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Breadtalk Evaluation

 Breadtalk Analysis Essay

Executive Synopsis

This reviews aims to establish the current problems that BreadTalk Group Limited is facing and just how the issues will have an impact on their earnings and share valuations. In our report, a computation of DuPont ROE Analysis among BreadTalk, Meals Junction and Auric Pacific was evaluated and it had been noticed that BreadTalk's ROE is predominantly greater than Food Junction and Auric Pacific through the years of our outlook from FY2012 to FY2015. Based on the calculations, many assumptions and limitations in BreadTalk's innate value of share cost were analysed and consequently predicted with four models. These types of models are Dividend Valuation Model, Free of charge Cash Flow to Equity Model, Price/Earnings Rate Model plus the Price/Book Worth Model. Through the use of the stated models, we will perform an specific analysis and evaluate on the results acquired to provide an assessment with the company's current position plus the future prospective customers.

Contents

Executive Summary1

1 ) Introduction to BreadTalk4

1 . 1Overview4

1 . 2Company Structure4

2 . Economic Environment6

2 . 1Overview6

2 . 2Macroeconomic6

I. Item Price6

2. Gross Household Product (GDP)7

III. Inflation8

IV. Client Price Index (CPI)9

V. Interest Rates10

3. Industry Analysis11

a few. 1Overview11

three or more. 2Market Segmentation11

3. 3SWOT Analysis12

I actually. Strength12

II. Weakness13

III. Opportunities13

IV. Threats14

four. Financial Analysis15

4. 1Recent Financial Performance15

I. Diluted Earnings every Share (EPS)15

II. Payouts per Share16

III. Payout Ration16

4. 2DuPont Analysis17

I. Come back of Value (ROE) Analysis17

II. Earnings Margin Analysis19

III. Total Assets Turnover19

IV. Monetary Leverage20

4. 3Required Level of Return21

I. Beta (ОІ)21

II. Risk Free Rate24

III. Market Risk Premium24

IV. Capital Asset Costs Model (CAPM)25

4. 4Growth Rate25

a few. Valuation Analysis27

5. 1Dividend Discount Model (DDM)27

My spouse and i. Dividend Forecast28

II. Innate Share Price28

III. Analysis of DDM29

IV. Tenderness Analysis29

a few. 2Free Cash Flow to Value Model (FCFE)30

I. FCFE Model31

2. FCFE Version Evaluation31

III. Sensitivity Analysis32

5. 3Price-Earnings Ratio32

I actually. Price-Earnings Ratio Model32

2. Price-Earnings Ratio Model Evaluation33

III. Awareness Analysis34

your five. 4Price/Book Benefit Ratio34

I actually. P/BV Ratio Comparison34

II. Evaluation of P/BV Model36

III. Tenderness Analysis36

six. Conclusion37

7. Reference List38

8. Appendix42

1 . Summary of BreadTalk

2 . 1 Guide

Established in July 2000, BreadTalk began as a bakery outlet by Bugis Verse. Due to raising popularity of goods, BreadTalk widened their functions to five other stores and made programs for franchising operations just before being openly listed in the year 2003. With their exclusive brands being BreadTalk, Bread toasted Box, Foodstuff Republic, RamenPlay and The Topping Room along with franchises from USA's Carl's Jr and Taiwan's Michelin Star person Din Tai Fung. Having such praise bakery, cafe and foodstuff court, BreadTalk Group Limited became a prominent food and drinks (F& B) brand. Consequently, the Group/BreadTalk grew into a vast network of more than 15 countries, including Mainland China, Singapore, Indonesia and Hong Kong. An operation on this scale can be sustained by simply 6000 global employees handling over five-hundred outlets (BreadTalk 2012b). 2 . 2 Business Structure

The BreadTalk Group board of directors contains 5 crucial individuals who are furnished with rich experience from various expertise including research and development, purchase, strategic planning and supervision (BreadTalk 2012a). The in depth structure combined with the management survey can be found in (BreadTalk 2011). The directors managing the functions of BreadTalk consist of:

Katherine Lee Lih Leng| Mouthpiece Chairman that is responsible for the Group's research and development,...

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