SCHOOL OF ARCITECTURE, BUILDING AND DESIGN

BACHELOR OF QUANTITY SURVEYING (HONOURS)

FINANCIAL MANAGEMENT (QSB 3414)

GROUP WRITTEN ASSIGNMENT

Group Members:
Danielle Yoong Li Ping

0317206

Ng Wei Lin

0316302

Chung Hui Ping

0310592

Tan Jing Yi

0317479

Ian See Tze Onn

0311883

Chan Eu Weng

0311736

FINANCIAL ANALYSIS HYB

HUA YANG BERHAD

Version 2016

2016, Huayang

Table of Contents
1.

Background of the Company.......................................................................................................... 8

1.1 Management Directory ................................................................................................................ 8
1.2 Company Overview ...................................................................................................................... 8
1.3 Company News ............................................................................................................................. 8
1.2 Background and Development .................................................................................................... 9
1.3 Financial Performance ................................................................................................................. 9

2. The principle activities of the company .......................................................................................... 10

2.1 Subsidiaries Company ................................................................................................................ 10
3. Current State of the Property Market ............................................................................................. 11
3.1 Selected Factors ......................................................................................................................... 11
3.1.1 Current Size of the Property Market .................................................................................. 11
3.1.2 Prospect for Future Growth in Property Sector ................................................................. 13
3.1.3 Challenges Faced in Property Sector .................................................................................. 13
4. Strategic Plans .................................................................................................................................. 15
4.1 Affordability ............................................................................................................................... 15
4.2 Strategic Lands for Development .............................................................................................. 15
4.3 Dividends to Shareholders ......................................................................................................... 15
5. Net Changes of Cash Flow ................................................................................................................ 16
5.1 Major Cash Flow ......................................................................................................................... 16
6. Major Capital Investment ................................................................................................................ 17
6.1 Breakdown of Cost for Major Capital Investment .................................................................... 17
6.2 Major Source of Funding ............................................................................................................ 18
7. Free Cash Flow.................................................................................................................................. 19
7.1 Analysis ....................................................................................................................................... 19
8. Ratio Analysis Industry Comparison ............................................................................................. 20
8.1 Current Ratio .............................................................................................................................. 20
8.2 Quick Ratio ................................................................................................................................. 21
8.3 Debt to equity ratio .................................................................................................................... 22
8.4 Debt to assets ratio .................................................................................................................... 23
8.5 Interest coverage ratio ............................................................................................................... 24
8.6 Degree of Financial Leverage ..................................................................................................... 25
8.7 Operating Cash Cycle.................................................................................................................. 26
9. Projected Revenue ........................................................................................................................... 27

9.1 Projected New Sales ................................................................................................................... 27

9.2 External Variables ...................................................................................................................... 28
9.2.1 Rate of Inflation................................................................................................................... 28
9.3 Projected Cost of Sales ............................................................................................................... 29
9.4 Projected Gross Profit ................................................................................................................ 30
9.5 Projected Profit before Tax ........................................................................................................ 30
9.6 Overall Trend Analysis ............................................................................................................... 31
9.6.1 Analysis ................................................................................................................................ 33
10. Conclusion ...................................................................................................................................... 34
11. Reference........................................................................................................................................ 35
12. Appendix ........................................................................................................................................ 39
12.1 Free Cash Flow.......................................................................................................................... 39
12.2 Ratio.......................................................................................................................................... 41
12.2.1 Financial Data .................................................................................................................... 41
12.2.2 Liquidity Ratio ................................................................................................................... 42
12.2.3 Solvency Ratio ................................................................................................................... 43
12.2.4 Investment Ratio ............................................................................................................... 44
12.2.5 Profitability Ratio .............................................................................................................. 45
12.3 Forecasting ............................................................................................................................... 46
12.3.1 Revenue ............................................................................................................................. 46
12.3.2 Inflation Rate Table ........................................................................................................... 50
12.3.3 Percentage of sales method ............................................................................................. 51
12.4 Turnitin Results ........................................................................................................................ 53

List of Tables
1.1 Background of Hua Yang Berhad
1.2 Management Directory of Hua Yang Berhad
1.3 Background of the development of Hua Yang
2.1 List of subsidiaries from Hua Yang Group
3.1 Population by 5-year Age Group in the year 2015
3.2. The list of Hua Yangs competitors
5.1. The major cash flow from operating, investing and financing activities.
8.1 The total days of cash cycle for HYB and TILB
9.1 The breakdown of the new launches worth RM 721 million
9.2 The forecasted revenue from different organizations
9.3 The percentage of cost of sales based on revenue
9.4 The projected gross profit for FY17 based on the previous computed data
9.5 The projected Profit before Tax computed using the percent sales method.
9.6 The overall trend percentage with base year of 2011.

