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Gamuda Gamuda Presentation Transcript

  • Construction Sector• Construction is a process that consists of the building or assembling of infrastructure• In Malaysia, construction industry is generally separated into two areas – General construction – Special trade works
  • Construction Sector• Construction industry makes up an important part of the Malaysian economy due to the amount of industry linked to it such as those for basic metal products and electrical machinery• Hence, the construction industry could be described as a substantial economic driver for Malaysia
  • BACKGROUND OF THE COMPANY• The company was incorporated on October 6, 1976• Gamuda was listed on the main board of the Kuala Lumpur Stock Exchange on 10 August 1992
  • OVERVIEW OF THE COMPANY• Gamuda Berhad is a Malaysia-based investment holding company engaged in civil engineering construction• operates in three business segments: engineering and construction, property development and club operations, and water and expressway concessions• Its subsidiaries include Gamuda Construction Sdn. Bhd. and Gamuda Engineering Sdn. Bhd• The Company operates in Malaysia, Taiwan, Republic of China, Mauritius, Qatar, Bahrain and Vietnam.
  • Competitor• YTL Corporation – Core business activities are : • Utilities • High Speed Rail • Operation and Maintenance (O&M) • Cement Manufacturing • Construction Manufacturing • Property Development & Hotels • Technology Incubation • Carbon Consulting
  • Competitor• In Malaysia, YTL Corporation is the leader in construction sector• However, it is not a serious threat for Gamuda Berhad
  • VISION STATEMENT• We deliver innovative world-class infrastructure and homes for our customers through our core businesses in infrastructure development and construction, operation and maintenance of public infrastructure concessions, and large-scale urban township development. (Comment: Good statement)
  • MISSION STATEMENTS• To provide viable solutions for our clients and customers• To ensure responsible conduct towards all our stakeholders, including our customers, employees, shareholders and the community and environment in which we operate.• To improve our efficiency and relevance amidst the changing needs of our customers and markets• To ensure that we have a sustainable future
  • NINE ESSENTIAL COMPONENTS OF A MISSION STATEMENT• Gamuda Berhad mission is to place an innovation in our concepts, services, product and delivery system (4) to provide viable solution for our clients and customers (1). We will be responsible to conduct towards all our stakeholders, including our customers, employees, (9) shareholders and the community and environment in which we operate (8). We will constantly improve our efficiency and relevance amidst the changing needs of our customers and markets (7). We take the long view in our business policies and actions (6) to ensure that we have a sustainable future (5). (Comment: Statement lacks of two components: Products or Services and Markets)
  • THE NINE COMPONENTS1. Customers2. Products or Services3. Markets4. Technology5. Concern for Survival, growth, and profitability6. Philosophy7. Self-concept8. Concern for public image9. Concern for employees
  • THE EXTERNAL ASSESSMENTOPPORTUNITY• Expected housing boom by 15% in 2011• Strategic alliance with government in public sector project such as SMART and MRT• Land and housing in 500 radius around the MRT station will increase 10% to 30% in its value.• RM9 billion Pahang Selangor water transfer project in bidding process
  • THE EXTERNAL ASSESSMENTThreat• YTL is the leader in the industry by manufacturing their own raw materials.• Penang state government order to stop double railways project due to flood.• Gamuda expose to foreign exchange risk due to their project in overseas.• MRT project cost expect to increase from RM35 billion to RM50 billion because of the global crisis.
  • External Factor Evaluation (EFE) Matrix for Gamuda BhdKey External Factors Weight Rating Weighted Score __________________Opportunities ______1. Expectec housing boom by 15% in 2011 0.16 4 0.642. Strategic alliance with government in public Sector project such as SMART and MRT 0.17 4 0.683. Land and housing in 500 metre radius around the MRT will increase 10% to 30% in its value 0.14 3 0.424. RM9 billion Pahang Selangor water transfer project in bidding process 0.12 2 0.24Threats1. YTL is the leader in the industry by manufacturing their own raw materials 0.12 3 0.362. Penang state government order to stop double railways project due to flood 0.10 2 0.203. Gamuda expose to foreign exchange risk due to their project in overseas 0.12 4 0.484. MRT project cost expect to increase from RM35 billion to RM50 billion 0.07 1 0.07 Total 1.00 3.09
  • COMPETITIVE PROFILE MATRIX (CPM) Gamuda Bhd YTL Corp. Bhd_____________________________________________________________________________________Critical Success Weighted WeightedFactors Weight Rating Score Rating ScoreMarket share 0.20 2 0.40 3 0.60Financial position 0.15 3 0.45 2 0.30Product Quality 0.10 4 0.40 4 0.40Global expansion 0.20 4 0.80 2 0.40Organization structure 0.05 2 0.10 3 0.15Price competitiveness 0.18 3 0.54 2 0.36Management experience 0.12 4 0.48 3 0.36Total 1.00 3.17 2.57
  • THE INTERNAL ASSESSMENTSTRENGTH• Establish construction company in construction sector since 1976.• Company finance it assets more on equity financing rather than debt financing.(debt to equity ratio 0.32 times)• Increase in dividend by 50% from 8 sen to 12 sen in 2010.• Gamuda’s profit in 2010 rose to 20% .• High quality product produce such as SMART and MRT.
  • THE INTERNAL ASSESSMENTWEAKNESSES• Not enough expertise in manufacturing raw material compared to competitor in term of cement manufacture.• Revenue decrease by 9.98 % from 2009 to 2010.
