| Xinhai Logistics Group Limited (which is hereinafter referred to as the Company) is going to lease an idle factory to build for the project of Logistics Park in Shijing Town, Baiyun District of Guangzhou City. The Company sets a strategy target to build an excellent logistics park that is based on Guangzhou, with a radiation across South China and affects Southeast Asia. This article describes the initial scheme of the said strategy target. The construction of Modern Logistics Park, on one hand, is consistent with the development of the national logistics planning and the policy direction to build modern logistics industry made by Guangzhou Government, on the other hand, it can expand the business scope for the Company to create new profit growth points and will be a significant way to achieve the industry upgrade of the Company from traditional logistics to modern boutique logistics.This article firstly obtains the conclusion through market analysis that external opportunities of the project construction are policy and market opportunities. There are three advantages of the project including location advantages, logistics network advantages and regional trading development advantages. And its disadvantages are reflected in the lack of management experience on the logistics park and professional human resources support. In basis of the market analysis, the Logistics Park is targeted as a high-end logistics park with high services, high standards, all-in-one logistics solutions (third party logistics) and links (function) of logistics services. And there are five aspects which make the detailed planning on the actual operation, including function planning, corporation management structure, human resources arrangement, facility purchase and workflow.The article is a comprehensive economic analysis which covers market analysis, project planning, investment analysis, risk appraisal and other parameters. And it adopts plenty of material and data from documents, fieldwork studies and expert interviews, and makes analysis and studies on the project in multiple perspectives for the purpose of providing fully evidence for investment decisions. The analysis of investment income and costs shows that the initial term of this project requires 19,564,000 Yuan RMB as the total investment start-up capital. The total cost of the first year is 15,957,700 Yuan RMB; and it will increase year by year from the second to the fifth year. The total income of the first year is 11,450,800 Yuan RMB. With the increase of rental rate for logistics shops, the total income will increase progressively from the second year to the fifth year. Using banking roan rate to 5.40% a year as the discount rate, we analyze that the static payback period requires 4.85 years, while the discounted payback period 5.32 years. NPV of this project is 7795.94 million Yuan RMB, and the IRR 31.44%, which is far higher than the deposit and loan rate. Therefore, the project is feasible. In light of the sensitivity analysis, the profits of the project get the largest sensitivity to the fixed costs and have the lower sensitivity to the variable costs, such as sales costs. We analyze that risks of the project mainly lie in legal risks, market risks, economic risks and management risks, measures of which are elaborated in the article. It is the conclusion that the income of the project is considerably profitable and risks are controllable. Therefore, the Business Proposal is feasible. |
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