List of Graphs
3.1 The forecasted increment of the new supply of houses
8.1 Trend for 5 years of current ratio in Hua Yang and Tambun Indah Land
8.2 Trend for 5 years of quick ratio in Hua Yang and Tambun Indah Land
8.3 Trend for 5 years of debt to equity ratio in Hua Yang and Tambun Indah Land
8.4 Trend for 5 years of debt to asset ratio in Hua Yang and Tambun Indah Land
8.5 Trend for 5 years of interest coverage ratio in Hua Yang and Tambun Indah Land
8.6 Trend for 5 years of degree of financial leverage ratio in Hua Yang and Tambun Indah Land
8.7 Trend for 5 years of operation cash cycle in Hua Yang and Tambun Indah Land
9.1 The fluctuation of the annual average inflation rate in Malaysia from 2006 to 2017f
9.2 The percentage of cost of sales using the percentage of sales method
9.3 The overall trend analysis for Hua Yang Berhad

Abbreviation
HYB

Hua Yang Berhad

TILB

Tambun Indah Land Berhad

GDV

Gross Development Value

GST

Goods and Services Tax

FY

Financial Year

CY

Calendar Year

PBT

Profit Before Tax

1. Background of the Company

1.1 Management Directory

1.2 Company Overview

The prime vision of Hua Yang Berhad is to make dreams of affordable home ownership a reality.
After 37 years of establishment, the company has built more than 15,000 properties worth RM 2.6
billion in Kuala Lumpur, Selangor, Johor, Perak and Negeri Sembilan. Hua Yang Berhad is considered
as Malaysias leading property developer in building affordable housing. With the new cycle of
property market, the company expected a better future. They are planning in venture into Penangs
property market to realize more dreams (Hua Yang Berhad, 2015).
1.3 Company News
According to The Star Online, Hua Yang Berhad is planned to develop 6 parcel of freehold land in
Penang. The land is used to build mixed development with Gross Development Value (GDV) of RM 311
million. The project will comprise of service apartment, condominiums and to storey of shop lots. Hua
Yang Berhad, Chief Executive Office, Ho Wen Yan has announced that they are confident to obtain
leverage in developing affordable homes on the strategically located land bank. The project land is
situated strategically in accessing North South Expressway as well as surrounded by amenities such as
shopping malls, banks, schools, and food and beverage outlet (The Star Online, 2015).

1.2 Background and Development

1.3 Financial Performance

In ended of 31 March 2015, Hua Yang has achieved remarkable growth of 14.5% in year 2015. The
group revenue improved from RM509.9 million in 2014 to RM583.6 million in year 2015. Hua Yang
Berhad has successfully reached RM100 million of net profit and aimed to steer higher revenue in
ongoing projects. In financial year 2015, Klang Valley development contributed 40% of total revenue
to the Group with integrated development of residential development in Sentrio Suites in Kuala
Lumpur and Metia Residence in Shah Alam. Moreover, development in Johor is nearly 30% of total
Group revenue in township development of Taman Pulai Indah and Taman Pulai Hijauan. And, Perak
development is about 20% to the revenue with continued development of Bandar Universiti Seri
Iskandar Township (Hua Yang Berhad, 2015).

2. The principle activities of the company

Hua Yang is an Investment Holding Company. The main business functions concentrate in the business
of property development and the provision of management services. The business segments are
categorized into the property development and the rental from concession assets segment. They
develop residential and commercial properties, invest in property operating segment. For rental from
concession assets segment, the business collects the rental from the assets. The assets are monitored
under build, operate and transfer agreements (investor.com, 2016).
2.1 Subsidiaries Company

3. Current State of the Property Market

HYB mainly does property development which are residential and commercial properties.
3.1 Selected Factors
There are a few factors or criteria that will reflect the current state of the property development
industry in Malaysia. The selected factors are the current size of the property market, the prospect for
the future growth in the property sector, and the challenges faced by the property industry.
3.1.1 Current Size of the Property Market
3.1.1.1 Introduction
Investor Words (2016) mentioned that a market must be of a relevant size for a company to gain profit.
3.1.1.2 Market Potential
The total size of the market to cater a certain product at a known timeframe is defined as market
potential.
3.1.1.2.1 Potential Customer Base

The potential buyers will be from age group of 25 years old and above which will equal to 17,273,000
of the total population. There are three categories of potential buyers i.e. owner-occupiers, investors
and speculators. Owner occupiers takes up the largest portion for the potential buyers as a home is
one of the basic necessities.
3.1.1.2.2 Competitors
People tend to misunderstand that a higher stock price will indicate that that company is larger. This
is a common misconception as it may wrongly represent a companys true worth. Hence, market
capital will be used to compare HYB with its competitors (Investopedia, 2016). The competitors chosen
are based on Hua Yangs market capital which is RM 469.92 mil to determine the other property
development companies within a suitable range for its market capital.

