CB3410 Financial Management

Group Project

Financial Analysis of Companies: Comparative Analysis and Industry Analysis

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Rhodium Fund

I.           Introduction

Rhodium Fund has developed a reputation for successfully managing equity and bond portfolios.

Rhodium attributes their success to thorough fundamental analysis. This analysis drives the security selection in the funds and has delivered substantial returns.

Recently, some clients who invested in Rhodium funds have expressed interest in how

Rhodium selected securities. Cynthia Li is the portfolio manager at Rhodium and is looking into investing in the tech sector and the property sector.

On 25 September 2023, Cynthia has asked Sophia Liu and Ken Ma for assistance in analysing the following stocks:

Tech Sector:

Taiwan Semiconductor Manufacturing Company Limited (TSMC) listed on Taiwan Stock Exchange with stock code 2330

Advanced Micro Devices Inc (NASDAQ: AMD)

Property Sector:

Country Gardens Holdings Company Ltd (HKEX: 2007)

Sun Hung Kai Properties Ltd (HKEX: 16)

Part I. Company Analysis (1,000 words)

List the factors for and against investing in the companies. There is no need to give a buy or sell recommendation, as a lot more analysis is needed for a final recommendation.

i.           The following ratios are to be analysed (Not exhaustive):

ROE

ROA

Various Profit Margin Ratios

Dividend Payout

Sustainable Growth Rates

Degree of leverage.

More ratios, if applicable, are to be included.

ii.          Compare the financial ratios of the two companies listed above in each of the two industries.

iii.         List other factors that will affect the buy/sell decisions.

As for Country Gardens which has already missed some of its debt obligations, a turnaround, if successful, could lead to good returns. Country Gardens is to a

certain extent also affected by sentiment related to the China Evergrande Group (HKEX: 3333).

iv.         Use betas to calculate the required rate of return on equity for each of these companies.

Obtain the screenshots of your applicable analyses from Bloomberg Terminal for five years, i.e., from ending 2018 to 2022 and present estimates or 2023, if available.

Part II. The Semiconductor Industry

In the past, it was said that nations who control the oil supply could control other nations. In today’s world, it has been put forward that nations must secure the supply chain or the

production of chips (semiconductors). Do you agree with this statement? (800-1,000 words)

Your analysis should include the following:

Describe why semiconductors are so crucial for military use.

The uses of semiconductors in daily activities.

Which company (companies) has the dominant position in chip making?

The supply chain for chip production.

What is being done in the USA and China for chip production?

Part III: Bond Analysis: Comparative Analysis

Cynthia is looking into whether to buy the bonds of Sung Hung Kai Properties Ltd. She is

currently looking at International Securities Identification Number XS2099130382. The bond matures on Jan 21 2030. The coupon rate is 2.875%.

Obtain:

Issue Date

Bond Rating

Is there agradual repayment of the principal overtime?

As of today, is the bond selling below par? Why? What is the approximate yield as of the day you do the analysis. Explain why.

For comparative analysis, what is the debt rating of Country Gardens as of September 2023?