Vitasoy Peer Comparison

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Date Submitted: 09/05/2016 04:25 AM

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Peer Comparison

In this section, we pit Vitasoy against its competitors--Yeo Hiap Seng Co. Ltd. and Inner Mongolia Yili Industrial Group Co. Ltd., and analyze its relative appeal to investors.

Yeo Hiap Seng is Singapore’s largest and most remarkable manufacturing company for soymilk. It has expanded market to over 50 countries and product lines in China and Malaysia. In this year it is going to establish a joint venture with China Huiyuan Juice to manufacture juice in Malaysia.

Yili is China’s leading manufacturing company for milk, and it is the biggest in Asia and the 8th biggest in the world. In recent years it has expanded the product range to soymilk, which also has a remarkable sales in China.

Vitasoy, Yeo’s and Yili were all founded in early 20th century. As for employees and sales, Yili is the leading company of the three, followed by Vitasoy. As for market value, Vitasoy ranks the last and shows big potential for development.

Liquidity Comparison

Vitasoy has an approximately average current ratio figure that is in between its peers, which indicates that its liquidity is moderate compared to its peers. While it is not as liquid as compared to Yeo’s, it still has better liquidity than Yili. However, its quick ratio is below the industry’s standard and it needs to decrease inventory to avoid larger probability of running into short-term cash flow problems.

Degree of Financial Leverage

Compared to its peers, Vitasoy’s Total Debt Ratio and Debt to Equity Ratio is around the average. Although it is higher than Yeo’s, it’s much lower than Yili, and it has a decreasing trend. It is related to its expansion of production base in China in 2011.

However, Vitasoy’s Long-term Debt to Equity Ratio is much higher than its peers before 2014. But the gap has decreased in recent 2 years, which indicates that Vitasoy has realized this problem and took measures for solution.

To summarize, Vitasoy is moderately leveraged and has a lower debt-risk in the near future....