3.1.1.2.3 Economic Environment

One of the major changes in 2016 will be the difficulty to secure a mortgage from financial institutions.
The reason behind this difficulty is because at the moment financial institutions are experiencing
troubles with the high asset-to-deposit ratio and in addition with the weakening strength of the Ringgit
and the expensive cost of banking. Thus, bank will be reluctant to lend money to the people to ensure
that the money they lent to the investors or public will bring the safest and highest return on
investments (iProperty, 2016).

3.1.2 Prospect for Future Growth in Property Sector

Bank Negara Malaysia (2015) reported that the supply of affordable housing must be increased. It is
estimated that approximately 202,571 new units will be needed each year from 2016 till 2020 to
match the forecasted increase in number of household.

In Budget 2016, RM 1.6 billion has been set aside to build 175,000 units affordable homes under the
PRIMA programmes. This is a step to solve the housing crisis that is currently faced by the Malaysians.
Other than that, a total of RM200 million has been set for the First House Deposit Financing Scheme
(iProperty, 2016). This will boost the property sector to build more residential properties at an
affordable price to meet the demand. HYB has since embarked on their Brand Development
Programme to aim to be the preferred partner for people whom are looking to purchase their first
house (Hua Yang, 2015).
3.1.3 Challenges Faced in Property Sector
The triple blow in the year 2015 hit many consumers in Malaysia. The triple blow is defined as a
downfall of the national economy, introduction of the GST and a weakening currency. In return, this
triple blow has caused an increased in inflation (Euromonitor International, 2016a). The property
sector is highly dependent on the demand from the buyers. In an event where the inflations increases
but wages maintain, people will tend to demand on lower price product, in this case affordable homes.

As land price goes up, it will be more costly to build affordable houses for the community. Developers
may face difficulty in receiving their return in investment due to low profit margins (Saieed, 2016).

4. Strategic Plans
4.1 Affordability
As a listed company, HYB has many strategic plans for seizing opportunities and facing challenges in
its industry. One of which is the method of strategic planning of market segmentation that the
company carries out. Most of the housing development projects done by HYB are catered for the first
time young adult buyers and the newly-married couples with young children. Besides that, HYB also
tries to accommodate to a reasonable purchasing price of nothing above RM500 per sq ft which has
been sustaining the developing business for 35 years (Tan, 2013). This shows that the company
strategize in a niche market of affordable home segments.
4.2 Strategic Lands for Development
Investing in a land to develop is also an important strategy that HYB undertakes. In developing a
residential area, location is a very important factor to consider. HYB is always looking for more
strategic land to develop. According to Ho Wen Yan, the chief executive of HYB, they have been
focusing on procuring good land and they venture to area that has demand but no developers are
supplying (Tan, 2013). With that, HYB is able to sell its development fast and earn revenue.
4.3 Dividends to Shareholders
Another strategy is that HYB plans to maintain the dividend given to the shareholders and
stakeholders. Although the economy is unstable, the development still stands firm on its performance
in 2016 that most of the proposed development are going according to plan. According to Chief
Executive officer Ho Wen Yan, Demand is expected to outstrip supply and our proven competencies
in this segment will enable the group to create a sustainable value for both shareholders and
stakeholders at large (Puspadevi, 2016). In this sense, HYB is confident that they would still generate
profit enough to yield dividend for the stockholders which ensures the companys market value is
stable. With a stable market value people would continue investing stock under HYB which increases
the equity for the company to further invest.

