case solution to yj ltd ——by rainbow girls overview prioritization and identification discussion...
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Case Solution To YJ Ltd ——By Rainbow GirlsTRANSCRIPT
Case Solution To YJ Ltd——By Rainbow Girls
Overview
Prioritization And Identification
Discussion And Recommendation
Ethical IssueConclusion
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CONTENT
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CautionInnovation Responsibility
NatureIssue
OrientationWay
Philosophy
Ltd., IPO, E&P, MNC
Internal crisisExternal impact
Unconventional energy
The hard power The soft power
Overview
Prioritization And Identification
Discussion And Recommendation
Ethical IssueConclusion
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CONTENT
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Overview
Prioritization And Identification
Discussion And Recommendation
Ethical IssueConclusion
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CONTENT
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Operating CapacityProfitabilitySolvency
Considerable liquidityShort-term solvency is stable
Financial stability
Long-term solvency is enhancement
Grow fast
A good development space
Strengthening market
Competitiveness grow faster
Growth potential
Great changes and risk shares
Issue1 License application results Analysis1. The financial indicators in 2014
Issue1 License application results Analysis2 EVA
Year 2014 2013Net operating profit after tax 64.46 51.1
The weighted average cost of capital 92.73 97.92Invested Capital 60 60
Less: Cash and bank deposits 13.6 0.2the cost of total 139.13 157.72Cost of Capital 11.63 13.19
EVA 52.83 37.91
•Strong profitability•Great development potential •Higher capital efficiency•Quality of development
3 Discussion And Recommendation
No Yes
Low cost of capital constraints Constrained capital cost : clear accountability
Inaccurate performance appraisal VS EVA bonus ： higher staff motivation
Blind expansion Strong business value drivers: high efficiency of the decision-making
Issue1 License application results Analysis3 Cash forecast in 31, March 2015
3 Discussion And Recommendation
18 2025
63
GGG EEE FFF Total
Cost：
93.8
Cash flow
Issue1 License application results Analysis3 Cash forecast in 31, March 2015
3 Discussion And Recommendation
Conclusion Other Issues Recommendation
• The worry of interests &The expectation of shareholders
• A discount to some extent when new shares release
The forecast cash flow in 2015 is not able to support the point of drilling wells.
• The crisis of confidence
• Limited amount of loan
• Improve credibility • Deal with the trust crisis • Obtain the maximum
loans
• A reasonable restriction to time
3Issue 2 Farm Out Offer
Discussion And Recommendation
•No defaults & no commercial reserves.
•The possibility of LG’s logging extends infinitely.
•LG has rights to protect their interests.
•The license application of GGG is conducted by YJ independently.
•The required 10% discount damages YJ‘s interests greatly.
DiscussRecommendation
• No need to pay to LG for the license application of GGG
• LG participates in GGG's outsourcing agenda
• Discuss the discount for LG again
3Issue 3 HSE
Discussion And Recommendation
Advantage
• Prevention and post safeguards
Disadvantage Recommendation
• Matches local conditions
• IT systems update continuously
• Imperfect ecological protection
• Innovation and management of HSE system
• Voluntary and trained
• Ability to solve big problems
• Safeguards and infrastructure
Issue 5 DT
3Issue 4 CSR
Discontinue DDD permanently.Living conveniences (transportation and education).
Recommendation
ProblemsWavering attitude towards
DDD.Negative impacts on the
local environment.
Discussion And Recommendation
Additional security personnelAccept DT’s guarantee Dispatch personnel to supervise DT closely
Recommendation
Problems
A crisis of confidence
DT’s forgery problem
The use policy of limited fossil materials was protested by the Greenbies Party, damaging YJ’s image and reputation.
3 Discussion And Recommendation
Problem
Issue6 Protest by the Greenbies Party
Recommendation
•Protect the non-renewable resources to improve its utilizations
•Sense of CSR•Charitable donations to improve the public recognition•Pay more attention and funds to the new energy’s R&D
3 Discussion And Recommendation
Issue7 YJ’s long-term future
The absence of sustainable fossil fuels
Discussion
SolutionRecommendation
Precondition• High similarity• Alternatives• Government supports• Unsaturated market
Be transformed into energy company, such as unconventional gas, tight gas, combustible ice ， etc.
• The exploration of new oil fields • Industrial transformation• The introduction of talent• Financing• Charity• Oil culture
Overview
Prioritization and Identification
Discussion and Recommendation
Ethical Issue Conclusion
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Respect the local culture and lifestyle fully
Establish the partners’ regulatory system
• The negotiation and competitive ability
• The relations with the government
Convenience fees & business bribes
Offense behavior Human rights in Africa
Overview
Prioritization and Identification
Discussion and Recommendation
Ethical Issue Conclusion
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CONTENT
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The actual situation of YJ
Current affairs of International oil
Challenges & Changes (New energy company)
THANKS
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