Strategy
By employing the WT Strategy is using the defending method to reduce internal weakness and at the same time solve the external threats. IJM Land is facing some of the weakness and threat currently. In order to overcome these weakness and threat to make company grow, we proposed to give a try on discounted and controlled property prices. Currently, one of the weaknesses that IJM Land faced is oversupply of property in certain area especially southern region and also facing the threat of guidelines on responsible financing. In order to overcome these problems, IJM Land can use the theory of low price high demand. IJM Land can give some discount or promotion such as selling price reduce, low down payment and free of legal fees and stamp duty on these certain area which is facing oversupply on property to attract more customers to buy these properties especially whose are low turnover of cash.
When the selling price is lower, it means investors can also able to earn more profit at investing on these properties, it also helpful for attract more investors to buy these properties for their properties investment. Moreover, due to the guidelines on responsible financing release by BNM recently, middle and lower income class become more hardness to own a new property with their current income. Discount and promotion given for these customers, they will able to make these of customers more ability to hit the income requirement of personal loan it is because of buying a lower price of property which income requirement also will become lower. Therefore, there will more personal will able to own their own house and also for some personal they also able to buy a second or third house for investment. For IJM Land, the problem of surplus is also will be solved. Besides the threat of guidelines on responsible financing, IJM Land is also facing the shortage of labour force. In order to overcome the labour shortage, and oversupply of properties in certain area, the timing management of project and allocation of labour force is very important for IJM Land. If too many project progress with concentrated, it will needed more labour force at the same time, it will very easy to cause the shortage of labour force occur. In addition, if there is case where large scale project on going , it will push up the properties supply in a period, it not only will causes the labour force inability allocate to promotion and selling of these project immediately with nicely and the demand of properties is also hard to fulfil the increasing of supply immediately. Therefore, if there are many project is progressing, IJM Land should delay some of new project release or avoid getting a new project, it will make IJM Land more able to allocate its labour force in promotion and selling of product. IJM Land can also reduce the size of project if demand is not high, keep these land and develop at the right time or demand of this certain area is growing. Besides this, IJM Land also need to provide a good benefit for their employee to attract more people from competitors interview for work at IJM Land to fulfil the labour force that IJM needed. When the labour force in Promotion and selling of product is enough, and also the market demand able to fulfil the supply, the oversupply of properties is also can avoided at the same time. 7.0 SFA
SO: Improve the effort in green environmental technology in building and swap the concentration of buyer to higher income group. Suitability| |
Feasibility| |
Acceptability| |
Currently the biggest problem that IJM Land faces is oversupplies of property. So, to solve this problem, IJM Land can improve its green technologies in building so that it can enjoy the tax deductible allowed by government while the housing prices maintain stable. Besides that, IJM Land can positioning themselves in the green technologies position since that is no any property developers are setting themselves in this area. So, by differential positioning with its competitors, IJM Land is able to sell their building with unique features and fulfil the requirement of demander. From the above strategies, we propose that the SO strategy is suitable, feasible and acceptable for IJM Land Berhad in long term growth while the second strategy is only suitable but not feasible and acceptable for IJM Land to pursue. Suitability
IJM Land implement this strategy is suitable since improves the technologies and green building is an opportunity for IJM Land, IJM Land should further expand and explore the technology employ in sustainable construction in order to attract more people or target buyer. Besides that, the government policies such as the GBI certification also help the property developer go into this area because that is stamp duty exemption for those buyers who are purchasing the properties with GBI certification. Therefore, it will increase the demand from demander and building a technologies gap with its competitors. Research and development in this field is not only can gain more new buyers from other while they also promote sharing of technology with the venture company. This strategy can benefit the buyer need and SMART objective of company met with current strategic position too. IJM Land chose to remain top in green construction and sustain its position. On the effect of strategic perspective, it improves on profitability ratio and return on asset. Feasibility
The development requires a large land bank and advance green technologies that only available in IJM Land at the moment because of its vast exposure as top property developer in Malaysia. This strategy is feasible as IJM Land does not require a lot of effort to continue development in sustainable construction where they can improve the green building using advance
technology. Hence financially we project an increase of operating expenses by at least 5% annually. As a big and experience sustainable developer in local market, it is good for IJM Land to go into green building more as the diversity and flexibility increase. With the competitive advantage own by IJM Land like innovative and environmentally sustainable, this strategy is feasible. Since it is existing technology, we propose that the profits and benefits would be much higher than its expenses. So, we could expect a return increment in coming years.
