INTRODUCTION

Background of the companies

White Horse Ceramic

White Horse Berhad (WTHORSE) is one of the leading tile players in the Asia-Pacific region,
principally involved in manufacturing and distribution of ceramic and homogeneous tiles. Its
history can be traced back to 1947 when White Horse Ceramic Industries Company was founded
in Taiwan in 1947. In 1992, White Horse Ceramic Industries Taiwan had co-operated with 2
parties of Singaporean and Malaysian to introduce the brand name in Malaysia and other
countries in the region. The group was listed on the Main Board of
Bursa Malaysia on 4 October 1999. In 2000, the group entered into an expansion plan with an
investment of RM110mn for the construction of a new manufacturing plant on 31 acres of land
situated in Tanjung Langsat. In 4Q13, it completed the acquisition of the entire equity interest in
White Horse Ceramic Industries (Vietnam) Co Ltd from a related company. The acquisition cost
of USD21mn comes with a total guaranteed profit of USD12mn in 4 years (2013-2016). Besides,
it has distribution offices in Singapore, Philippines, Thailand,
Indonesia, Cambodia and China.WTHORSE has a total annual manufacturing capacity of
40.65m square meters (sqm), of which 28m sqm of the capacity comes from 3 manufacturing
plants in Pasir Gudang and Tanjung Langsat, while the remaining capacity of 12.65m sqm comes
from its Vietnam plant.

SEACERA Ceramic Sdn. Bhd

The SEACERA Group of Companies is one of the pioneer companies in Malaysian ceramic
industry, starting with bricks and refractory bricks production before venturing into fully vitrified
homogenous porcelain tiles manufacturing in 1987 using European technology and
machinery.The Group continued to grow and in 1999, the holding Company, SEACERA TILES
BERHAD, was listed on Kuala Lumpur Stock Exchange (now Bursa Malaysia Securities). Since
its listing as a tiles manufacturer, the Seacera Group now includes subsidiary companies
involved in the manufacturer of Biaxially Oriented Polypropylene (BOPP) film, information
technology as well as its latest venture into property development to complement the tiles
business.

A. ECONOMIC ANALYSIS
White Horse Ceramic
In recent years, demand for tiles has gradually shifted to mid and high end tiles with larger
dimension and emphasis on tile finish design. Players such as WTHORSE which invested in the
state-of-the-art technology to produce tiles of such superiority are expected to benefit from the
change in consumer preference. It has developed the technology of producing Multi-Effect
Granite tiles of which the pattern and texture on these tiles attempt to emulate the
appearance of natural stone such as granite, marble and travertine. It is harder and more resistant
to stains, hence more durable than natural stones. Besides, another core strength of the group is
its ability to provide wide range of tiles for customer selection and it is able to produce tile with
large dimension of up to 1800mm x 600mm. The group continues to employ new technology to
enhance its research & development to rollout additional range of products with new designs and
improved quality. As high-end products yield better margin, the group will focus more on these
products such as the homogenous & glazed porcelain tiles, and multi-effect tiles, rather than the
lower-end glazed wall & floor tiles segment that has greater competition.
SEACERA Ceramic Sdn. Bhd
SEACERA product meet the highest possible standards and to keep abreast with the latest
developments. From its very humble beginning about 20 years ago with a tunnel kiln of 350
square metre per day output, today Seacera Tiles Berhad is producing about 6,000 square metre
of porcelain homogenous tiles from three production lines using machinery mainly from Italy
and Germany.Under the new innovative vision, the company is embarking on a plant upgrading
to produce more new designs and larger size tiles so as to increase our competitiveness thus
increasing our market share both locally and overseas. Presently our products consists of the
traditional salt & pepper series, soluble salt series and decorated / painted series. By mid of 2007,
we should be able to produce some of the latest products in the market using the latest multipipe, granulator and micronised powder technology