5. Net Changes of Cash Flow

There is a net increase of RM 3,223,525 of cash and cash equivalents during HYBs latest financial year
of 2015. HYB had a total cash and cash equivalents of RM 30,212,539 at the beginning of the year as
at 1 April 2014 where the total ending cash and cash equivalents as at 31 March 2015 is of RM
33,436.064. This means that HYB has an extra of RM 3,223,525 cash on hand at March ended 2015
than the previous financing year.
5.1 Major Cash Flow

6. Major Capital Investment

6.1 Breakdown of Cost for Major Capital Investment

6.2 Major Source of Funding

7. Free Cash Flow

7.1 Analysis
During FY15, the cash outflow for the investing activities is quite high. Mainly due to the purchase of land held for property development, plant and equipment
and investment in properties. The negative free cash flow is not necessary a bad indication for the company. The company may invest in all these activities
to generate profit in the future. This means that the company is growing or expanding their fixed assets (long term assets) in the current stage. Thus, HYB is
a good company as it foresees the future opportunity in property development (Investopedia, 2016a).
In FY15, HYB has purchased lands that has area as large as 22.52 acres across Penang and Perak and carries a GDV worth RM 423 million. During a 5 year
duration, HYB has a total of 492 acres, of approximately RM 3.3 billion GDV and will be able to maintain their principal activities for another six to eight years
(Hua Yang Berhad, 2016).

8. Ratio Analysis Industry Comparison

8.1 Current Ratio

A healthy and acceptable current ratio ranges from 1:1 to 3:1. Both companies are staying in the
liquidity range. Hua Yang Berhad (HYB) has a lower liquidity compared to Tambun Indah Land Berhad
(TILB). The lowest current ratio of HYB is in year 2013 is because they incurred a large portion for other
payables which have to settle within 2 months. While in year 2015, both company retained their
liquidity level at nearly 2:1. The government has taken initiative to develop the infrastructure and
implement new affordable houses scheme in the 11th Malaysia Plan. With a steady liquidity,
companies will have easier access in getting approval of loans from the bank to tender of these
government projects.

8.2 Quick Ratio

From the graph above, TILB has a better management towards the liquidity of quick ratio compared
to HYB. HYB quick ratio has a consistent growth from year 2013 to 2015. This is because of the increase
of accrued billing in respect of property development costs. In year 2012, HYB is more liquid than TILB.
High revenue is generated in year 2011 by selling off 1,631 units in Johor, Perak, Seremban and Klang
Valley. Thus the company has retained more than 4 times of cash and bank balance compared to year
2011. The liquidity of the company dropped from 2.1:1 to 1.0:1 in year 2013 is because the company
has three times more current trade payable compared to year 2012.

8.3 Debt to equity ratio

The debt to equity ratio of HYB in year 2011 to 2012 is much lower compared to TILB. As the result,
the company has lower interest expenses and operated in lower risk. According to the graph, it
showed that HYB changed their capital structure from refraining to use shareholder equity to fund
their assets in financial year 2014 and 2015. This is because they think that the company can generate
more earning to pay the great amount of interest expense. In addition, a high interest rate can reduce
the tax payable to the government. In year 2015, both companies have a high debt to equity ratio to
raise capital. The high profit generated from the financing through investment activities can maximize
the shareholders wealth.

8.4 Debt to assets ratio

According to Chairman of HYB, the company recorded 62% of revenue compared to the previous year.
The impressive revenue made has caused the company has a higher debt to assets ratio compared to
the benchmark in the industry, TILB in year 2013. HYB finances a total of 29% of its assets by liabilities
and another 71% by equity while TILB finances 24% of its assets by liabilities which is lower than HYB.
Thus TILB will have less debt or liabilities to pay each month.

8.5 Interest coverage ratio

From the data above, HYB managed the interest coverage ratio very well compared to TILB. The
company has more than enough profit to pay the interest expenses. This high interest coverage ratio
is because 71% of Hua Yangs assets is funded by equity while only 29% is funded by liabilities. A good
financial record is more easily in applying finance through external sources. Construction Company is
a high risk company. It is good for HYB to maintain the higher interest cover ratio with lower level of
financial risk to cope with the uncertainty happened in the industry.

8.6 Degree of Financial Leverage

In these 5 financial years, both companies have a consistent of nearly 1 of degree of financial leverage.
This is to conserve the earning per share of their company. Both companies are able to conserve the
level of earning per share from the operating profit generated through the 5 consecutive financial
years.

8.7 Operating Cash Cycle

Operating cash cycle of both companies resulted to be a negative value which means that the
company controls their cash cycle well. The company is able to collect payments from customers much
faster compared than paying to its suppliers. From the graph above, HYB did better in year 2011, 2013
and 2014 than TILB. On average, account payable payments of HYB is not as good as TILB, as it takes
a longer time to pay its suppliers.

