INTERNATIONAL FINANCE

Submitted By: Ayesha Khalil S2f14mcom0027 Asfa Basharat S2f14mcom0011

Khadija Jamil S2f14mcom0009

Submitted to: Prof. Alamdar

Haier Group is a Chinese multinational consumer electronics and home appliances company headquartered in Qingdao, Shandong province, China. It designs, develops, manufactures and sells products including air conditioners, mobile phones, computers, microwave ovens, washing machines, refrigerators, and televisions.Haier the world leader in home appliances is celebrating 30th years of outstanding success on a global scale. According to data released by Euro monitor, in 2014 the Haier brand had the world's largest market share in white goods, with 10.2 per cent retail volume market share. This was the 6th consecutive year in which Haier had been the market share leader for major appliances.

Low Yat Plaza is a shopping mall specializing in electronics and IT products in Kuala Lumpur, Malaysia. In 2009, Plaza Low Yat was named “Malaysia’s Largest IT Lifestyle Mall” by the Malaysia Book of Records.

Plaza Low Yat falls under the Low Yat Group, alongside other properties in the city center such as Federal Hotel, Capitol Hotel, Federal Arcade and BB Park.Toshiba, Nokia, Celcom, Sony, Digi, Microsoft, Dell, Maxis, FotoKem, HTC, Samsung, Nikon, Acer and Lenovo are just a few stores that occupy retail space here.

We start up our business by launching the brand name Haier in Low Yat Plaza (a shopping mall specializing in electronics and IT products) in Kuala Lumpur, Malaysia.

There are already so many competitors of Haier in this plaza, therefore we choose some of these competitors and calculate their “Net Present Value” to check the feasibility of Haier in this plaza.

Launching Haier

in Low Yat Plaza

3 Important Competitors of Electronics in Low-Yat Plaza

Samsung Sony Dell

Dell Inc. is an American privately owned multinational computer technology company based in Round Rock, Texas, United States, that develops, sells, repairs, and supports computers and related products and services.Dell sells personal computers (PCs), servers, data storage devices, network switches, software, computer peripherals, HDTVs, cameras, printers, MP3 players, and electronics built by other manufacturers. The company is well known for its innovations in supply chain management and electronic commerce, particularly its direct-sales model and its "build-to-order" or "configure to order" approach to manufacturing—delivering individual PCs configured to customer specifications.

• Dell was listed at number 51 in the Fortune 500 list, until 2014. After going private in 2013, the newly confidential nature of its financial information prevents the company from being ranked by Fortune. In 2014 it was the third largest PC vendor in the world after Lenovo and HP. Dell is currently the #1 shipper of PC monitors in the world. Dell is the sixth largest company in Texas by total revenue, according to Fortune magazine.

Performance of DELL

Sale Projection of Dell

Year 2010 2011 2012 2013 2014

Sales 43623 53999 53341 52708 55870

Annual growth rate

53999-43623 X 100 43623

53341-53999 X 100 53999

52708-53341 X 100 53341

55870-52708 X 100 52708

23.28 % - 1.21 % - 1.186 % 5.99 %

AVERAGE GROWTH RATE

23.28 - 1.21 - 1.186 + 5.99 4

= 6.845 %

Forecast Sale Projection of Dellfor Next 5 year

Year 2014 2015 2016 2017 2018 2019

Projectionin Sale 55870

55870+55870 59694.30 + 59694.30 63780.37 + 63780.37 68146.13+68146.13 72810.73 + 72810.73

59694.30 63780.37 68146.13 72810.73 77794.67

6.845 X 100

6.845X 100

6.845X 100

6.845X 100

6.845X 100

Year 2010 2011 2012 2013 2014

Cost of Sales 15132 20242 20190 21187 20261

Annual growth rate

20242-15132 X 100 15132

20190-20242 X 100 20242

21187-20190 X 100 20190

20261-21187 X 100 21187

33.76% -0.25% 4.93% -4.37%

Cost of Sales

AVERAGE GROWTH RATE OF COST OF SALE

33.67+4.93-0.25-4.37 4

= 8.51 %

Forecast Cost of Sale ProjectionYear 2014 2015 2016 2017 2018 2019

Projection in Sale 20261

20261 + 20261 21985.21 + 21985.21 23856.15 + 23856.15 25886.30 + 25886.30 28089.22 + 28089.22

