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F rom Machine to System Gainesboro

F rom Machine to System Gainesboro. 廖庭鋒 段涵菁 張軒愷 梁輝政 樂野鷹輝 黃偉濤. History. What decisions to make?. Decision Stock dividends rule Share repurchase Image advertising. Decision Rules. Gainesboro’s goal and strategies. Goal 15% annual growth. Strategies.

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F rom Machine to System Gainesboro

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  1. FromMachinetoSystemGainesboro 廖庭鋒段涵菁 張軒愷梁輝政 樂野鷹輝黃偉濤

  2. History

  3. What decisions to make? Decision Stock dividends rule Share repurchase Image advertising Decision Rules

  4. Gainesboro’s goal and strategies Goal 15% annual growth Strategies The mix of production shift from machines to CAD/CAM (up to 75%) Expend internationally and obtain half of its sales and profits by 2011 Expend through joint ventures and M&A of small companies, which provide half of new products through 2011

  5. Other factors may affect decision Make shareholders happy Competitors and cyclicality of CAD/CAM Not higher than D/E ratio 40% Pessimism about CAD/CAM environment New launched promising products Maintain reasonable P/E ratio Dividends commitment

  6. Analysisofthefactors-1 Threestrategiesandthegoal M&Aandglobal expansion Pessimism about economic and CAD/CAM Competition Cash Need

  7. Analysisofthefactors-2 Founders’ families Employees Growth oriented Long-term investment TOTAL 62% In 2004 Most of investors are interested in making company grows

  8. Analysisofthefactors-3 1.67% growth from 2005~2006 Growth Stage In this stage, the revenue is still unstable and the growth in sales depends on add-ins and R&D 90 million 150 million

  9. Analysisofthefactors-4 D E Dividends higher D/E ratio, and in 2005, the projected D/E ratio is reaching the limit, 40%

  10. Analysisofthefactors-5 2003 2001 2000 1999 1998 88.2 1997 1996 1995 1994 1993 57.0 9.0

  11. Making decision

  12. Evidences support deliver lower dividends, while conveying corporate image is the way to reduce risk. To close up the gap between company and investors is the KEY Low dividends and imaging advertising approved!

  13. What repurchasing shares brings? long-term Short-term Tax shield Credibility Crisis Share price rockets Signaling sluggish situation Rewarding investors

  14. Making decision - repurchasing Disapproved! Doesn’t help much coping with current challenges Risk of reaching liability limit

  15. Zero Dividends/ Residual Payout Decision Image Advertising Do not Repurchase

  16. This is the end.thank You!

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