9. Projected Revenue
9.1 Projected New Sales
HYB remains the targeted sales for FY17 to be RM 500 million. The reason behind this target is because
the management plans to launch new project of a GDV worth RM 721 million and projects that are
yet to be sold worth RM370.7 million. However, Kenanga Research (2016) stated that the FY17
targeted sales is slightly too high due to the expected weak sales, stringent loan requirements from
Bank Negara Malaysia and higher rate of rejection from bank for loans and hence propose the
forecasted sales to be RM 409.5 million. This estimated sales is supported by TA Securities (2016)
which reported that albeit HYB has set eyes to launch 48% of new projects, however due to weak
market conditions, they will set their estimates approximately 2% to 7% below their target sales which
is approximately RM 404 million to RM 471 million.

Varies organization produced their projected revenue to HYBs FY17 and the data is as follow:-

Based on conservatism principal, the forecasted revenue conducted by Kenanga Research and BIMB
Securities is exceptionally high compared to the other three (Accounting tools, 2016). Hence, revenue
forecasted by RHB is chosen.
9.2 External Variables
9.2.1 Rate of Inflation

The annual average inflation rate for the year 2016 is forecasted to be 3.13%. An increment in the
interest rate would cause an increase in cost of materials, labours and etc. which would eventually

affect the property development cost for the company. This cost is recorded under the cost of sales
in the income statement.
9.3 Projected Cost of Sales

Using the percent-sales method, the cost of goods is expected to increase by an additional 1.34%.
Thus the cost of sales for FY17 will be 67.55% of the revenue.
9.4 Projected Gross Profit

9.5 Projected Profit before Tax

.-----

9.6 Overall Trend Analysis

9.6.1 Analysis
The above graph shows that the revenue for FY17 will further decrease to 294% of the base year 2011.
The percentage cost of sales out of the revenue is projected to increase from the financial year 2016
to financial year 2017. The cost of sales increases even though FY17 revenue is projected to decrease
as construction of ongoing projects will still be on the run thus cost of labours, plants and machineries
and cost of materials is still incurred.
Due to the projected increase in the percentage of cost of sales and the drop in revenue, thus the
gross profit is anticipated to fall by 26% in FY17; at a higher rate compared to the fall in gross profit in
FY16. This is because the percentage of decrease for the revenue from FY15 to FY16 is 4% while from
FY16 to FY17 is 11%.
As the gross profit in FY17 is expected to fall, thus the PBT is expected to drop as well by 91%. The rate
of decrease for FY17 PBT is faster as compared to FY16 PBT due to a higher rate of decreased in the
gross profit in FY17.

10. Conclusion

In a nut shell, HYB will still sustain even though with the current market condition in Malaysia, as HYB
strategy is to provide affordable houses to solve the current housing crisis. Government is providing
incentives to urge private developers to enter the affordable market. HYB has been investing in
landbanking and has a total of RM 3.3 billion worth to sustain them for another 6 to 8 years. With a
current ratio of 2.0, HYB still remains as a liquid company despite investing a lot in long-term assets
(lands, plants and equipment) albeit being slightly below its competitor. HYB mainly funds it assets by
71% of equity and 29% of liability which indicates that it has a low leverage.

Due to the high amount of investing activities for purchasing lands and the high amount of dividend
paid, HYB will have a negative free cash flow, which indicates that HYB may not be able to further
invest to enhance the shareholders value. HYB also manages its cash cycle well by collecting faster
from customers and delaying its payment to suppliers. According to analysist, the forecasted revenue
for FY17 is expected to drop and thus reducing its gross profit and PBT due to soft market sediment,
stringent loans and GST.

11. Reference
Accounting for Management.org, 2015. Return on Shareholder's Investment. [Online]
Available at: http://www.accountingformanagement.org/return-on-shareholders-investmentnetworth/ [Accessed 16 June 2016].
AccountingTools, 2016. What is the prudence concept in accounting? [Online]
Available at: http://www.accountingtools.com/questions-and-answers/what-is-the-prudenceconcept-in-accounting.html [Accessed: 14 June 2015[.
Bank Negara Malaysia, 2015. Annual Report 2015. Kuala Lumpur. Bank Negara Malaysia
Euromonitor International, 2016a. Malaysia Country Profile. [Online]
Available at: http://www.portal.euromonitor.com.ezproxy.taylors.edu.my/portal/analysis/tab
[Accessed 18 June 2016]
Euromonitor International, 2016b. Consumer Lifestyle in Malaysia. [Online]
Available at: http://www.portal.euromonitor.com.ezproxy.taylors.edu.my/portal/analysis/related
[Accessed 16 June 2016]
GDP inflation, 2016. GDP inflation | economic indicators of countries: inflation rate, GDP,
unemployment rate, population. [Online] Available at:
http://www.gdpinflation.com/2013/08/inflation-rate-in-malaysia-from-1995-to.html [Accessed: 10
June 2015].
Finance Train, 2016. Degree of Financial Leverage. [Online]
Available at: http://financetrain.com/degree-financial-leverage/
[Accessed 18 June 2016].
Global Property Guide, 2016. Malaysias property market slowing sharply. [Online]
Available at: http://www.globalpropertyguide.com/Asia/Malaysia/Price-History (Accessed: 12 June
2015).
Hua Yang Berhad, 2011. Annual Report, Kuala Lumpur: Hua Yang Berhad.
Hua Yang Berhad, 2012. Annual Report, Kuala Lumpur: Hua Yang Berhad.
Hua Yang Berhad, 2013. Annual Report, Kuala Lumpur: Hua YAng Berhad.
Hua Yang Berhad, 2014. Annual Report, Kuala Lumpur: Hua Yang Berhad.
Hua Yang Berhad, 2015. Annual Report, Kuala Lumpur: Hua Yang Berhad.
Hua Yang Berhad, 2015. Milestones. [Online]
Available at: http://huayang.com.my/about-us/corporate-overview/milestones/
[Accessed 16 June 2016].

