Emily Wang, an analyst with Future Securities, a Shanghai-based investment firm, is given the task of making stock purchase recommendations to her supervisor from a number of Chinese common stocks. One stock in particular, Hubei Lantian Co., Ltd. (Hubei Lantian), caught Emily's attention as a likely purchase recommendation. Before making her recommendation decision, Emily felt she needed to look deeper into the company's operating performance and financial condition. To this end, Emily performed a financial ratio analysis comparison of Hubei Lantian's financial ratios to those of selected peer companies. Hubei Lantian's major revenue sources were aquatic products (fish, ducks) and beverages (lotus root juice, mineral water). Guided by these revenue sources, Emily selected the financial statements of four companies in the fishery industry and three companies in the food and beverage industry to perform a peer company comparative financial ratio analysis. The case reproduces the individual company financial ratios Emily computed for her comparative ratio analysis. The student's task is to use these ratios and whatever insights they can develop from the case data to assess Hubei Lantian's individual and comparative performance, financial condition, and quality of earnings. In addition, the case assignment asks students to suggest possible lines of inquiry Emily might pursue if given the opportunity to conduct field research. At the end of the class, students are asked to make a stock recommendation.
It is the August, 2011 and Shanghai and China are in a real estate bubble. But the office leasing market seems to be still healthy. Camille Ping has a 2000 square meter tenant prospect, Advanced Furniture Systems, to move into Corporate Avenue, a new 67,000 square meter first class office building which is part of the Shui On Land Taipingqiao development in Puxi. The landlord and the tenant have agreed upon a letter of intent and Camille, also known as the "Iron Lady", has sent a draft lease for the tenant's review and signature. In response, the tenant's lawyer has sent back a detailed written response raising 25 questions. The leasing broker is anxious to close the deal. Camille has to decide how to proceed with the negotiation and how to respond to the myriad of issues raised in the tenant's lawyer's letter.
ATR KimEng is a Philippino asset management business. It is making an important decision on its own strategy going forward: should it stay independent, or be taken over by a large bank in the region. Through this case, we disuss the financial service industry in South East Asia, and study the opportunities and challenges presented by the changing global market dynamics.
CARD (Center for Agricultural and Rural Development) is a Philippines-based microfinance organization that began as an NGO and has since expanded into eight related entities providing services to the poor. Under Founding Director Dr. Aristotle Alip's leadership, CARD has become one of the top microfinance institutions in the world. More recently, larger commercial and financial institutions are seeking a slice of the microfinance market. The main dilemma Dr. Alip faces is: Should he partner with commercial institutions to reap benefits from their larger sources of capital and technology expertise? Would that mean compromising his original mission of elevating people from the base of the pyramid?
Stan Shih, founder-CEO of Acer, Inc., had proactively chosen and transitioned the "perfect" successor as CEO, but was now faced with major problems. Over the last two years, his heir apparent, Leonard Liu, had made the changes he had been hired to make, including revamping the organization structure and instilling a new corporate culture that emphasized accountability. However, such changes had caused numerous clashes between him and other cofounders of the company, in particular, Shih's wife, Carolyn. Liu had now suggested that "Carolyn should retire into her kitchen." Faced with office infighting and increasing clashes between the markedly different Western and Chinese styles of management, Shih needed Liu to manage the increasing complexity of global competition. However, Shih was now wondering if he had made the right decision to appoint Liu as his successor.
Fu Chengyu is the fifth CEO to lead China National Offshore Oil Company - an SOE founded in 1982 to exploit Chinese offshore deposits. In 2010 he is trying to decide how to drive further growth in a company that has grown 556 times in less than 30 years, with profits grown 2600 times. He believes that the way CNOOC has been managed, a blend of market orientation and concern for employees and the nation has contributed importantly to the success. His challenge is to allocate resources among new areas to explore for petroleum and new sources of energy, and to develop managers with the capability of leading those businesses in the face of world class competitors. Both technical talent and the ability to integrate the efforts of non-Chinese leaders are involved.
A residential real estate developer competes in a heated auction for a prime retail development site in the interior of China during the 2009 boom. Total project cost might be in excess of $1billion US for over 4,000,000 square feet of building. Hang Lung Properties has enjoyed success in residential building in Hong Kong but has focused on very limited projects in China, notably two retail properties in Shanghai. After a decade in Shanghai the firm decides to enter second tier Chinese cities including Chengdu, a city of 11 million in interior China. The case covers Hang Lung Properties' due diligence and thought process with respect to anticipated rental income, construction costs, and land costs. The auction includes many other well capitalized firms and the price escalates. Hang Lung's team must decide whether to participate or withdraw. Students need to use judgment with respect to estimates of key variables including stabilized income, construction cost, and minimum expectations for return on investment in order to prepare their bids. The (B) case goes into further steps in the auction as well as Hang Lung Properties' internal discipline with respect to asset types, infrastructure in target cities, and baseline returns.