  • Internal Factor Evaluation (IFE) Matrix for Gamuda BhdKey Internal Factors Weight Rating Weighted Score __________________Strength ______1. Established construction company in construction sector since 1976 0.20 4 0.802. Company finance it assets more on equity financing rather than debt financing.(debt to equity ratio 0.32 times) 0.14 4 0.563. Increase in dividend by 50% from 8 sen to 12 sen in 2010 0.12 3 0.364. Gamuda’s profit in 2010 rose to 20% 0.10 2 0.205. High quality product produce such as SMART and MRT 0.18 4 0.72Weaknesses1. Not enough expertise in manufacturing raw material compared to competitor in term of cement manufacturing. 0.16 3 0.482. Revenue decrease by 9.98 % from 2009 to 2010 0.10 2 0.20 Total 1.00 3.32
  • A SWOT Matrix for GAMUDA BERHAD Strength Weaknesses 1. Establish construction 1. Not enough expertise in company in construction manufacturing raw material sector since 1976 compared to competitor in 2. Company finance it term of cement manufacture. assets more on equity 2. Revenue decrease by 9.98 GAMUDA BERHAD financing rather than % from 2009 to 2010 SWOT Matrix debt financing.(debt to equity ratio 0.32 times) 3. Increase in dividend by 50% from 8 sen to 12 sen in 2010 4. Gamuda’s profit in 2010 rose to 20% 5. High quality product produce such as SMART and MRT Opportunities SO Strategies WO Strategies1. Expected housing boom by 15% in 1. Develop more housing 1. Try to get more project from 2011 properties by 3% inside and outside the2. Strategic alliance with government (S1,O1) country 2% (W2,O2) in public sector project such as 2. Establish rapport with 2. Develop more properties and SMART and MRT government to get more commercial project within the3. Land and housing in 500 radius project such as RM 3 radius of the MRT station by around the MRT station will billion second Penang 2%. (W2,O3) increase 10% to 30% in its value. bridge and etc. by 2%.4. RM9 billion Pahang Selangor (S5,O4) water transfer project in bidding process Threats ST Strategies WT Strategies1. YTL is the leader in the industry by 1. Involve in manufacturing 1. Withdrew overseas projects manufacturing their own raw sector to compete with that give too low profit and materials competitors by 10% in shows a downtrend in their2. Penang state government order to cement. (S1,T1) currencies (W2, T3) stop double railways project due to 2. Issue more share to flood fund the cost increase in3. Gamuda expose to foreign MRT project (S2,T4) exchange risk due to their project in overseas4. MRT project cost expect to increase from RM35 billion to RM50 billion because of global economic crisis.
  • A SPACE Matrix for GAMUDA BERHADFinancial Position RatingGamuda Bhd return on investment increase by 0.95 percent to 4.42 percent 3.0Gamuda Bhd net income was 97.5 million, increase 3.5 percent from a previous year 3.0The company paid out dividend payment to its shareholder increase from 8 sen to 12 sen 4.0Gamuda Bhd assets are finance more through equities which is 65% 2.0 12.0Industry PositionConstruction industry in Malaysia has potential growth by 3.5 percent this year 4.0Expected housing boom by 15 percent in 2011 5.0Financial position of Gamuda is stable due to increase in dividend payment by 50%,EPS by 44% and net profit by 3.5%. 4.0 13.0Stability PositionGamuda berhad exposed to foreign exchange risk due to operates in oversea -4.0The inflation rate in Malaysia was last reported at 2.9 percent in February of 2011 -3.0Gamuda has to compete with other construction companies such as IJM, UEM, and YTLin order to get project -6.0 -13.0Competitive PositionHigh quality product produces such as SMART and MRT -1.0Most of the Gamuda’s project offered by government -3.0Advance in construction technology in term of tunneling expertise -2.0 -6.0ConclusionSP Average is -4.3CP Average is -2.0IP Average is +4.3FP Average is +3.0X axis = -2.0 + 4.3 = 2.3Y axis = -4.3 + 3.0 = -1.3
  • GAMUDA BERHAD Space Matrix
  • THE STRATEGIC POSITION AND ACTION EVALUATION (SPACE)MATRIX• Product Development- Gamuda Berhad can apply their product development strategy such as in cement manufacturing in order to compete with YTL which is the leader in construction industry. Furthermore, with the retained earning almost RM 140 million, we believe that Gamuda able to involve in cement manufacturing.• Market Penetration- Gamuda Berhad already penetrated in overseas such as in South East Asia country (Thailand and Vietnam) and Middle East ( Qatar and Bahrain). Now, Gamuda Berhad has an opportunities to expand their business in other Asia country such as India, Korea, Hong Kong and etc.
  • GAMUDA BHD Balance Scorecards Strategic Objectives Measure Target Primary Priorities ResponsibilityFinancial 1. Increase in 1. ROA 1. Increase from 1. Finance1. Financially Return on Investment 4.42% to 5% Manager strong 2. Increase in net income 2. EAT 2. Increase from 3.5% to 4.5% 3. Increase in profit 3. NPM 3. Increase from margin 11.79% to 13%Customer 1. Complete the 1.Market 1. Increase from 1. Marketing1. Government project within the share 49.3% to 52% Manager and Public sector time allocated growthInternal 1. Innovative product 1. Project 1. Increase by 3% 1. R&D Manager1. Operational and services gained in develop new 2. Sales and Excellence project Department2. Increase 2. Low cost at high 2.Customer Manager customer value quality project and acquisition services