Team Medallion, Capitalizer'21 , 2nd Round

1. Team Medallion

2. Hargreeves Industries Ltd.

3. Overview of Hargreeves Industries Ltd.
Initiated Project Umbrella in
2011 as a Mass Vaccination
Project
Produces Vaccine for
Perseus X and Creates a
Mass Vaccination Center
Worldwide Demand of
Vaccine Provides the Scope
of Expansion to Foreign
Countries

4. Risks of Project Umbrella
Technical Risks
Unsystematic:
• Loss of technological edge
• Inconsistent quality and
risks of product safety
• Infrastructural
inefficiencies
Operational Risks Financial Risks
Systematic:
• Changes in government
and environment policies
Unsystematic:
• Property damage or theft
• Licensing and regulatory
issues
• Bottlenecks in supply chain
Systematic:
• Changes in interest &
exchange rate
Unsystematic:
• Lack of funding
• Loss of market share
• Intellectual property and
liability risks

5. Risks of Project Umbrella
Very Low Low Moderate High Very High
Very Low
Inconsistent quality
and product safety
Lack of funding,
Changes in
government policies
Low
Property damage or
theft
Infrastructural
inefficiencies
Licensing and
regulatory issues
Loss of technological
edge
Moderate Loss of market share,
Bottlenecks in supply
chain
Intellectual property &
liability risks
High
Very High
Impact
Probability

6. Insurance Policies
Vaccine related liabilities and
damage to rented space
General Liabilities
Insurance
Serious injury or death of a
worker at workplace or due to
work reasons
Accidental Death &
Dismemberment
Insurance
Lawsuits and allegations from
competitors, customers and
other stakeholders
Directors & Officers
Insurance
Liability Insurance
Machinery, buildings and
inventory against hazards such
as fire, earthquake etc.
Property Insurance
Patents, copyrights &
trademarks of vaccines
Intellectual Property
Insurance
Theft from warehouses and
factories
Crime Insurance
Asset Protection Insurance

7. Risk Mitigation Strategies
Operational Risks
Technical Risks
Financial Risks
• Integrated global Demand Signal Repository (DRS)
functions with FMCG supply chain
• Increasing number of suppliers
• Government partnerships and contracts to gain
regulatory approvals
• Coordinated training efforts and continuous lab tests
• Choosing production and distribution partners with
developed infrastructure
• Investing in R&D
• Increasing third-party vaccine production in the event
of non-availability of funding
• Increasing efficiency and reducing operating
expenses
• Insurances and R&D investments

8. Risk Mitigation Strategies: KPIs
• Continuous supplier risk
assessment
• Safety stock monitoring
• Number of economies
managing multi-sites in a
single license
Operational KPIs
• Service desk client
satisfaction
• Vaccine adoption status
and compliance
• Scheduled lab test success
rates
Technical KPIs
• Profit measures
• Market Share
• Capital Market Ratios
• Cash Flow Measures
• Liquidity Ratios
Financial KPIs

9. Hyde Industries Ltd.

10. Overview of Hydes Industries Ltd.
Bangladesh Based Syringe
Manufacturing Company
Developed new Hyde Spikes
Syringe
Successful to Administer
the most viscous serum
Only Syringe in the Market
for Perseus X
Targets to Overhaul the
Global Syringe Industry

11. Market Size
24 billion USD
20.8 billion USD
3.9 billion USD
Total Addressable Market (TAM)
• Population of Tropical Countries
• Total Demand of Injections Globally*
Serviceable Addressable Market (SAM)
• 70% of Population of Tropical Countries
(amount required to immunize the population)
• 95% of Total Demand of Injections Globally*
(sum % intramuscular and subcutaneous)
Serviceable Obtainable Market (SOM)
• 68.6% Market of the New Vaccine
(being the market leader and only supplier for
1.5 years)**
• 1% of SAM (considering the established market
players and with reference to Xerex)***
* Source: World Health Organization (WHO)
** The market leader of the syringe industry, BD, holds 37.2% of the market share. It is assumed that Hydes will capture 37.2% of the market share in the third year, and the average, being 68.6% in the second year.
*** The company, Xerex, originated in 2019 has introduced disruptive technologies in the syringe sector and only captured less than 1% of the market. The target market size is thus, set at 1% initially.