Second phase of auction for a prime retail development parcel in Chengdu, China. Competition forces the firm to revisit all of its land purchase criteria. Hang Lung Properties is known for rigorous due diligence, for discipline in buying property, and for good understanding of market cycles. The (B) case reveals the firms assumptions in the Chengdu situation, as compared to what students had to derive on their own in the (A) case. The (B) case also reviews strategic focus with respect to asset classes and geography, as well as best practices for what to look for in cities that will be attractive for superblock mixed use projects.
Park Hyeon-Joo, the founder and Chairman of Korea's earliest and largest mutual fund company, plans to expand internationally. After first offering emerging market funds to his Korean customers, the company then began selling local-currency funds in India and Brazil. Now he has to decide his next steps. Should he build on his emerging market expertise and focus his business expansion in developing countries? If so, where should he concentrate his efforts -- India, Brazil, China, or other countries? Or should he instead focus on expanding into developed markets through operations in New York and London?
The world's leading Thai agribusiness corporation and largest agribusiness investor in China, CP Group, is facing another crossroads in China as the country starts to undergo rural reform. The issues at hand for Chairman Dhanin Chearavanont is how CP can balance its place as a key investor in China's burgeoning agriculture market with its unstated obligation to also provide guidance and expertise in food safety, technology, as well as jobs for rural farmers while still competing against the growing cadre of international and domestic companies vying to grab share from its operations in China. Was rural reform going to help or hinder CP's position in China and was CP doing all it could to take advantage of these changes?
What role does trade finance play in facilitating global supply chain management? Richard S. Elman, founder and CEO of Noble Group Ltd., a global commodities trading company based in Hong Kong, must raise capital to support the firm's working capital and investment needs. In evaluating by which means Elman should raise capital, students must consider issues relating to the payment terms and financing arrangements used in world trade, as well as the risk management and operating decisions of a trade intermediary.
In September 2007, the Group President of CapitaLand has to select a new CEO for a key subsidiary. The case presents the profiles of three candidates-two internal and one external-and ends with the senior management team debating the candidates' merits.
Grace Vineyard was a rare family-owned, private winery in China that was set on establishing itself as a world-renowned, quality vintner. Judy Leissner, the second generation company leader was at a crossroads in how she wanted to grow the business that her father founded in 1997. Their wines were rapidly growing a strong following and had won international awards. How could the company capitalize on this success? Should Grace expand its operations to multiple Chinese provinces? Should Grace continue as a premium boutique winery serving a growing but ultimately limited niche market in China, or should it seek to make a mark internationally? Or should Grace respond to buy-out offers?
Huang Teng founded Xi'an International University (XAIU) as a private institute of higher education in 1992. Throughout its ensuing years, the school filled a niche and met the demand of students who did not test into one of China's public institutions. In 2008, it was seeking to grow by aggressively pursuing opportunities in other provinces and municipalities. Huang's plan was to franchise his university throughout China. However, in pursuing this strategy in Beijing, Shanghai and Guangzhou, China's largest cities, Huang was not receiving warm responses. Local officials feared XAIU would jeopardize the survival of locally-run, private universities, and competition among private universities was heating up as institutions from the United Kingdom and Hong Kong partnered with public universities to form joint-ventured "independent colleges." Buoyed by the success of XAIU, Huang was confident that despite these setbacks, his franchise model would work. But was an alternative plan of expanding into second or third tier cities compromising too much of the groundwork that had already been laid, would it jeopardize XAIU's funding opportunities, and finally, would it hurt the academic quality and integrity XAIU had built up at home?
To deliver 5-6 major new Chinese joint ventures annually, Hong Kong China Gas executives began extracting cross-border negotiating lessons from their 80 existing Chinese JVs. Chairman Alfred Chan and CEO Peter Wong knew that HKGC's growth strategy required significant mainland expansion through negotiating joint-ventures to run gas and water distribution systems in diverse urban and rural locations throughout mainland China--often in the face of entrenched local interests who could have blocking power. Discussions with HKGC's negotiation teams revealed an increasingly sophisticated negotiating approach from target identification and party mapping, to "social mapping" and building guanxi, to creative deal design and tactics, in order to most effectively work out issues of equity, management control, territory, and exclusivity.
After fifty-five years in the semiconductor industry, Morris Chang, founder and Chairman of Taiwan Semiconductor Manufacturing Company (TSMC), was seeing a change. After four decades of regular double-digit growth the industry was still growing-but now at a much slower pace. In 2004, TSMC entered the China market, the world's second largest for semiconductors, by building a fabrication plant in Shanghai. Was China the market opportunity which TSMC could bet on for expansion, or should its strategy be to focus on new product development and innovation?
As part of its expansion and diversification strategy, the Chiaphua Group explored real estate investments in emerging markets. The Group was one of the largest privately held company groups based in Hong Kong, with international investments in a variety of manufacturing and property development. A family member, Raymond Cheng, had narrowed the list of potential markets to Singapore, Malaysia, Indonesia, and Vietnam. Notwithstanding a history of instability and conflict and substantial government control of markets, Raymond concluded that Vietnam was the best option. Revolves around how to assess the market in the absence of hard data, and what would be the appropriate entry points. Illuminates how relationship-driven investments can be the foundation of a long-term investment strategy. Issues also involve how, by working with government through a structured forum (along with personal relations), laws and regulations can evolve to facilitate real estate investments.