Investopedia, 2015a. Debt Ratio. [Online]

Available at: http://www.investopedia.com/terms/d/debtratio.asp
[Accessed 16 June 2016].
Investopedia, 2015b. Market capitalization defined. [Online]
Available at: http://www.investopedia.com/articles/basics/03/031703.asp (Accessed: 13 June 2015).
InvestorWords, 2016. Market size. [Online]
Available at: http://www.investorwords.com/6576/market_size.html (Accessed: 15 June 2015).
Investopedia, 2016a. How should I evaluate a company with negative cash flow investing activities?
[Online] Available at: http://www.investopedia.com/ask/answers/050415/how-should-i-evaluatecompany-negative-cash-flow-investing-activities.asp [Accessed 22 June 2016].
Investopedia, 2016b. Liquidity Ratio. [Online]
Available at: http://www.investopedia.com/terms/l/liquidityratios.asp
[Accessed 16 June 2016].
Investopedia, 2016c. Profitability Ratio. [Online]
Available at: http://www.investopedia.com/terms/p/profitabilityratios.asp
[Accessed 16 June 2016].
investor.com, 2016d. Business Background. [Online]
Available at: http://klse.i3investor.com/servlets/stk/bizbg/5062.jsp
[Accessed 16 June 2016].
Investopedia, 2016e. Efficiency Ratio. [Online]
Available at:
http://www.investopedia.com/terms/e/efficiencyratio.asp?layout=infini&v=5E&orig=1&adtest=5E
[Accessed 16 June 2016].
iPropertyFocus, 2016. Malaysias property market in 2016: what to expect & predictions. [Online]
Available at: http://focus.iproperty.com.my/buying/566/malaysia%E2%80%99s-property-market-in2016-what-to-expect--predictions#ZeHtbM7YVkwYDcR4.97 (Accessed 16 June 2015).
Puspadevi, S. (2016). Hua Yang plans to maintain dividend - Business News | The Star Online. [Online]
Thestar.com.my. Available at: http://www.thestar.com.my/business/businessnews/2016/02/13/hua-yang-plans-to-maintain-dividend/ [Accessed 20 Jun. 2016].
Research, K. (2016). Hua Yang planning to launch up to RM721 worth of projects moving into FY17.The
Edge Markets. [Online]
Available at: http://huayang.listedcompany.com/newsroom/The_Edge_-_20_May_2016.pdf
[Accessed 20 Jun. 2016].

RHB, 2015. Looking beyond FY16. [Online]