12. Competition
No competition on the
vaccination of the new variant
of Perseus X,
but competition exists on
syringes of lower viscosities
Introduction of competition
(companies spending highly
on R&D) in the Hyde Spikes
Syringe category*
With entry to newer lines, local
and global Syringe producers
across all product
categories**
Year 0 Year 2 Onwards
* In the medical equipment industry, competitive edge usually lasts between 1-2 years due to the lack of patent protection in a lot of countries, and high R&D expenditures by Big Pharma companies.
** Local syringe producers include JMI, Opsonil, Skylab, and Acmelab. Global syringe producers include BD, Cardinal, Novo Nordisk, etc.

13. Porter’s Five Forces
Very High
High
Moderate
Low
Very Low
Threat of
Substitutes
Threat of
New Entrants
Bargaining Power
of Suppliers
Bargaining Power
of Buyers
Competitive
Rivalry
Without Any Competitive Product
Very High
High
Moderate
Low
Very Low
Threat of
Substitutes
Threat of
New Entrants
Bargaining Power
of Suppliers
Bargaining Power
of Buyers
Competitive
Rivalry
With the Introduction of
Competitive Products

14. Marketing Implications
Highly Competitive
Industry
High Adaptability to
Change and
Technology
Supply Chain is the
Key
Market Growth Rate of
8%, but will adjust with
Perseus X

15. Alternatives
Competitive Pricing &
Larger Market Share
• Larger Market Share
• Lower Profitability
• Shorter Length of Market
Control
• Lower Flexibility
Complete Control over
Manufacturing & Distribution
• Greater Flexibility
• No Additional Dosts
• Legal and Compliance
Issues
• Limited Expansion
Opportunity
Partnerships &
Value Based Pricing
• Faster Scope of Expansion
• Disruption of Value Chain
• Lesser Legal & Compliance
Issues
• Additional Costs

16. Business Strategy of Hyde Industries Ltd.
Partnerships
• Disruptive Supply Chain
• Lesser Regulatory and
Compliance Hassle
• Last Mile Delivery
Competitive Edge Fast Growth
• High Investment on R&D
• Value Based Pricing Model
• Cutting-Edge Value Chain
• Focus on Emerging
Regions
• Low Fixed Costs
• Expansion of Capacity

17. Pricing Strategy
Manufacturing Cost* USD .841
Set Price Point USD 1.5
Mark Up 78.32%
Average Market Price for Syringe** USD 1
Price Compared to Average Market
Price
1.5x
*Team Medallion Analysis
**Due to lack of consistent data, USD 1 is assumed to be the standard syringe price across all variations
• Capitalize the competitive advantage*
• Skim maximum profit at the beginning
to finance fast growth
• Considering the contract
manufacturing incentives, marketing
and R&D expenses
• Retaining consumer confidence in the
long run
• In line with industry practices**
*Competitive advantage in the industry lasts from 1-2 years
**GE & Intuitive used similar price setting strategies for new products (Cohen & Neubert, 2017)
Value Based Pricing Strategy

18. Partnerships: Supply Chain
Regional Production Hubs
Hyde Industries
Distribution Partners

19. Fast Growth
Year 1 Year 2 Year 4 Year 8 Year 12
Syringe for Variant of Perseus X
Entrance into viscous biologics
market of emerging nations
Entrance into viscous biologics
market of developed nations
Entrance into intravenous market
Maturity stage, capacity
expansion and efficiency increase
-
5.00
10.00
15.00
20.00
25.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Market Growth Target
Total Syringe Vaccine Market Share

20. The ONE Marketing Strategy
Target – Converse – Convert
Key focus areas include lead generation, relationship
development, and B2B & B2G contracts
Target
• Identify efficient
distribution channels
• Evaluate geographically
and profitable markets
• Target medical
conferences to establish
contact
Converse
• Generate leads
• Communicate mutually
beneficial terms for B2B
and B2G
• Active participation in
vaccination advocacy
Convert
• Establish long term
vaccination partnerships
with governments and
international agencies
• Sustain long term
relationships

21. Comparable Companies
• Market leaders in different regions of
the world
• Recently expanded their production
capacity*
• Similar revenue structure and quantity
of revenue**
• Significant global footprint with
contract manufacturing plants
*B Braun, BD, and Baxter recently invested 1 bil , 1.2 bil, and 50 mil USD respectively
**BD and Terumo’s revenue in 2020 from the syringe sector was 3.5 and 3.6 bil respectively
• Nipro focuses on emerging markets*
• Strategic focus on new product
development, expansion capacity and
sales networks**
*B Braun, BD, and Baxter recently invested 1 bil , 1.2 bil, and 50 mil USD respectively
**Nipro Annual Report, 2020