B. INDUSTRY
White Horse Ceramic
We gather that the tile manufacturing industry in Malaysia has a market size of approximately
RM1.8bn a year currently. White Horse is among the market leaders with other notable local
players include Guocera, Kim Hin, Yi Lai, MML, Johan and Seacera. It is estimated that White
Horse has 1/3 of the market share in the local tile market.Since the establishment of White
Horse, the group has completed several capacity expansions and outpaced most of the local peers
in terms of market share. This can be evidenced by the impressive 9.4% CAGR in revenue since
listing in 1999. This was attributed to its emphasis on product innovation, sales strategy, and
strategic distribution networks. Its plants in Malaysia is running at almost full capacity while the
plant in Vietnam has seen its utilization rate improved to 75% currently from 59% in FY12.
SEACERA Ceramic Sdn. Bhd
Seacera Group through SEACERA TILES BERHAD and its tiles subsidiaries have carved out a
niche producing top quality homogeneous vitrified porcelain tiles and many of its tiles can be
seen in numerous prestigious projects and buildings including the hallmark tiles for several
Banks and major institutions in Malaysia. Using European technology and machinery, it has also
built up a reputation of producing tiles of international standards comparable to the leading
European manufacturers. In 2007, Seacera will commission the latest state-of-the-art Italian
machinery capable of producing high-end technical porcelain tiles with the latest Italian
contemporary designs including porcelain granite and marble. Ceramic wall and imported floor
tiles are being added to the range of Seacera tiles and with the introduction of natural granite and
natural marble,SEACERA will become a one-stop centre for tiles.

C. FUNDAMENTAL
White Horse Ceramic
WHITE HORSE BHD is presently anticipated to have takeover price of 617.8 M with market
capitalization of 550.5 M, debt of 204.73 M, and cash on hands of 137.46 M. Please note that
takeover price may be misleading and is a subject to mistakes in financial statements. We
encourage investors to thoroughly investigate all of the WHITE HORSE fundamentals before
making investing decisions based on the enterprise value of the company.
Seacera Ceramic Sdn Bhd
SEACERA GROUP BERHAD is presently anticipated to have takeover price of 164.18 M with
market capitalization of 144.81 M, debt of 56.47 M, and cash on hands of 26.78 M. Please note
that takeover price may be misleading and is a subject to mistakes in financial statements. We
encourage investors to thoroughly investigate all of the SEACERA group fundamentals before
making investing decisions based on the enterprise value of the company.

COMMON STOCK RATIO

1. Earning per share
According to company disclosure White Horse Ceramic has Earnings Per Share of RM0.258 .
This is much higher than that of the sector, and significantly higher than that of Earnings Per
Share industry, The Earnings Per Share for all stocks is over 18.41% lower than the Seacera
Ceramic. For Seacera Ceramic EPS registered RM0.0738 times of year.
White Horse Sdn Bhd
Earning per Share = Net income available to common shareholders
No of common stock outstanding
=

Rm 59 235 000
Rm 22 940 100

RM0.258

Seacera Ceramic Sdn Bhd

Earning per Share = Net income available to common shareholders
No of common stock outstanding
=

Rm 13 423 103
Rm 181 747 779

RM0.0738

2. Price Earning Ratio

The price earnings ratio is a valuation ratio which indicates how much an investor is willing to
pay for every dollar of earnings. White Horse Ceramic P/E ratio is 7.44. A high growth company
usually has a high PE ratio as investors are expecting high earnings growth in the future. The PE
ratio is calculated as the market value per share (or stock price) divided by the earnings per share
(usually LTM EPS). Seacera Ceramic Finance PE ratio is 10.03.