21985.21 23856.15 25886.30 28089.22 3047.61

8.21 X 100

8.21X 100

8.21X 100

8.21X 100

8.21X 100

2014 2015 2016 2017 2018 2019

Initial investment (21781)

Cash flows 37709 39924 42260 44722 47315

Exchange Rates 1.56 1.56 1.56 1.56 1.56

Translate Amount 58826 62281 65926 69766 73811

Discount Rate 15% 15% 15% 15% 15%

Discount Factor (1.15)1= 1.15

(1.15)2= 1.3225

(1.15)3= 1.5208

(1.15)4= 1.7490

(1.15)5= 2.0113

Present Value 51153 47093 43347 39888 36697

Cash Flow Schedule (amount in millions)

Net Present Value of DELL

• NPV = present Value – Initial Investment = 218168 – 21781 = 196387

Sony Corporation commonly referred to as Sony is Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. Its diversified business includes consumer and professional electronics, gaming, entertainment and financial services.

The company is one of the leading manufacturers of electronic products for the consumer and professional markets. Sony is ranked 116th on the 2015 list of Fortune Global 500. Sony Corporation is the electronics business unit and the parent company of the Sony Group, which is engaged in business through its four operating segments – electronics (including video games, network services and medical business), motion pictures, music and financial services.

• Sony Pictures Entertainment, Sony Computer Entertainment, Sony Music Entertainment, Sony Mobile Communications (formerly Sony Ericsson) and Sony Financial. Sony is among the Worldwide Top 20 Semiconductor Sales Leaders and as of 2013, the fourth-largest television manufacturer in the world, after Samsung Electronics, LG Electronics and TCL.

• Sony develops consumer software for digital video (Sony Vegas Pro and Movie Studio), audio (Sound Forge), music production (ACID Pro), DVD production and Blu-ray Disc authoring (DVD Architect Pro). Sony Sound Series is a collection of royalty-free loops and samples.

In 2014, Sony participated within NRG Energy eVgo Ready for Electric Vehicle (REV) program, for EV charging parking lots.Sony is in the business of electric vehicle lithium-ion batteries.IT giants such as Google (driverless car) and Apple (iCar/Project Titan) are working on electric vehicles and self driving cars, competing with Tesla; Sony is entering into this field by investing $842,000 in the ZMP company.

Performance of SONY

Sale Projection of SONY

Year 2010 2011 2012 2013 2014

Sales 5902201 6304401 5526611 5691216 6800851

Annual growth rate

6304401 - 5902201 X 100 5902201

5526611 - 6304401 X 100 6304401

5691216-5526611 X 100 5526611

6800851 - 5691216 X 100 5691216

6.81% -12.33% 2.97% 19.49%

AVERAGE GROWTH RATE IN SALE

6.81-12.33+2.97+19.49 4

= 4.23 %

Forecast Sale Projection of SONY for next 5 year

Year 2014 2015 2016 2017 2018 2019

Projectionin Sale 6800851

6800851 +6800851 7088527+7088527 7388372 + 7388372 7700900 + 7700900 8026648+8026648

7088527 7388372 7700900 8026645 8366175

4.23 X 100

4.23X 100

4.23X 100

4.23X 100

4.23X 100

Year 2010 2011 2012 2013 2014

Cost of Sales

44321624831363 4386447 4485425 4593435

Annual growth rate

4831363-4432162 X 100 4432162

4386447 - 4831363 X 100 4831363

4485425 - 4386447 X 100 4386447

4593435 - 4485425 X 100 4485425

9.00% -9.20% 2.25% 2.40%

Cost of Sales

AVERAGE GROWTH RATE

9.00 – 9.20 + 2.25 + 2.40 4

= 1.11 %

Forecast Cost of Sale ProjectionYear 2014 2015 2016 2017 2018 2019

Projection in Sale 4593435

45934351 +45934351 4644422 + 4644422 4695975 + 4695975 4748100 + 4748100 4800803 + 4800803

4644422 4695975 4748100 4800803 4854091

1.11 X 100

1.11X 100

1.11X 100

1.11X 100

1.11X 100

2014 2015 2016 2017 2018 2019

Initial investment (630923)

Cash flows 2444105 2692397 2952800 3225845 3512084

Exchange Rates 1.56 1.56 1.56 1.56 1.56

Translate Amount 15669298 1725895 1892820 2067855 2251335

Discount Rate 10% 10% 10% 10% 10%

Discount Factor (1.1)1= 1.1

(1.11)2= 1.21

(1.11)3= 1.331

(1.11)4= 1.4641

(1.11)5= 1.6105

Present Value (P.V)

