3. Sycal Ventures Bhd. Company Analysis 3
- founded in 1980 and it was formally known as Cygal Berhad.
- An investment holding company which mainly focuses in building
construction and civil engineering works in Malaysia and Hong Kong.
- 2 segments as its subsidiaries: property development & (12
indirect subsidiaries) manufacturing and trading.
- Chairman of the company: Dato’ Sri Haji Abd Rahim Bin Haji Abdul
(66 years old)
5. Sycal Ventures Bhd. Company Analysis 5
Contractor for building
& Civil engineering
works
Property Development
Manufacturing:-
• Building Materials
• Aircraft parts &
equipment
11. Malaysia GDP (obtained from http://www.tradingeconomics.com/malaysia/gdp-from-construction )
• 12,558 MYR million GDP is the highest since 2010.
• GDP averaging at 9,439 MYR million from 2010 to 2016.
• Construction industry is on the rise.
Sycal Ventures Bhd. Company Analysis 11
12. Sycal Ventures Bhd. Company Analysis 12
Future growth
- Construction industry remain healthy.
- New plan for KL in the next 5 years.
- CAGR increase by 16% for the 11th Malaysia Plan.
- Positive expectations about future job supply have been supporting
current stock prices.
Challenges
- Increased in oil price.
- Imposed of GST.
- Depreciation of RM.
14. Strength
- Operates through 3 sectors which is construction, property development
and manufacturing and trading
- RM181.67m revenue with 169 numbers of employees
- Strong liquidity of the company
Sycal Ventures Bhd. Company Analysis 14
2015 2014 2013 2012 2011 Average
Current Ratio
(times)
1.92 1.98 1.55 1.46 1.67 1.72
Quick Ratio
(times)
1.8 1.84 1.51 1.37 1.57 1.62
15. Weaknesses
- Drop in net cash flow by 5.66M between years 2014 and 2015
- Used more cash to support its operation
- Producing a cash flow loss of RM426k
- Inventory turnover could ascertain
- Long time to pay accounts payable
Sycal Ventures Bhd. Company Analysis 15
-5000
0
5000
10000
2011 2012 2013 2014 2015
Cash Flow (RM'000)
17. Sycal Ventures Bhd. Company Analysis 17
Seizing Opportunities
• Repayment of RM 69m from 2014 to 2016
• Cygal Development Sdn Bhd had a 12 year contract with
Pullman Hotel until 2022
• Will look to see it’s property development activities to snap
up profit in the next 5-10 years
• Potential RM1.2 billion GDV in future township
development with PKNP
18. Facing Challenges
• Sycal had broken away from the down trend chart recently after a
strong rebound on the floor price
Sycal Ventures Bhd. Company Analysis 18
• The major challenge is that they should maintain flow of strong
volume in trend chart
19. Facing Challenges
• Going through the current local currency with the effect of GST and
strict lending policies
Sycal Ventures Bhd. Company Analysis 19
21. Sycal Ventures Bhd. Company Analysis 21
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
Property, Plant &
equipment
16,882 15,371 7,245
Difference with
base year (2013)
9,637
(+1,511)
8,126 0
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
Freehold office lots
and buildings
- - -
Plant and machinery 582 7,784 1,900
Motor vehicles 3,895 1,923 1,547
Office equipment,
furniture and fittings
173 222 52
Theme Park - - -
TOTAL 4,650 9,929 3,499
22. Sycal Ventures Bhd. Company Analysis 22
2015
RM ‘000
2014
RM ‘000
2013
RM ‘000
- Hire purchase 3,517 3,081 3,092
- Term loan 86 5,447 -
- Cash payments 1,047 1,401 407
TOTAL 4,650 9,929 3,499
Equal to Total Additions of the year
37. Sycal Ventures Bhd. Company Analysis 37
Required New Funds (RNF) = A (ΔS) − L (ΔS) − PS2 (1−D)
S S
A/S = Percentage of relationship of variable assets to sales
ΔS = Change in sales
L/S = Percentage of relationship of variable liabilities to sales
P = Profit margin
S2 = New sales level
D = Dividend payout ratio
Required New Funds for 2016
38. Sycal Ventures Bhd. Company Analysis 38
Required New
Funds (RNF) = 135.13% (19,303) − 70.20% (19,303) − 5.38% (341,020) (1-0%)
= 26,083.71 − 13,550.87 − 18,346.88
= RM (5,814.04)
Required New Funds for 2016
Negative number indicates, with the forecasted 6%
revenue growth, NO Additional external Funds are
needed , to fund the growth
40. Sycal Ventures Bhd. Company Analysis 40
• Have great competitive advantages over companies
• Major drop in cash flow
• Takes a long time to pay accounts payable
• Maintain a strong positive cash flow
• Be more consistent in selling off its inventories and
maintain a positive cash flow.
Eg.: With a predicted 6% Revenue growth in 2016 by Sycal Berhad, the forecast of the income statement for the financial year of 2016 can forecasted by the percent-of-sales method. As seen in the slide:
Mention: Calculations can be seen in the hardcopy report
