The initial public offering of the Chinese company, Xiaomi Corporation (Xiaomi), would start trading on the Hong Kong Exchanges and Clearing Market (HKEx) on July 9, 2018. The CEO of Xiaomi argued that the company should be priced like an internet firm, since internet services and internet of things formed a major part of the firm’s strategy and profit, and hence should command a higher valuation. Some analysts, however, attached a lower value to Xiaomi, which was viewed as a smart phone manufacturer since this segment contributed the majority of the firm’s revenue. Hence, this case provides an opportunity for students to value a company that operates in diverse business segments: smartphone manufacturer, internet services and internet of things

In 2018, Changsheng Bio-technology Co., Ltd. (Changsheng), a leading biopharmaceutical company and one of the market leaders in vaccines, was found to have falsified its production and inspection data and to have sold substandard vaccines in the Chinese market. The unethical conduct triggered widespread public anger and immediate government intervention. What actions could Changsheng take to mitigate the effect of this scandal?

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On February 24, 2016, HTL International Holdings Ltd (HTL), a Singapore-based furniture company, announced that it had entered into a purchase agreement with Guangdong Yihua Timber Industry Co. Ltd (Yihua). According to the agreement, which was subject to approvals, Yihua would pay SG$1.00 for each share of HTL. However, the agreement required that HTL meet set profit targets in each of the next three years. A compensation agreement between HTL’s controlling shareholder and Yihua stipulated that if HTL did not make its profit targets, HTL’s controlling shareholder would make up the shortfall to Yihua. When the agreement was announced, HTL’s share price was at $0.70, and the $0.30 gap signalled uncertainty about whether Yihua’s shareholders would agree to the acquisition. Minority shareholders and potential investors, who were not bound by the profit guarantee, needed to decide whether they should buy, sell, or hold HTL’s shares.

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Mary Chia Holdings Limited (MCH) was a provider of lifestyle and wellness services for women and men in Singapore and Malaysia. Listed on the Singapore Catalist, the company had experienced a decline in financial performance and share price. On August 24, 2017, MCH announced that its founder would sell her 60.98 per cent stake to Suki Sushi Private Ltd., an unlisted company tightly controlled by the daughter and son-in-law of MCH’s founder. Suki Sushi’s offer was at SG$0.111 per share, which was almost double the closing price. Should current MCH shareholders accept Suki Sushi’s offer and sell their shares, and does Suki Sushi’s offer constitute an investment opportunity for investors not currently holding MCH shares?

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Samsui Supplies & Services Private Limited provided 1.8 million meals annually to long-term care facilities in Singapore through the company’s flagship project, Samsui Central Kitchen. The company had won accolades for its work, and in April 2018, the director felt that the time was right to expand the project. He wondered, however, how he would illustrate to the organization’s key stakeholders the social impact Samsui was having in the SG$89 million market of providing meals for long-term care facilities. To gain support for scaling up Samsui’s initiatives and maximizing the social impact the company was delivering, the director needed to quantify the impact of the company’s corporate social responsibility initiatives in a clear and simple message to its various stakeholders.

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In 2012, the founders of food wholesale company FoodXervices Inc. Pte. Ltd. identified a gap between food wastage and food insecurity in Singapore. To reduce this gap, they established a charity arm, The Food Bank Singapore Ltd., which operated as a liaison, collecting near-to-expiry, excess, and unwanted food products from food suppliers, retailers, and restaurants for distribution to beneficiary organizations. When the charity was founded, it was set up to be legally independent to ensure clearer accounts and audits and to prevent false allegations of misuse of food donations. In April 2018, the founders were considering integrating these two now-mature entities to take advantage of potential internal and external synergies. They needed to determine the optimal way to integrate the two entities, while considering the needs of all stakeholders.

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In 2014, the vice-president of Group Corporate Social Responsibility at Singtel, a Singapore-based provider of telecommunications products and services, was scrutinizing his proposal for the company’s corporate social responsibility (CSR) transformation. He wanted to reposition Singtel’s CSR approach to create greater social impact while demonstrating greater benefit to the company beyond promoting its branding and reputation. In doing so, he was mindful that the proposal would require greater financial investment on the part of the company. The proposal would also need to leverage the company’s capabilities and partnerships and address the possibility of dropping its current beneficiaries. His team needed to convince the board of directors and senior management that the potential benefits of the proposed changes would be worth the financial investment and the possibility of reduced brand exposure.

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On April 14, 2014, CapitaLand Limited, a Singapore-based real estate company, launched a voluntary conditional cash offer of SG$2.22 for each share (SG$3.06 billion in total) of its subsidiary commercial property development and management company, CapitaMalls Asia Limited (CMA). CMA’s principal business strategy was to invest in, develop, and manage a diversified portfolio of real estate used primarily for retail purposes in Asia. CapitaLand’s offer represented a 22.3 per cent premium over CMA’s closing price of SG$1.815 on April 11, 2014. The intention was to delist CMA and fully integrate it into CapitaLand. As an investor in CMA, you are seeking a reasonable valuation of CMA based on its past financial performance and other relevant market information. You also need to compute the premium, net present value (NPV), and synergy of the acquisition.

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In 2018, the Singapore-based telecommunication operator StarHub Ltd. (StarHub) acknowledged that in 2017 its total revenue was relatively flat and its net profit had declined. In the face of rising competition and a slowing global economy, the company needed to explore new sources of revenue growth. Two areas of growth seemed promising. The first area involved the launch of StarHub’s smart retail analytics for small and medium enterprises in the retail food and beverages industry, which had been experiencing a high churn rate. The second area would apply StarHub’s new robotics and automation solutions in the labour-intensive hospitality industry, which suffered from an oversupply of properties and would likely see exits and consolidation. StarHub needed to choose between the two investment options.

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Kapap Academy Pte. Ltd. (Kapap Academy) was established in 2007, following the tragic death of the founder’s older brother, with a mission to empower everyday people to learn realistic self-defence skills. The founder and his apprentice-turned-business partner formulated a simple yet functional brand of self-defence, which they named the Modern Street Combatives method. Kapap Academy’s social mission was evident in its provision of both heavily discounted and completely free training sessions for needy and vulnerable segments of society—in particular, women who were victims of domestic abuse and sexual assault, as well as the elderly. Kapap Academy was able to sustain this social mission with a dual income stream. After its 10th-year anniversary, Kapap Academy was looking to export its brand of Modern Street Combatives overseas. This posed various challenges; in particular, whether to adopt a licensing model or a franchise arrangement. Each model had its pros and cons, but a decision had to be made.

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