MBOC 7013: You are the Chief Investment Officer of an International Investment Firm: Financial Management Assignment, IMUW, Malaysia

Case Study: Initial Public Offering of Ordinary Shares of Mr. DIY Bhd

This is a case study on a company [Mr. DIY Group (M) Bhd] principally engaged in low-cost retailing for Home Improvement (Hardware, Household, Electrical, Furnishing, Car Accessories, Stationery & Sports, Toys, Gifts, Computer & Mobile Accessories, and Jewellery & Cosmetics). The company is in the process of raising funds from the capital market through the issuance of new shares and offers for the sale of existing shares. The prospectus was issued on 6th October 2020. To ensure the success of the subscription of the shares, the owners and management intend to conduct a roadshow for all categories of investors as well as analysts.

YOUR TASKS:

You are the Chief Investment Officer of an International Investment Firm. You are required to analyze the largest IPO on Bursa for the last 3 years and prepare a recommendation to your management/board to accept or reject the investment for the said IPO. You need to review the prospectus (a summary of the prospectus is attached and please read the full prospectus from Bursa Malaysia or the company’s website) as well as all other available information. Useful information especially from class lectures; news reports, selected reading materials as well as each group member’s diversified experience and academic background will definitely help the students to make an informed decision on the investment choices available. The company will be listed on the main market of Bursa Malaysia very soon and all information regarding the prospect and performance of the company is available on Bursa’s website, the business section of major newspapers, and the company’s website.

The purpose of the study is to improve the understanding of students especially on Equity Analysis (stock valuation) and portfolio management as well as the application of finance theories to the fundraising exercise. The case study will be in a form of an individual project to ensure that the exercise achieves its intended objective, compulsory participation is required from all the students.

The assignment requires the students to perform the following:

i. Understand the business operation, climate, and economic environment and compare with the competitors;
ii. Understand the purpose of fund-raising (i.e. IPO);
iii. Understand the company’s financial position and do a simple financial analysis and comparative evaluation;
iv. Understand the purpose of making your investment and what is your strategies;
v. The return and risk and benchmark against other indicators;
vi. Indicative valuation of fair value; and
vii. Broad understanding of the financial markets

Answer

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