Acceptability
This strategy is acceptable since the company’s goal is to maximize the shareholders wealth by maximize the profits. And employing this strategy can increase the development value of land bank. The stakeholders will accept this strategy because shareholders only have to invest less capital on this strategy. Besides that, a wide CSR program as published on website show that company putting a lot effort given to remain competitive. Furthermore, the profits that can gain from this strategy are much higher than their expenses in long term.
WO strategy
* Discounted property prices to overcome the oversupply of houses in certain area. Suitability| |
Feasibility| |
Acceptability| |
The strategy is not accepted and feasible because it will reduce the company profits and increase costs. So, in the business world, the worse competitive is the pricing war for their products. Therefore, it is not a long-term strategy. It is suitable when we temporary solve the oversupply issue because by reducing prices will increase the demand from demander. 8.0 Implementation
An implementation is very important to IJM Land now because it will help them achieve their objective. From the SFA analysis, we found out that first
strategy is best strategy to implement. We will focus on the improve effort in green environmental technology in building and swap the concentration of buyer to higher income group in this industry the products that are close substitutes for each other. Therefore after we research about the market and found out that buyer willingness to buy on green building had increased. Besides, regulatory and legal issues within the industry had caused increased in demand of green building. The requirement of corporate to purchase office with green building index and also the tax reduction had further support the growth of this field. The profit potential of this industry is quite low due to research and development employed and return will be gradually increase year by year as the technology keep on improving. The competitors had not go into green home that serious and they did not have landbank to develop. Hence we purpose this strategy as our main strategy to use after conducting SFA analysis.
8.1 Functional Level
Financial
Ensure and raise capital for green townships
Townships hold a high market share ratio and high market growth rate, so IJM Land must ensure and raise more capital in research and development in green building by adopting green measures in townships.
Cooperate with marketing department to swap our target buyer This is to reduce the red tape effect and improve communication between buyer and selling. We have to brand the company as sustainable property developer.
Increase budget spending in research and development and track its profit in long term IJM have to increase overall budget allocation and usage and tracking down the profit in long run. For example, R&D department should have employed more people to work on green technology. Marketing
Reward customer with packages
IJM Land can give out packages like buy house free car or lucky draw prizes for putting deposit on houses.
Operation
Apply more of its project under Green Building Index
To establish a good brand image and buyer wants, IJM Land have to bring its project under GBI, all of its material used must have fulfil the requirement by the bodies and also the authority from Green Mark.
Human Resource
Employ people to ensure all functional efforts to implement the strategic decision Human resource is important as exceeds resources may increase the cost and lack of resources may also make the company loss in income.
8.1.2 Business Level
We separate this into two stages. Our business should expand wide in 10years and 20years term. Since the property development takes time. One township project takes around 20 years to completely develop. It is important where now we are enjoying the tax reduction from government, we should employ more resource to green environmental building so that it could further improve our competitiveness and reduce cost of sustainable construction. Green Township
Our business should target at green townships. We choose to participate in more CSR program and allocate money in R&D department to produce more innovate green technology. We could save in the long run as we might need more capital initially. The cost can be offset when we are enjoying arbitrage profit later when property price increase.
Now10 Years20 Years
In 10 years term- a known company for green township
20years – expand its initiative to global level and having a great management team by having foreign venture. Continue this culture and expand the practice so that can further create awareness and compete with international real estate property developer.
8.2 Contingency Plan
A contingency plan is very important to IJM Land now because it is a backup plan to help them achieve their objective when there are uncertainty issue happens and causes the first plan could not implement as expected. From the SFA analysis, we found out that joint venture with foreign construction company is the second best strategy for IJM Land. We will focus on the how to joint venture with foreign construction company especially those having experience at green technology and import those technologies into Malaysia.
Functional Level
Financial
Having a health financial situation
Foreign Construction Company is concern about the financial situation of their joint venture company. So, IJM Land has to concern about the way they manage their financial, especially the way they raise their capital.
Increase budget spending in research and development
Research & Development department has to learn those technologies that learn from those foreign companies and the equipment for those technologies is important for them to apply it in Malaysia. To achieve the objective, R&D department need to allocate more budgets due to the cost is high at most of the time. Marketing
Rebranding the company as expert construction company on green technology According to our research, green technology is become the trend for the construction area, especially those high educated consumer. By reposition as an expert on green technology, it could IJM Land attract more company joint venture with them. Operation
Build up a good relationship with foreign construction company To achieve the objective which is joint venture with foreign construction company, IJM Land has to join more construction association to build up their networking and brand in the overseas, especially those who is leading in green technology.
