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Case Study: Mas - Airasia Merger: Mohamad Zahirin Bin Yaacob - 62387115019 Corporate Finance Pbp60273
Case Study: Mas - Airasia Merger: Mohamad Zahirin Bin Yaacob - 62387115019 Corporate Finance Pbp60273
Case Study: Mas - Airasia Merger: Mohamad Zahirin Bin Yaacob - 62387115019 Corporate Finance Pbp60273
1.
activities with its strategic choice of in pursuit of differentiation and low cost.
differentiation or low cost.
The blue ocean strategy for both airlines would be table as following:
N
o
1
MAS
AIRASIA
Promoting Enrich FFP, including building Targeted non customer who never travel or
alliance with other airlines as partners.
Downsizing
business
capacity,
In 2002, Air Asia turning a profit and swiftly opening multiple new routes whilst
undercutting Malaysia Airline and demolishing its monopoly. Air Asia pursue the value
innovation model to establish its low cost airline, which allowed it to reconstruct market
boundaries, reach beyond existing demand and render the bloody red oceans of industry
competition irrelevant. They established a compelling service offering that created a leap
in value in passenger and company value by breaking the value/low cost trade off and
pursuing value innovation.
There are 4 major elements in their strategic move:
2.
Eliminate
Raise
the plane
Seating class booking system
Reduce
Create
lounge
Inflight attendance service
Seat quality
2010
15,62
1
2011
16,29
0
2012
17,65
2
2013
18,37
1
2014
18,71
2
2011
PV
RM 15,621,000
FV
RM 18,712,000
4 years
I (growth)
4.617%
2012
2013
2014
The growth of AXIATA GROUP BERHAD is 4.617% through year of 2010 till 2014
3.
Which strategy? growth or value? It is likely to have higher return potential over the long term?
The battle between growth and value investing has been going on for years, with each side
offering statistics to support its arguments. Value investors argue that a short-term focus can
often push stock prices to low levels, which, in turn, can create great buying opportunities for
value investors.
Growth Stock VS Value Stock
Growth Stock
Value Stock
A growth stock is a share in a A value stock is a stock that tends to trade at a
company
whose
earnings
rate
relative
to
the
earnings
in
capital
projects
Bumi Armada Berhad is an oilfield services company which provides marine
transportation, engineering and maintenance services to the offshore oil and gas industry. It is
based in Kuala Lumpur, Malaysia, and has operations in Southeast Asia, South Asia, Central
Africa, South America, Australia and the Caspian Sea region. It is the world's fifth largest
floating production storage and offloading (FPSO) provider with six vessels. The company was
founded in 1995 and it part of Ananda Krishnan's Usaha Tegas group. It shares are listed on the
Main Market of Bursa Malaysia Securities Berhad and traded as MYX: 5210.
Bumi Armada Berhad is categorized as a VALUE STOCK because its price earning ratio is
low as per calculation below;
Price Earning Ratio (P/E)
0.20 / 3.6
0.056
0.056 / 17.88 =
0.0031
Bumi Armada Berhad price to earning growth is 0.0031 which is less than 1 indicates that
it is undervalued. Bumi Armada also pay dividend. A growth stock does not pay dividend. The
ROE of Bumi Armada berhad for three (3) financial years shows that it is less than 15%. To be
classified as a growth stock, Bumi Armada Berhad stock must have 15% on their ROE or higher.
The ROE for Bumi Armada Shows that it is getting lower started 2012 to 2014. The current
assets is at twice current liabilities. Bumi Armada Annual Report 2014 shows that total current
asset is at RM 5,300,157,000 while the total liabilities is at RM 2,326,510,000 which indicate
that the current assets is more than current liabilitie.
Therefore, Bumi Armada is categorized as Value Stock.