14244816 1426359 1422103 1412372 139701

Cash Flow Schedule (Amount in millions)

Net Present Value of SONY

• NPV = present Value – Initial Investment = 18645351 – 630923 = 18014428

Samsung is a South Korean multinational conglomerate company] headquartered in Samsung Town, Seoul. It comprises numerous subsidiaries and affiliated businesses, most of them united under the Samsung brand, and is the largest South Korean chaebol (business conglomerate). Samsung has a powerful influence on South Korea's economic development, politics, media and culture and has been a major driving force behind the "Miracle on the Han River". Its affiliate companies produce around a fifth of South Korea's total exports. Samsung's revenue was equal to 17% of South Korea's $1,082 billion GDP

Notable Samsung industrial subsidiaries include Samsung Electronics (the world's largest information technology company measured by 2012 revenues, and 4th in market value),

Samsung Heavy Industries (the world's 2nd-largest shipbuilder measured by 2010 revenues),and Samsung Engineering and Samsung C&T (respectively the world's 13th and 36th-largest construction companies).

Other notable subsidiaries include Samsung Life Insurance (the world's 14th-largest life insurance company), Samsung Everland (operator of Everland Resort, the oldest theme park in South Korea) and Cheil Worldwide (the world's 15th-largest advertising agency measured by 2012 revenues).

Sale Projection of SAMSUNG

Year 2010 2011 2012 2013 2014

Sales 134076414 154048895 817754283 217243913 195882955

Annual growth rate

154048895-134076414 X 100 134076414

817754283-154048895 X 100 154048895

217243913-81775283 X 100 817754283

195882955-217243913 X 100 217243913

14.89% 21.87% 15.70% -9.83%

AVERAGE GROWTH RATE

14.89+21.87+15.70-9.83 4

= 10.65 %

Forecast Sale Projection of SAMSUNG for next 5 year

Year 2014 2015 2016 2017 2018 2019

ProjectionOf Sale 195882955

195882955+ 195882955

216744489+216744489

239827777+239827777

265369435+265369435

293631279+ 293632179

216744489 239827777 265369435 293631279 324903010

10.65 X 100

10.65X 100

10.65X 100

10.65X 100

10.65X 100

Year 2010 2011 2012 2013 2014

Cost of Sales

90145900104700887 118244730 130802991 121856939

Annual growth rate

104700887-90145900 X 100 90145900

118244730-104700887 X 100 104700887

130802991-118244730 X 100 118244730

121856939-130802991 X 100 130802991

16.14% 12.93% 10.62% -6.83%

Cost of Sales

AVERAGE GROWTH RATE

16.14+12.93+10.62-6.83 4

= 8.21 %

Forecast Cost of Sale ProjectionYear 2014 2015 2016 2017 2018 2019

Projection of cost 121856939

121856939+121856939

131861393+131861393

142687213+142687213

154401833+154401833

167078223+167078233

131861393 142687213 154401833 167078223 180795345

8.21 X 100

8.21X 100

8.21X 100

8.21X 100

8.21X 100

2014 2015 2016 2017 2018 2019

Initial investment (739097)

Cash flows 84883096 97140564 110967602 126553056 144107664

Exchange Rates 1.56 1.56 1.56 1.56 1.56

Translate Amount 132417629 151539279 173109459 197422767 224807955

Discount Rate 13% 13% 13% 13% 13%

Discount Factor (1.3)1= 1.3

(1.13)2= 1.2769

(1.13)3= 1.4428

(1.13)4= 1.6304

(1.13)5= 1.8424

Present Value (P.V)

117183742 118677483 119973538 121083080 122016751

Cash Flow Schedule (Amount in millions)

Net Present Value of SAMSUNG

• NPV = present Value – Initial Investment = 598934594 – 739097 = 598195497

Conclusion

Well after meticulous calculations, observations and analysis, we have ultimately chosen Dell, Samsung & Sony the competitors of Haier and calculated the net present value which exhibit the positive and dynamic results .

Therefore, by keeping in view the positive result of NPV`s we are ready to go ahead with our new project to launch Haier in Low Yat Plaza

Thank You ALLAH BLESS YOU A L L A H H A F I Z