Human Resource
Employ people to ensure all functional efforts to implement the strategic decision Human resource is important in the contingency plan. Since green technology requires a lot of technical and knowledge in that particular area, so human resource is key resource to ensure contingency plan could success. Therefore, IJM Land human resources department have to recruit those talents in green technology work with IJM Land, such as top notch engineer and architect
Research and Development
Set up their own research and development
IJM Land has to set up own research and development department to continuously put more effort in developing green technology. The R&D team should work around the world to learn and develop the latest green technology around the world. Having more workshop and attend more forum or conferences are one of the way to get and learn the latest technology. 9.0 Conclusion
This assignment examined the issue of sustainable construction in the township development of IJMLand. Our main focus is on green home and technology. It had urged strongly that the region is unique and that it demands a fresh set of perspectives, ones which require an understanding of the particular environmental and cultural setting of the region. It has analysed the ways conventional development strategies have usually lead to unsustainable bases for development with unequal and sometimes destabilising social outcomes. More positively, it has shown that there are alternatives, many of them apparently sustainable, and these are being implemented, modified and extended mainly by the autonomous actions and initiatives of local residents, though often in concert with external agencies.
It is suggested that present development strategies is not prominent and future is seriously in doubt as they will be taken over by wider processes of global economic and political transformation as well as environmental change. Second, it extracts examples of more sustainable activities that are evolving separately from the mainstream development path. Such that they prove that forms of sustainable development are possible and also apparently
successful ‘development’ like The Light, Penang held a key element where, people are concern for human livelihoods as well as the environment.
Here are some implication for development practice, such as re-evaluation on the structures and philosophies involved in the development activities of government agencies. Besides that participation is also a key element of sustainability. The demand of buyer is also crucial. To conclude, we suggest that the way sustainable development is conceived may need questioning. The actions purpose in implementation plan can achieve greater sustainability, and will aggregate into beneficial change at the global level.
FIN469/FIN419FINANCIAL STRATEGY – MAY 2013
Date: 25th June 2013
PEER EVALUATION By: Tan Ting Hua
JUSTIFICATION FACTORS| MEMBER’S NAME|
| Yap Boon Hui| Lee Boon Hou| Lee Kang Nian|
1. Willingness of the member to complete assigned task and responsibility| 10| 10| 10| 2. Ability of member to meet deadlines.| 10| 10| 10| 3. Cooperation with other team members.| 10| 10| 10| 4. Quality of the member’s works| 10| 10| 10|
5. Member’s overall contribution to the discussion and completion of the project| 10| 10| 10| TOTAL| 50| 50| 50|
Remarks:
Signature & Name: __________________________________________
FIN469 FINANCIAL STRATEGY – MAY 2012
Date: 25th June 2013
Self evaluation By: Tan Ting Hua
My contributions:
In this assignment, I had in charge of the TOWS matrix and SFA. After our group had determined the strengths, weaknesses, opportunities and threats of the IJM Land, we had make a discussion regarding how to proposed the SO
strategy, ST strategy, WO strategy and WT strategy by using the SWOT analysis. So, after the discussion, we decided to allocate each person prepare a strategy that we had determined. Then, my job is helps them check the strategy whether match with the discussion we had done before. So, when each strategy is accepted by our group members, then I am taking the responsible to evaluate each strategy proposed through SFA. Finally we had choose SO strategy as our long-term strategy because only SO strategy fulfilling the criteria of SFA. Throughout the whole process of TOWS matrix and SFA, my groups’ members had given a lot of precious ideas to me on how to proposed the TOWS and evaluate the SFA.
Feedback on the course – interesting? Useful? Beneficial? Practical? Please explain
After this course and the assignment I had been done, I had learned a lot such as how to evaluate a company vision and mission statement and provide a SMART objective o the company. Besides, I also learned how to evaluate a company through SWOT analysis and how to evaluate the company product through BCG Matrix. So, by doing these 2 analyses, I am able to know well about the company currently situations so that it also helps me to assess the performance of the company by compare to other companies or industry. I believe that, this course is useful and beneficial for me before I gone through the real investment field especially I hope to become a financial analyst in my future career life. Throughout the assignment, I also learn a lot of useful knowledge and practical experiences those I had never known before from lecturer. Furthermore, I also how to propose the TOWS matrix such as SO strategy, ST strategy, WO strategy and WT strategy for the company by using SWOT analysis, so that I am able to know what kinds of strategies are appropriates for the company so that it can helps their company to growth.