White Horse Sdn Bhd

Earning Ratio = Market Price of Common Stock
Earning Per Share
=

Rm1.92
RM0.258

7.44

Seacera Ceramic Sdn Bhd

Earning Ratio = Market Price of Common Stock
Earning Per Share
=

Rm0.74
Rm0.0738

10.03

3. Dividend Per Share

During the past 12 months, White Horse Ceramic Bhd's average Dividends Per Share Growth
Rate was 5% per year..Seacera Ceramic Bhd's dividends per share for the year ended in dec 2014
was 1.33%.
White Horse Sdn Bhd
DPS = Amount of Dividend Paid on common stock
Number of common share outstanding
=

Rm 11 470 000
Rm 229 401 000

= Rm 0.0499

Seacera Ceramic Sdn Bhd

DPS = Amount of Dividend Paid on common stock
Number of common share outstanding
=

Rm 2 413 050
Rm 181 747 779

Rm0.013

4. Dividend payout ratio

During the past years, the Dividend Payout Ratio of White Horse Sdn Bhd was 5%.
The lowest was 3.83. And the median was 5.75. While for Seacera Dividend Payout ratio for the
year ended 2014 was 54.30%
White Horse Sdn Bhd
DPR = Amount of Dividend Paid on common stock
Net income available for common shareholders
=

Rm 11 469 745
Rm 229 394 900

0.05 or 5.00 %

Seacera Ceramic Sdn Bhd

DPR = Amount of Dividend Paid on common stock
Net income available for common shareholders
= Rm 5 279 811 Rm 2413 050 = Rm 2 866 761
=

Rm 2 866 761
Rm 5 279 811

0.543 or 54.30 %

5. Dividend yield (%)

It shows an unfavorable condition for Seacera Ceramic Bhd. This indicates, White Horse Sdn
Bhd have high rate of return of 2.6% compared Seacera is 1.76%. These explain that Seacera pay
out low in dividends for each year relative to its share price.
DY = Dividend Per Share x 100
Market Price per share
= Rm 0.0499 x 100
Rm1.92
=

2.60%

Seacera Ceramic Sdn Bhd

DY = Dividend Per Share x 100
Market Price per share
= Rm 0.013 x 100
Rm0.74
=

1.76%

6. Book value per share of common stock

It shows favorable condition for White Horse sdn bhd. This is because its book value is RM 2.18
higher than Seacera ceramic sdn bhd is RM 1.11. Thus, it indicates that the company level of
safety associated with each shareholder after all debts are paid is high.
=

Total common equity

No. of shares outstanding

White Horse sdn bhd

= RM 500262000
229401000
= RM 2.18

Seacera Ceramic Sdn Bhd

= RM 202316571
181747779
= RM 1.11

7. Price to book value

It shows a favorable condition for White Horse sdn bhd. White Horse is high of Rm 0.88
compared of Rm 0.67 of Seacera. This explained how much shareholders are paying for the net
assets of a company.
Market Price per share
Book value per share
White Horse sdn bhd
= RM0.74
RM 1.11
=

0.67

Seacera ceramic sdn bhd

= RM 1.92
RM 2.18
=0.88

8. Net Profit Margin

This indicates, White Horse profit margin is 47 % compared to Seacera is 30 %. This shows
White Horse amount of profit that a business can extract from its total sales. This can attract
investor to invest in the company.
Net Income after tax
Net sales
White Horse sdn bhd
= RM 59235000
RM 127300000
= 47 %

Seacera ceramic sdn bhd

= RM 17103791
RM 56503293
= 30%

9. Rate of return on equity

It shows White Horse have higher ROE of 7.3% compared Seacera has only 5.8 %. This
indicates, White Horse have high profitability of the equity fund and it reflects the firms have
strong investment opportunity.
Net income after tax Preferred shares dividends
Total common equity

White Horse sdn bhd

= RM 59235000 - 22900000
500262000
= 7.3 %

Seacera ceramic sdn bhd

= RM 17103791- RM 5279811
202316571
= 5.8 %

10. Return on investment

White Horse sdn bhds ROA is high 0.50 compared to Seacera ceramic sdn bhd is 0.49. This
indicates, the company has efficiency to manage investments in assets and using it to generate
profit.
Net Income after tax
Total Assets

White horse sdn bhd

= RM 59235000
RM 1196563000
= 0.50

Seacera ceramic sdn bhd

= RM 17103791
RM 345622039
= 0.49