Available at: http://huayang.listedcompany.com/newsroom/Oct-23-2015-RHB.PDF [Accessed: 11
June 2015]
Saieed, Z, 2016. PR1MA sets realistic targets. [Online]
Available at: http://www.thestar.com.my/business/business-news/2016/01/30/pr1ma-sets-realistictargets/ (Accessed: 16 June 2016)
Statista, 2016. Malaysia: inflation rate from 2010 to 2020 (compared to the previous year). [Online]
Available at: http://www.statista.com/statistics/319033/inflation-rate-in-malaysia/ (Accessed: 10
June 2015).
Study, 2016. Market potential of a product: definition & analysis example. [Online]
Available at: http://study.com/academy/lesson/market-potential-of-a-product-definition-analysisexample-quiz.html (Accessed: 11 June 2015).
Tan, Y. (2013). Hua Yang eyes RM800mil sales by 2018 - Business News | The Star Online. [Online]
Thestar.com.my. Available at: http://www.thestar.com.my/business/businessnews/2013/06/01/hua-yang-out-to-achieve-milestones-affordable-property-developer-eyesrm800mil-sales-by-2018/ [Accessed 20 Jun. 2016].
TA Securities, 2016a. Hua Yang Berhad lowest annual sales in 5 years. [Online]
Available at: http://huayang.listedcompany.com/newsroom/May-19-2016_TA.PDF
[Accessed: 11 June 2015]
TA Securities, 2016b. Hua Yang Berhad challenging time ahead. [Online]
Available at: http://huayang.listedcompany.com/newsroom/May-20-2016_TA.PDF
[Accessed: 11 June 2015]
Tambun Indah Land Berhad, 2011. Annual Report, Kuala Lumpur: Tambun Indah Land Berhad.
Tambun Indah Land Berhad, 2012. Annual Report, Kuala Lumpur: Tambun Indah Land Berhad.
Tambun Indah Land Berhad, 2013. Annual Report, Kuala Lumpur: Tambun Indah Land Berhad.
Tambun Indah Land Berhad, 2014. Annual Report, Kuala Lumpur: Tambun Indah Land Berhad.
Tambun Indah Land Berhad, 2015. Annual Rreport, Kuala Lumpur: Tambun Indah Land Berhad.
The Edge Property, 2016. Hua Yang targeting RM500m sales for FY17. [Online]
Available at: http://www.theedgeproperty.com.my/content/hua-yang-targeting-rm500m-sales-fy17
(Accessed: 10 June 2015).
The Star Online, 2015. Hus Yang Plans RM31 million Mixed Development in Penang. [Online]
Available at: http://www.thestar.com.my/business/business-news/2015/12/04/hua-yang-plansrm311mil-mixed-development-in-penang/
[Accessed 16 June 2016].

Thomson Reuter, 2016. Trusted financial content for superior decision making. [Online]
Available at: https://www.thomsonone.com/DirectoryServices/2006-0401/Web.Public/Login.aspx?brandname=www.thomsonone.com&version=3.7.9.18833&protocol=0
[Accessed 22 June 2016]

12. Appendix
12.1 Free Cash Flow

Formula used to calculate Free Cash Flow

12.2 Ratio
12.2.1 Financial Data
Financial Data

2015, RM

2014, RM

2013, RM

2012, RM

2011, RM

Closing Inventory
Account Receivable
Cash
Current Assets
Property Development Cost
Total Assets

9,959,290
89,071,952
40,797,775
499,011,769
169,569,513
928,388,476

6,481,657
82,644,145
35,129,960
428,871,703
141,890,990
832,765,461

6,528,877
38,166,678
29,544,897
222,693,746
41,385,114
633,898,340

4,944,598
57,470,676
25,161,722
203,655,324
50,192,169
447,123,762

4,183,986
27,114,941
6,258,628
168,752,185
60,676,320
357,028,563

Current Liabilities
Account Payable
Total Liabilities

251,262,869
146,630,265
462,517,655

243,707,616
174,485,092
445,782,982

173,968,058
156,527,240
299,421,343

69,918,017
56,495,172
178,866,526

73,917,743
47,889,253
136,051,861

Shareholder Equity
Short Term Debt
Long Term Debt
Revenue
Interest Expenses
Cost of Goods Sold

465,870,821
78,591,751
192,080,904
583,576,377
1,491,738
382,632,201

386,982,479
60,671,089
188,608,761
509,892,614
1,106,636
343,008,649

334,476,997
6,686,038
108,467,021
408,670,468
503,235
257,440,985

268,257,236
6,439,390
90,840,212
306,412,023
762,082
198,517,578

220,976,702
19,528,848
53,514,655
188,865,151
1,062,727
133,178,100

Gross Profit
Other Income
(-) Administrative expenses
(-) Selling expenses

200,944,176
5,980,722
34,409,552
17,571,663

166,883,965
22,959,144
33,005,710

151,229,483
7,032,338
18,707,622
43,744,897

107,894,445
2,483,225
16,871,199
19,604,798

55,687,051
1,270,228
11,872,722
9,764,383

EBIT

154,943,683

113,468,477

95,809,302

73,901,673

35,320,174

2,549,366

Source: (Hua Yang Berhad, 2015) (Hua Yang Berhad, 2014) (Hua Yang Berhad, 2013) (Hua Yang Berhad, 2012) (Hua Yang Berhad, 2011)

12.2.2 Liquidity Ratio

Liquidity ratio is the ability to meet its short term financial obligation (Investopedia, 2016).