Which part of the course do you like most? Why?
(models/frameworks/theories/tools/presentations/discussions/feedbacks etc)
Throughout this course, I prefer the discussion between all the members and lecturer because the different opinion from different they are useful for me to think out of the box that I never known. So, I am able to evaluate a
company more detail in future. Besides, I also prefer the steps taught by lecturer because it helps me to easily evaluate a company. Furthermore, the casual presentation required by the lecturer is helpful for me because it allows me to improve my presentation skills and become more bravely before the final presentation. At the same time, the comment given by the lecturer also allows us to correct the assignment weaknesses. Moreover, the theories part is helping me to improve the knowledge of the basic understanding. It is sometimes useful for me when I am doing assignment but it is also quite boring for me to learn.
Signature & Name: ______________________________
FIN469/FIN419FINANCIAL STRATEGY – MAY 2013
Date: 25th June 2013
PEER EVALUATION By: Yap Boon Hui
JUSTIFICATION FACTORS| MEMBER’S NAME|
| Tan Ting Hua| Lee Kang Nian| Lee Boon Hou|
1. Willingness of the member to complete assigned task and responsibility| 10| 10| 10| 2. Ability of member to meet deadlines.| 10| 10| 10| 3. Cooperation with other team members.| 10| 10| 10| 4. Quality of the member’s works| 10| 10| 10|
5. Member’s overall contribution to the discussion and completion of the project| 10| 10| 10| TOTAL| 50| 50| 50|
Remarks:
Signature & Name: __________________________________________
FIN469 FINANCIAL STRATEGY – MAY 2012
Date: 25th June 2013
Self evaluation By: Yap Boon Hui
My contributions:
I view this assignment as a crucial assessment throughout my university subject, as it is important for me to kick starts a career in analyst. SWOT
analysis and BCG analysis is one of the part done by my member, we discuss and found out the company background and current situation, we discussed the implementation that is available through the SO Strategies. The art done by me is implementation plan and conclusion of this assignment. I would say that my job is to help discuss about the implementation that can be employed, whether functional or business level. We come out with different taught and lastly my member evaluated my work and we decide to come out a implementation with 10 years and 20 years term. This is because the township development often takes 10-20years to form. It is hard to evaluate a construction sector in short-term. Besides, I write a lot on conclusion where after my reading on all member work.
Feedback on the course – interesting? Useful? Beneficial? Practical? Please explain
This course is beneficial to the writer as we learn on how to overview a company. Start from beginning, we learn on how to analysis a company mission, vision, and background. Besides, we learn company internal and external analysis, which also including financial ratio analysis. Other than that, we learn about how to analyse the SWOT of a company and come out with TOWS Strategy. Besides, we also noted that BCG analysis and SFA analysis can further value an company. Lastly, after we come out with the implementation base on the problem of the company.
Which part of the course do you like most? Why?
(models/frameworks/theories/tools/presentations/discussions/feedbacks etc)
I like presentation part the most. Because I can have a chance to see the mistake done by groups and also identify the important thing need to be including in the presentation. There is also a lot of discussion to be included in the presentation. We have to prepare the detailing chart on the presentation.
Signature & Name: ______________________________
FIN469/FIN419FINANCIAL STRATEGY – MAY 2013
Date: 25th June 2013
PEER EVALUATION By: Lee Kang Nian
JUSTIFICATION FACTORS| MEMBER’S NAME|
| Tan Ting Hua| Yap Boon Hui| Lee Boon Hou|
1. Willingness of the member to complete assigned task and responsibility| 10| 10| 10| 2. Ability of member to meet deadlines.| 10| 10| 10| 3. Cooperation with other team members.| 10| 10| 10| 4. Quality of the member’s works| 10| 10| 10|
5. Member’s overall contribution to the discussion and completion of the project| 10| 10| 10| TOTAL| 50| 50| 50|
Remarks:
Signature & Name: __________________________________________
FIN469 FINANCIAL STRATEGY – MAY 2012
Date: 25th June 2013
Self evaluation By: Lee Kang Nian
My contributions:
In this assignment, the work that I main responsible is financial analysis, competitor comparison and the detailing of IJM Land. Because of in my part likely is an independent part and not a main part compare with other part, so it is hard to have a high contribution, so totally my contribution is not the important part but necessary for our assignment.
However, in other part, I was playing an assistant role such as I share my financial analysis and competitor comparison result for my teammate to help them make out SWOT, TWOS and other part. Moreover, I also give them some idea and some of opinion based on company current financial and competition situation to help them can make strategy is matched and suitable for current company situation.
