Ioi Corporation

IOI Corporation Case Study 1. IOI strong growth was achieved through a. Good plantation management practice * Continues improvements on yields carrying into action * Maximize output from plantation and factories and minimize input to achieve a low-cost supply chain b. Diversified business base in bay wreath oil industry, from downstream sector to upstream sector 2. IOI opportunities and threats c. Opportunity * Continues growth on palm oil in edible oils & fats market globally * append in non-food industry demand, like biofuel.Now, market is focus on renewable energy. Palm oil has been identified as one of the efficient and clean biofuel * everlasting(a) palm oil price getting higher and stable family-on-year. * Sales of properties at prime area especially in Singapore have been further * Expansion in Indonesia with recent planting permit approval to the groups directly owned plantations d. Threat * Major revenue is come from trade markets to Europe and US. Weak economic situa tion affect the demand on palm oil. With limited land bank in Malaysia * Unfavorable weather civilize * Shortage of estate workers * Fierce competition from Sime Darby and Indonesia and upcoming markets like Africa and Brazil are catching up 3. Internal organization capabilities and it weakness. e. Top 3 administrator directors are family members. Decisions making are among family members, higher chances in power abusing and lack of transparency f. Has operations in many countries, expose to foreign exchange danger 4. Change and unchanged g. Change Family based share holders lack of transparency. Need to maintain good relationship with stakeholders to increase the efficiency of the group h. Unchanged * weave culture research, leading to cultivation of clonal palms with superior traits * Continuous improvement in productivity and efficiency of its operations * Sustainable environmental friendly practices IOI monetary Analysis FY2012 1. Current liquidity ratio = Current asset / C urrent liability 2012 (RM000) 2011 (RM000) 9,185,620 / 2,202,499= 4. 7 7,703,105 / 2,288,028= 3. 36 The group ratio increased in year 2012 2. Total debt to total asset = (short term debt + long term debt) / total asset 2012 (RM000) 2011 (RM000) 10,148,965 / 23,064,868= 0. 44 7,393,721 / 19,655,119= 0. 37 Total funds that areprovided by creditors is change magnitude in year2012 3. Total asset turnover = Sales / total asset 2012 (RM000) 2011 (RM000) 15,640,272 / 23,064,868= 0. 67 16,154,251 / 19,655,119= 0. 82 4. Profitability = net income / sales 2012 (RM000) 2011 (RM000) ,828,529 / 15,640,272= 0. 11 2,290,513 / 16,154,251= 0. 14 After tax profits decreased per ringgit of sales 5. Market grade * EPS = 0. 2785 * P/E = 18. 2047 * Price per share = 5. 07 * (Current assets current liabilities) / ordinary shares = (9,185,620 2,202,499) / 6,419,174 = 1. 08 * Fair value = (5. 07 / 2) + (1. 08 / 2) = 2. 535 + 0. 54 = 3. 075 IOI groups profit is decreased on year 2012. The market fair val ue is much lower than the actual price per share. The pickaxe is to sell the share instead of buying it.