22. Cost of Capital
Capital Structure
Weightage of Equity 75%
Weightage of Debt 25%
Debt-to-Equity of Hyde 0.33
Cost of Debt
Interest Rate* 6.00%
Tax Rate** 35%
Cost of Debt 3.90%
Cost of Equity
Unlevered Beta of the Industry* 2.50
Levered Beta for Hyde 3.06
Risk Free Rate**** 4.61%
Implied Equity Risk Premium*** 3.84%
Cost of Equity 16.34%
Weighted Average Cost of Capital
WACC 13.23%
* Source: Bangladesh Bank
** Source: Government of Bangladesh
*** Source: World Bank
**** Source: Moody’s & New York University
• High requirement of investment
• Higher weight of debt will
require huge collateral and
result in unsustainable financial
risk
• Equity of 75% will ensure
flexibility
• 25% of the required investment
will be spent on land

23. Key Assumptions
• Production Structure, Operating cost
and working capital are in line with the
comparable companies
• The lifetime of all depreciable assets are
10 years
• All costs and price points are adjusted
with inflation and growth rates
• R&D Expenses will be high to retain the
competitive edge
• Working Capital will be financed by debt
Days Sales Outstanding 60
Days Sales Inventory 60
Days Payable Outstanding 60
Own Manufacturing 30%
Contract Manufacturing 70%
Operating Expenses 25%
R&D Expenses 5%
Depreciation Expenses 10%

24. Cashflow Forecasting
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Net Profit after Tax 64,077,178 95,396,834 108,467,193 202,293,143 215,098,556 218,649,853 209,545,104 317,409,427
NCFOPA (119,057,588) 41,173,100 114,661,495 229,890,532 424,957,719 595,584,246 773,139,336 978,490,784
Net Cash Flow 1,942,412 14,372,319 16,627,117 129,945,255 319,317,914 483,680,462 654,345,173 635,999,727
Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Profit after Tax 337,518,441 344,414,239 315,115,349 402,849,980 411,154,984 421,885,706 407,817,337 414,778,136
NCFOPA 1,067,683,122 1,344,805,296 1,634,317,979 1,209,663,576 1,115,262,388 1,264,976,337 1,713,753,677 2,120,972,029
Net Cash Flow 928,803,506 1,191,543,737 695,723,475 524,185,100 703,224,995 1,130,952,723 1,566,327,702 1,958,803,456

25. Cashflow Forecasting
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Net Profit after Tax 64,077,178 95,396,834 108,467,193 202,293,143 215,098,556 218,649,853 209,545,104 317,409,427
NCFOPA (119,057,588) 41,173,100 114,661,495 229,890,532 424,957,719 595,584,246 773,139,336 978,490,784
Net Cash Flow 1,942,412 14,372,319 16,627,117 129,945,255 319,317,914 483,680,462 654,345,173 635,999,727
Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Profit after Tax 337,518,441 344,414,239 315,115,349 402,849,980 411,154,984 421,885,706 407,817,337 414,778,136
NCFOPA 1,067,683,122 1,344,805,2961,634,317,979 1,209,663,5761,115,262,388 1,264,976,3371,713,753,677 2,120,972,029
Net Cash Flow 928,803,506 1,191,543,737 695,723,475 524,185,100 703,224,995 1,130,952,723 1,566,327,702 1,958,803,456

26. Cashflow Forecasting
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8
Net Profit after Tax 64,077,178 95,396,834 108,467,193 202,293,143 215,098,556 218,649,853 209,545,104 317,409,427
NCFOPA (119,057,588) 41,173,100 114,661,495 229,890,532 424,957,719 595,584,246 773,139,336 978,490,784
Net Cash Flow 1,942,412 14,372,319 16,627,117 129,945,255 319,317,914 483,680,462 654,345,173 635,999,727
Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Year 16
Net Profit after Tax 337,518,441 344,414,239 315,115,349 402,849,980 411,154,984 421,885,706 407,817,337 414,778,136
NCFOPA 1,067,683,122 1,344,805,296 1,634,317,979 1,209,663,576 1,115,262,388 1,264,976,337 1,713,753,677 2,120,972,029
Net Cash Flow 928,803,506 1,191,543,737 695,723,475 524,185,100 703,224,995 1,130,952,723 1,566,327,702 1,958,803,456

