Breadtalk Analysis Essay

9623 Words Aug 26th, 2013 39 Pages
Executive Summary
This reports aims to establish the current issues that BreadTalk Group Limited is facing and how the issues will have an impact on their earnings and share valuations. In our report, a computation of DuPont ROE Analysis between BreadTalk, Food Junction and Auric Pacific was examined and it was noticed that BreadTalk’s ROE is predominantly higher than Food Junction and Auric Pacific over the years of our forecast from FY2012 to FY2015. Based on the calculations, several assumptions and limitations on BreadTalk’s intrinsic value of share price were analysed and consequently estimated with four models. These models are Dividend Valuation Model, Free Cash Flow to Equity Model, Price/Earnings Ratio Model and the Price/Book
…show more content…
Wheat prices increased greatly from the past 6 months but gradually decreasing at an average rate of 0.87% as of 13 September 2012 (MarketWatch 2012b).
However, crude oil prices decreased significantly during the first half of 2012. But from July onwards, it rose at an average of 14% for the next 3 months (MarketWatch 2012a).Similarly, the prices of sugar dropped moderately before rising at an average rate of 0.15% as of 13 September 2012 (MarketWatch 2012c).
In view of the above commodities fluctuations, we can understand that these essential raw materials greatly affects the operating cost for the businesses under the BreadTalk group as they are basic necessities for the input of their daily operations. II. Gross Domestic Product (GDP)
A recent quarterly Survey of Professional Forecasters released by Monetary Authority of Singapore (MAS) reveal that Singapore’s GDP will be expected to expand at a slower pace this year at 2.4% compared to a median of 3.0% estimated three months ago (AsiaOne 2012).
Singapore’s official economic growth is set to be 1.5% to 2.5% this year with the growth of manufacturing and financial sectors adjusted down from 3.0% to 2.7% and 2.7% to 1.1% respectively. At the consumer end, retail sales reported significant growth in the first few months of January and February. The food and beverage services sector has seen an average increase in their sales of up to 2.6% month-on-month, largely contributed by the increase in

Related Documents