Finance and Investment : Question and Answer

Running head: FINANCE AND INVESTMENT
Finance and Investment
Name of the Student:
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Author Note

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Table of Contents
Answer to Part 1.........................................................................................................................2
Answer to Question 1.............................................................................................................2
Answer to Question 2.............................................................................................................6
Answer to Question 3.............................................................................................................7
Macro Level Analysis............................................................................................................7
Government regulation.......................................................................................................7
Industry growth..................................................................................................................8
Industry income..................................................................................................................8
Inflation rates.....................................................................................................................9
Interest rates.....................................................................................................................10
Micro Level Analysis...........................................................................................................10
Market competition and goal...........................................................................................10
Debt position and operation.............................................................................................11
Answer to Question 4...........................................................................................................13
Answer to Part 2.......................................................................................................................16
Reference list............................................................................................................................23

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Answer to Part 1
Answer to Question 1
History
The bread-talk company was founded 19 years ago in 2000 when the founding
chairman developed the seed idea to sell breads and buns which were attractive and showed
creativity to make. The first store was opened in Parco Bugis Junction in July 2000 and the
second store in Novena square in the year 2000. It got listed in 2003 on the Singapore Stock
Exchange SGX. The headquarters of the company is in Singapore, and it has expanded to
become a global bakery brand across the globe. Due to various expansion opportunity the
headquarters of bread-talk company was shifted to KA Food-Link, in the year 2001. The
production capacity and increase in space and machinery happened in the year 2002. In
2015, there was a controversy raised against the quality of milk supplied by them (Martins,
Pinho and Ferreira 2017). They had also been accused of selling expired ingredients food but
it did not have any proven claims.
Analysis of stock price due to announcements:
The Bread-talk Company is a global company involved in the bakery industry and
supplying quality bakery products and beverages around the globe through various chains and
brands of outlets. The company is very much involved in delivering quality products to its
consumers to create brand recognition and sustainability. Since it operates its business under
various brands and chain of restaurants any news and announcements pertaining sensitive
information regarding to the company has an impact on the share price. Dr George Quek
Mneg Tong is the chairman of the company. The revenue generated amounts to SG$297.4
million till 2018. It provides employment opportunities to more than 6,900 employees. The
bakery group has its owned group of network for the bakery outlets in various parts of the

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world like PRC, Hong Kong, Malaysia. It also has the setup of franchise outlets across
Middle East and Asia. Bread Talk also made efforts to consolidate as well as improve the
underperforming stores in Singapore and China in the previous year. It has opened two
outlets in 2018, one at Thonglor in Bangkok and another at Northpoint City in Singapore.
The company aims to provide its customers with finest mix of culinary skills that involves a
variety of tastes. They have their own Research and Development team that looks after the
demands and feedback of its customers. The team presents different dishes every few months
ranging from local desserts to delicious dumplings and pastries.
In the year 2017 the company paid around dividend of 7 cents per share which
included final dividend and also special and interim dividend, this news of dividend payment
have an effect on the share price (Hail, Tahoun and Wang 2014). The share price starts to rise
on the date of announcement of dividend and falls just before the last date or the ex- dividend
date. Thus this factor has an effect on the financial performance of the company.
As it is evident from the financial ratio of the company it is seen that overall the
company has improved its gross performance but the net performance was poor due to factors
like increase in tax rate (Gamayuni 2015). The company entered into joint venture
agreements for the procurement of raw materials with a Japanese company. Thus this
significantly affects the cost of raw materials and thus the overall production cost of the
company, and ultimately it affects the margin of profit for the company (Pagotto and Halog
2016). Thus this news has an effect on the stock price of the company as this news is deemed
material and important announcement for the company. Bread-talk entered into Myanmar a
new country and thus wanted to expand business into new territories. This news is taken as a
positive news by the market and has a positive impact on share price.

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In 2018 the company expanded its operation using the 4orth brand group, which is
focussed in expanding the company business into new territories. The company entered into
various joint venture agreements for its acquiring of raw material as well as increasing
efficiency in production and distribution channel. The company has entered into various
agreements with various infrastructure providing companies to implement its expansion
policy with a strong and a rigid support (Swink and Schoenherr 2015). Thus any news of
procurement of servicers from external sources for increasing efficiency creates a positive
impact on the company and also on its share price as it will lead to increase in sales and
revenue for the company due to improved brand recognition.
Financial performance based on Revenue strategy:
Bread-talk being a pioneer in bakery innovation and baked products produces bakery
goods which are exquisite to its own bakery. The company employs various revenue strategy
and company strategy for the selling of its products. The company sponsors various cultural
events and introduces a special food product which is going to be available during that event.
Thus it creates a unique product which appeals the masses and they create a brand image. The
company sponsored an event in 2018 pertaining to the Singapore national day parade and
made a local product known as the golden lava floss and almost 120000 pieces of this product
were sold during that time period (Kim 2016). Also it produced a special crab muffin cake
and almost more than 11000 pieces were sold in its inaugural week.
Technology has the greatest impact on the modern day business as every consumer is
involved and affected by the technological innovation. Due to this factor the company is
involved in innovating its app and enter into agreements and bring out various offers for its
consumers. The company entered into an agreement with the grab pay company to bring
about loyalty offers for its consumers. They can avail cashbacks and discount offers on the

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company produce. Thus this strategy helps in retaining consumers and attract them and thus
ultimately enhance their revenue. The company launched a new app which was downloaded
more than 20000 times in the 4 month period of its launch. The company also has started an
offer where with purchase of any beverages the consumers can purchase a golden flask at
only 1$. Also they can avail a discount of 10% in a month from their last purchase, at any
brands and outlets affiliated to the company. Also the company offers 10% discount if the
consumers bring their own flask to the outlet during the purchase of any beverages. Thus the
company is also focused on reducing the cost of production by acquiring raw materials at a
reasonable cost. For this purpose the company is entering into various agreements with other
suppliers for cost efficiency (Chen, Wang and Qiao 2014). Thus the company is involved in
enhancing revenue as well as cost reduction strategy for its benefits. The credits for the
strategy of maximisation and consolidation has been given to the group that supported the
divisions in focusing on improving the current outlet portfolio mix.
Products and Services
Toast Box, Bread Society, The Icing Room, Food Republic, So Ramen , Thye Moh
Chan are some of its portfolio brands, while Nayuki Tai Gai, Din Tai Fung, Wu Pao Chun
Bakery, and Song Fa Bak Kut Teh are its Partner brands. These are some of the brands of its
portfolio of twelve brands. It has more than 850 stores at different locations around the globe.
The group has made the use of daily staples a healthy and a tasty statement for the
consumers. Thus creating a new way of eating habits among the consumers. The group has a
research and development team which is involved in creating delicious and tasty pastries,
desserts and local cuisines which are appealing to the general public. Every few months the
breadtalk company introduces new products in the market. The company has a vast network
of suppliers, and business logistics to send extereme good quality pastries and desserts to the
different stores. Also the chairman of the bread-talk company is an expert in the beverage and