1. The Battle For Value, 2004 FEDEX VS. UPS Members: Amy Wu Jack Chang
Irene Kuo
Terry Yan
Andrea Liao

2. Timeline
FedEx
UPS
Creates new hub at Roissy-Charles de Gaulle Airport in France
B2C home-delivery service
Carries U.S Postal Service packages, Acquires American Freightways Corp.
Home delivery to cover 100% of the U.S. population
Acquires Kinko’s, Establishes Chinese headquarters
1999
2000
2001
2002
2003
1999
2000
2001
2002
2003
UPS IPO
Acquires all-cargo air service in Latin America
Acquires Mail Boxes Etc. retail franchise, Begins direct flights to China
Offer guaranteed next-day home delivery
Contracts with Yangtze, Reduces domestic ground-delivery time

3. ROA
UPS IPO

4. ROE
UPS IPO

5. Summary UPS IPO in 1999, so the equity increased.
Therefore, the ROE&ROA decreased in 1999.
UPS’s performance was always better than FedEx,
but FedEx was gradually entering blissful circumstance.

6. WACC

7. EVA
UPS strike
為什麼不約而同在1997年,1998年上升?

8. MVA

9. Q1: MVA of two companies
Because UPS entered the China market in 2001, we chose history data from , we used the average of those data to predict the future.

10. Why FedEx still invest? Why we are based on MVA?
Their EVA was negative so many years.
MVA is positive  g is positive
 investment projects are prospective
Why we are based on MVA?
EVA is short-term valuation so it can’t reflect the long term return.
What’s more, transportation industry needs lots of infrastructure, of which benefit would be proved in the long term.

11. Q2:Evaluating their future performance
UPS‘s EVA & MVA was higher than the FedEx’s.
Based on all the information, UPS has better performance than FedEx.

12. FedEx‘s growth rate is higher than the UPS’s.
China is an important market.
Make the FedEx much stronger.
We think FedEx may have great performance in the future because of the higher growth rate.

13. THANK YOU
For Your Listening