Feedback on the course – interesting? Useful? Beneficial? Practical? Please explain
In this course, in the analysis part, I think it is very useful and
beneficial, it teach us and make us able to insight a company situation. In this course, I knew that a financial analysis is actually not too accurate to show a company situation, such as ROA, decrease in ROA not means that poor perform, it can have many reason. So, other analysis such as SWOT, BCG is can make us more able to insight a real company situation, and compare with other company, foresee it future perform and it ability of develop and make profit, and decide this company is suitable to invest or not.
However, in the strategy part I think it is more suitable for other course such as marketing and business admin, because in my view most of the strategy that my group and other group make is actually can’t control and make by a financial manager or financial department, it more related with admin, marketing and the management. So, I think that this subject is necessary for our finance student, but no need have a double module in this subject. Financial analysis or the strategy that really for financial such as how to control the fund to overcome a company weakness is actually need us more focus and learn.
Which part of the course do you like most? Why?
(Models/frameworks/theories/tools/presentations/discussions/feedbacks etc)
The part of the course that I like is presentations part, because of in the presentation part, I’m learn more about the presentation skill, how to control my tightness, I also know more about how to make a PowerPoint slide can show my point clearly and simplify. All of these are very important for my career at the future. Moreover, I can also know about the work that other group done, it can let me find out where my mistake and also learn and study what the part that other group done well.
The second part that I like is discussions, in discussion, I learn about the communicate skill, and the skill of how to cooperate with my teammate. Beside this, in discussion part I also knew that argument in a team not necessarily is a bad thing, as long as teammate can list what point they disagree and you can open your mind to accept other people’s idea and argue, analysis what they said, it is very helpful to improve and correct your work to become more nicely and perfectly. Therefore, I knew that knowledge of a
people is actually very lack, discussion let me and my teammate sharing our knowledge and our view, and it make our work done well.
Signature & Name: ______________________________
FIN469/FIN419FINANCIAL STRATEGY – MAY 2013
Date: 25th June 2013
PEER EVALUATION By: Lee Boon Hou
JUSTIFICATION FACTORS| MEMBER’S NAME|
| Tan Ting Hua| Lee Kang Nian| Yap Boon Hui|
1. Willingness of the member to complete assigned task and responsibility| 10| 10| 10| 2. Ability of member to meet deadlines.| 10| 10| 10| 3. Cooperation with other team members.| 10| 10| 10| 4. Quality of the member’s works| 10| 10| 10|
5. Member’s overall contribution to the discussion and completion of the project| 10| 10| 10| TOTAL| 50| 50| 50|
Remarks: The group member is given a lot of cooperation in this report. The entire job that has distributed is done on time and it is totally prefect. When we are facing a problem, we would also solve it together.
Signature & Name: __________________________________________
FIN469 FINANCIAL STRATEGY – MAY 2012 Date: 23 June 2013
Self Evaluation By: LEE BOON HOU
My contributions:
In this report, I am in charge in SWOT analysis of IJM Land. It is a quite challenging job, because a good analysis needs to have a good knowledge and always update you to that particular sector. However, I do not have any knowledge and seldom follow the latest news for the construction area. So, I have to read a lot of news and report during analysis the SWOT of IJM Land. Although it is quite tough, I still enjoy the process in learning new sector knowledge. Besides that, I am also in charge in the contingency plan of IJM Land. It needs us to a lot of the research while doing the contingency plan of IJM Land. We have to evaluate the entire department job scope when
applying this plan. We have to list down what do the department need to do to ensure the plan could run smoothly. Feedback on the course – interesting? Useful? Beneficial? Practical? Please explain For my opinion, Financial Strategy is a quite interesting course. The reason why I think so is due to the way lecturer teaches us. Since Ms Mah has quite a lot of experience on the investment area, so she will always update us the latest news on investment area and share with us how to analysis a company and investment. Besides that, Ms Mah also teach us a lot on how to propose a strategy to a company through the seven steps that summaries by her. Which part of the course do you like most? Why?
(models/frameworks/theories/tools/presentations/discussions/feedbacks etc) The part that I like the most in this course is the model and frame. Financial strategy is design for helping us to learn how to propose a strategy and analysis a company. It is a very important skill for us when we are going out to work at the future. Through the model and frame of this course, we could learn the way to prepare a proposal and how to present it out to the public. I think that it is totally very useful for us. Signature & Name:
