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About C Company

Page 1 of 4

Section 1

Background of C company (the seleced company)

About C Company

C company is an US chemical specialty products manufacturer, listing in NYSE. End-uses of its products are across a wider range of industries, including Automotive, Electronics, Medical device, Home appliance, and so on. The company’s income statements of 2012 through 2014 are as follows:

Overall, both of its sales revenue and gross margin were growing steadily in the period. While emerging market regions such as China are playing the role of growth engine, challenges from rising local competitors are increasing significantly.

Table 1 Income Statements 2012-2014 of C Company

All figures in USD. M: Millions of USD, B: Billions of USD.

Fiscal year is Jan - Dec.

2014

2013

2012

Net Sales or Revenues

6.8B

6.51B

6.42B

Cost Of Goods Sold (COGS)

5.19B

5.15B

5.23B

Gross Profit

1.62B

1.37B

1.19B

Research & Development Expense

86M

85M

102M

Selling General & Admin Expense

752M

-260M

528M

Income Before Depreciation Depletion Amortization

778M

1.54B

562M

Depreciation Depletion Amortization

20M

32M

51M

Non Operating Income

330M

273M

331M

Interest Expense

147M

172M

185M

Pretax Income

941M

1.61B

657M

Provision for Income Taxes

314M

508M

48M

Minority Interest

-4M

-

-

Income Before Extraordinaries & Disc Operations

627M

1.1B

609M

Extraordinary Items & Discontinued Operations

-7M

-

-4M

Net Income (Profit/Loss)

624M

1.1B

605M

Dividend Per Share Common

0.93

0.53

0.27

Competitive Environment

Arena:    Material

Industry:  Plastic

Market:   Thermoplastic for injection molding, compression molding, and extrusion.

Trend in demand and supply sides

On one hand, there’s an increasing trend of plastic overtaking metal in industries including Automotive, Electronics, Medical device and Home appliance, etc., due to the demand for weight reduction and benefits such as corrosion-resistance. On the other hand, competition is increasing as well:  Local competitors are growing fast in terms of capacity and quality.


Section 2

Portfolio analysis of C company

The company’s sales revenue comes from 4 major market segments: Automotive, Electronics, Medical device and Home appliance. Finance performance of the four business units is as follows:

Table 2 Finance performance of 4 major BU

All figures in USD. M: Millions of USD, B: Billions of USD.

2012

2013

2014

Automotive

Revenue

3.54

3.20

2.96

% of Total Revenue

52%

47%

43.50%

Gross Margin

0.49

0.45

0.42

% of Total Gross Margin

30%

28%

26.10%

Electronics

Revenue

1.43

1.41

1.16

% of Total Revenue

21%

21%

17%

Gross Margin

0.41

0.39

0.26

% of Total Gross Margin

25%

24%

16%

Medical

Revenue

0.48

0.75

0.88

% of Total Revenue

7%

11%

13%

Gross Margin

0.37

0.55

0.73

% of Total Gross Margin

23%

34%

45%

Home Appliance

Revenue

1.36

1.44

1.80

% of Total Revenue

20%

21%

27%

Gross Margin

0.35

0.23

0.20

% of Total Gross Margin

22%

14%

13%

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