Hyflux and Artivision Analysis
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Executive Summary
In this report, a business analysis and valuation exercise was conducted on the firms in our Hyp$100,000 investment portfolio to evaluate their strategies and historical performance, as well as to determine the intrinsic value of their shares.
To reduce risks through portfolio diversification, two firms from unrelated industries were selected. Hyflux was chosen as the SGX Mainboard Company due to the huge earnings potential from its operations in China and the Middle East and North Africa (MENA) region. For the Catalist company, Artivision was selected because of its growing potential and promising technology in video management solutions.
Overall, our group adopted a risk adverse approach for our initial portfolio and invested 40% in Hyflux, 20% in Artivision and 40% in the money market fund.
Using Porter’s Five Forces, business strategy analysis was conducted to examine the industries in which the firms operated. For the analysis of the firms, SWOT model, competitive and corporate strategies were used. Next, accounting analysis was carried out to evaluate the firm’s key accounting policies and quality of disclosure. Potential red flags were then identified, and adjustments were made such that the financial statements better reflect the firms’ underlying business reality. With these adjusted financial statements, financial analysis was then performed. Time-series and cross-sectional analyses were conducted on the firms’ key financial ratios to assess their operating, investment and financial management. Finally, using the ratios calculated, analysts’ reports and other firm specific news as the basis for our forecasts of the firms’ growth, profitability and risks, prospective analysis was performed using the eVal software.
By comparing the intrinsic values obtained through our fundamental analysis with the actual market share prices, our initial portfolio was revised. The final portfolio consists of 60% of funds invested in Hyflux
Executive Summary
In this report, a business analysis and valuation exercise was conducted on the firms in our Hyp$100,000 investment portfolio to evaluate their strategies and historical performance, as well as to determine the intrinsic value of their shares.
To reduce risks through portfolio diversification, two firms from unrelated industries were selected. Hyflux was chosen as the SGX Mainboard Company due to the huge earnings potential from its operations in China and the Middle East and North Africa (MENA) region. For the Catalist company, Artivision was selected because of its growing potential and promising technology in video management solutions.
Overall, our group adopted a risk adverse approach for our initial portfolio and invested 40% in Hyflux, 20% in Artivision and 40% in the money market fund.
Using Porter’s Five Forces, business strategy analysis was conducted to examine the industries in which the firms operated. For the analysis of the firms, SWOT model, competitive and corporate strategies were used. Next, accounting analysis was carried out to evaluate the firm’s key accounting policies and quality of disclosure. Potential red flags were then identified, and adjustments were made such that the financial statements better reflect the firms’ underlying business reality. With these adjusted financial statements, financial analysis was then performed. Time-series and cross-sectional analyses were conducted on the firms’ key financial ratios to assess their operating, investment and financial management. Finally, using the ratios calculated, analysts’ reports and other firm specific news as the basis for our forecasts of the firms’ growth, profitability and risks, prospective analysis was performed using the eVal software.
By comparing the intrinsic values obtained through our fundamental analysis with the actual market share prices, our initial portfolio was revised. The final portfolio consists of 60% of funds invested in Hyflux