27. Capital Budgeting Measures
6.30
Pay Back Period
4,445,761,625
NPV
34.82%
IRR

28. Opportunity Cost
Complete Control over
Manufacturing & Distribution
• Different Target Market – High Growth
Emerging Economies
• Competitive Pricing Strategy – USD 1.3
• Higher Market Share (by 5%)
• Highly Competitive Segment
NPV: 2,604,295,202
Competitive Pricing &
Larger Market Share
• Sole Manufacturing and distribution
• Complete control over the supply chain
• High requirement of fixed cost and
investment
NPV: 1,219,263,101

29. Sensitivity Analysis
Parameter Mean Range
Raw Materials Cost Per Unit 0.75 0.50-1
Labor Cost Per Unit 0.09 0.06-0.12
Manufacturing Overhead 1,320,000 900,000-1,700,000
Operating Expense 25% 18%-32%
Contract Manufacturing Cost 3% 2%-4%
Contract Manufacturing Revenue 70% 50%-90%
Changes in Raw Material Costs,
Certainty of a Positive NPV = 91.6%

30. Sensitivity Analysis
Changes in Working Capital,
Certainty of a Positive NPV = 81.0%
Parameter Likely Lower- Higher
Days Sales Outstanding 60 40-140
Days Sales Inventory 60 55-120
Days Sales Payable 60 10-90

31. Sensitivity Analysis
Changes in Price & Capacity,
Certainty of a Positive NPV = 91.6%
Parameter Mean Range
Capacity 1.5 Billion Units 800 million-2.2 billion
Price 1.50 per unit 1.10-1.90

32. Sensitivity Analysis
Changes in Rates,
Mean EV = 7.2 billion USD
Parameter Mean Range
Discount Rate 13.23% 9%-17%
Constant Growth 1% 0.5%-4%

33. Risks & Mitigation
Risks Mitigation
Loss of sales due to loss of competitive advantage
• Continuous R&D and technological innovation
• Insuring intellectual property
• Strengthening partnerships with clients
Supply chain bottlenecks hampering distribution from
regional hubs to markets
• Diversifying manufacturers and suppliers across
regions
• Insuring property against adversities
Technical failure of product and health safety concerns
• Benchmarking and continuous lab testing
• General liabilities insurance of the syringe
Regulatory and compliance complications
• Long-term partnerships and contracts with
governments and health organizations

34. Valuation
Comparable Companies
Weightage EV/EBITDA
BD 20.00% 16.36
Baxter 20.00% 15.94
Nipro 50.00% 9.52
Terumo 10.00% 23.06
Hyde Industries Ltd.
EBITDA of Hyde 559,573,827
Weighted EV/EBITDA 13.53
Implied Value 7,568,795,589
Discounted Cash Flow
Discount Rate 13.23%
Constant Growth Rate 1.00%
Investment 854,003,906
Terminal Value 2,716,484,605
Enterprise Value 6,984,313,251
Method Discounted Cash Flow Comparable
Weightage 80% 20%
Enterprise Value 6,984,313,251 7,568,795,589
Company Value 7,101,209,719

35. Valuation
*Team Medallion Analysis
Total Required Assets*
Header Amount
Land 185,546,875.00
Machineries 604,329,427.08
Building 47,200,521
Vehicle 16,927,083
Total 854,003,906
Capital Structure
Equity
642,402,344
75%
Debt
211,601,563
25%

36. Valuation
642,402,343
Required Investment
7,101,209,718
Company Value
9.05%
Offered Equity

37. Conclusion - Business Model Canvas
Key Partners
• Regional Production
Partners
• Local Distribution
Partners
• Governments
• Raw Material
Suppliers
Key Activities
• Sales Generation
• Demand Creation
• Capacity Expansion
• Research &
Development
• Maintenance
Value Propositions
Low Cost and Effective Self-
Administrable Solution to Inject
High Viscous and Biologic
Vaccines
Customer
Relationships
• Multi-year or Project
Based Contracts
• Contract
Manufacturing
• Operating Leases
Customer Segments
• B2B
• B2G
• International
Agencies
Key Resources
• Intellectual Property
• Patent
• Manufacture Plants
Channels
• Regional Hubs
• Government
• International Agencies
Cost Structure
• Plant Establishment Costs
• Contract Manufacturing Costs
• Raw Material Procurement Costs
• Operational Costs & Interest Costs
• R&D Costs
Revenue Streams
• Sales of Perseus Vaccination Syringes
• Sales of Viscous Biologics Syringes
• Sales of Intravenous Syringes

38. Thank You