Current Ratio

Quick Ratio

Current Asset
Current Liabilites
Current Asset - Inventories - Property Development Cost
Current Liabilities

Financial Ratio

2015

Ratio

2014

Ratio

2013

Ratio

2012

Ratio

2011

Ratio

Current ratio

499,011,769
251,262,869

2.0

428,871,703
243,707,616

1.8

222,693,746
173,968,058

1.3

203,655,324
69,918,017

2.9

168,752,185
73,917,743

2.3

Quick ratio

319,482,966
251,262,869

1.3

280,499,056
243,707,616

1.2

174,779,755
173,968,058

1.0

148,518,557
69,918,017

2.1

103,891,879
73,917,743

1.4

12.2.3 Solvency Ratio

Debt ratio is the ability of the company to meet long term obligation (Investopedia, 2015).

Debt to equity ratio

Financial Ratio

2015

192,080,904
Debt to equity ratio
465,870,821

Long term debt

Shareholder's Equity

Ratio

2014

0.41

188,608,761
386,982,479

Ratio

2013

0.49

108,467,021
334,476,997

Ratio

2012

0.32

90,840,212
268,257,236

Ratio

2011

Ratio

0.34

53,514,655
220,976,702

0.24

12.2.4 Efficiency Ratio

Efficiency ratio is the ratio that usually applied to the effectiveness of the company in using its assets and liability internally (Investopedia, 2016).

Debt to assets ratio

Operating cash cycle

Financial Ratio

2015

Debt to assets ratio

270,672,655
928,388,476

Short term debt + Long Term Debt

Total Assets
Inventory
x 365 days
Cost of good sold

Ratio

2014

0.29

249,279,850
832,765,461

Account receivable
x 365 days
Sales

Ratio

2013

0.30

115,153,059
633,898,340

Trade payable
x 365 days
Cost of good sold

Ratio

2012

0.18

97,279,602
447,123,762

Ratio

2011

Ratio

0.22

73,043,503
357,028,563

0.20

Operating Cash Cycle

2015

Days of Inventory
Holding Period

9,959,290
382,632,201

Days of Account
Receivable Collection
Period

89,071,952

Days of Account
Payable Payment
Period

583,576,377

Days

2014

10

6,481,657
343,008,649

Total Days of Cash Cycle

2013

6,528,877
257,440,985

82,644,145
56

509,892,614

146,630,265
382,632,201

Days

343,008,649

-75

2012

4,944,598
198,517,578

38,166,678
59

174,485,092
-140

Days

408,670,468

257,440,985

-120

2011

Days

4,183,986
133,178,100

11

57,470,676
34

156,527,240
-186

Days

306,412,023

27,114,941
68

56,495,172
-222

198,517,578

-179

188,865,151

52

47,889,253
-104

133,178,100

-26

-131
-67

12.2.4 Investment Ratio

Investment ratio concerned the return to the shareholder holders (Accounting for Management.org, 2015).

Degree of financial leverage

Earning before Interest and Taxation

EBIT - Interest

Financial Ratio

2015

Degree of
Financial Leverage

154,943,683
153,451,945

Ratio

2014

1.0

113,468,477
112,361,841

Ratio

2013

1.0

95,809,302
95,306,067

Ratio

2012

1.0

73,901,673
73,139,591

Ratio

2011

Ratio

1.0

35,320,174
34,257,447

1.0

12.2.5 Profitability Ratio

Profitability ratio is a financial tool that used to assess a businesss ability in generating earning as compared to its expenses and relevant
incurred cost during a specific period of time (Investopedia, 2016).

Interest coverage ratio

Financial Ratio

2015

Interest Coverage Ratio

154,943,683
1,491,738

Profit before Interest and Taxation

Interest Payable

Ratio

2014

103.9

113,468,477
1,106,636

Ratio

2013

102.5

95,809,302
503,235

Ratio

2012

190.4

73,901,673
762,082

Ratio

2011

Ratio

97.0

35,320,174
1,062,727

33.2

12.3 Forecasting
12.3.1 Revenue
12.3.1.1 TA Securities

12.3.1.2 Kenanga Research

12.3.1.3 RHB

12.3.1.4 BIMB Research

12.3.1.5 Thomson Reuters

12.3.2 Inflation Rate Table

12.3.3 Percentage of sales method

12.3.3.1 Cost of Sales

Thus for Cost of sales in FY17:

12.3.3.2 Profit before Tax

Thus for profit before tax in FY17:

12.4 Turnitin Results