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Leiyi Huang (Sally) Siyang Zhang Hui Li Qun Yu (Jett)

Leiyi Huang (Sally) Siyang Zhang Hui Li Qun Yu (Jett). April 22 nd , 2014. Agenda. Introduction Company Overview Macro Review Financial Ratio Analysis DCF V aluation Comparable Comps V aluation Recommendation. Introduction. Founded in 1987 Employee: 2500 + 7000

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Leiyi Huang (Sally) Siyang Zhang Hui Li Qun Yu (Jett)

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  1. Leiyi Huang (Sally) Siyang Zhang Hui Li Qun Yu (Jett) April 22nd, 2014

  2. Agenda • Introduction • Company Overview • Macro Review • Financial Ratio Analysis • DCF Valuation • Comparable Comps Valuation • Recommendation

  3. Introduction Founded in 1987 • Employee: 2500 + 7000 • Public traded since 1997 (NASDAQ: SLGN) • 52wk Range: $43.77 – $50.79 • P/E: 17.52 • Market Cap: 3.19 billion • Price @2014/04/21: $50.28

  4. Business Segments margin 8%

  5. Company Overview

  6. Macroeconomic Review • Raw material • Demand from canned fruit and vegetable processing • Global economic condition

  7. Industry Overview • Life cycle: • Decline, Mature, Mature • Industry consolidation • Flat profitability • Metal container: value-added features • Closure: variety • Plastic container: custom design

  8. Porter’s Five Forces

  9. Stock Performance @source from Yahoo.Finance

  10. Greenblatt Ratios Vertical Horizontal

  11. Profitability Analysis

  12. DebtSituations • Raisedebtforacquisitionsandsharebuyback • Concernsaboutthequality of acquisitions: • Quality of Assets • DeclinedEBITMargin • Accrualsratioimproved

  13. Financial Analysis – Discount Rate • Rated BB+ on bonds • BB+ Average Yields are currently very low • High Leverage • Cyclical

  14. Financial Analysis - DCF

  15. Financial Analysis - DCF

  16. Comparable Companies

  17. Comparable Company Analysis Source: Bloomberg

  18. Comparable Company Analysis

  19. Recommendation Current Price: $50.28

  20. Recommendation • Debt management • Acquisition activities • Investment in R&D • Operating efficiency Watch List

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