Date of Analysis: Financial Year: SIME DARBY BHD Board: Main Board SIME FBMKLCI: TRUE SIME:MK Reuters: SIME.KL TRADING SERVICES OIL PALM/RUBBER AND OTH CROP PRODUCTION PLANTATION; PROP; MOTORS; INDUSTRIAL; ENERGY & UTILITIES. 19-Sep-12 2011 30/6/2011 Price: 9.79 Stock Grade: Emerging Investment Grade Profitability Profitability 10 ROI 8 ROI Liquidity 6 Efficiency 4 Risks 2 0 Potential Growth Buy & Hold Returns Potential Growth 65 75 90 50 105 105 Buy & Hold Returns 25 Liquidity 51.80759
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it had reached 845million monthly active users in 2011. This phenomenal led to one of the biggest initial public offerings (IPO) the market had seen in recent years‚ with total capital raised to be valued at $16B‚ given the $38 per share offering price. Facebook was valued at around $96.6B in total. Prior to the IPO‚ the market perceived the valuation with positive approval signaled by both Facebook’s private market share auctions and analyst’s reviews. However‚ as it will be examined below‚ Facebook
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Comparables Transaction Comparables Sum-of-the-Parts Valuation Discounted Cash Flow Analysis (DCF) $ 2 Why is Valuation important? Acquisitions: How much should we pay for the company? Divestitures: How much should we sell our company for? Sell-side Research: Should our clients buy‚ sell or hold a given stock (fixed income security‚ option etc.‚)? Valuation Initial Public Offering (IPO): Hostile defense: How much is the company worth? (price per share ) Is our company undervalued/vulnerable to a
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incremental cash flows differ from total project cash flows? What is the difference between foreign project cash flows and parent cash flows? How does APV analysis differ from NPV analysis? How is the capital budgeting analysis adjusted for the additional economic and political risks? What is real option analysis? Complexities of Capital Budgeting for a Foreign Project Several factors make budgeting for a foreign project more complex Parent cash flows must be distinguished
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Performance 4.1 4.2 Advanta India Limited Geographical Revenue Segmentation‚ FY’2011 and FY’2012 4.3 5. Valuation Analysis and Financial Summary DCF (Discounted Cash Flow) Valuationa and Upside Potential Advanta India Limited Annotated Stock Chart and Analyst Recommendations 5.1. Advanta India Limited Annotated Stock Price Performance 5.2. Analyst Recommendations Expected Bullish Stock Performance Buy Recommendation in Long term Expectation of Earning Growth 6. SWOT
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∑(Expected CFt)/(1+r)t – Investment * Perpetuity – pays a fixed amount C per period forever * P(C‚r) = C/r requires cash flow to begin NEXT period. If begin now‚ then PV = C + C/r * Annuity – fixed stream of cash flows that has a final period t * A(C‚r‚t) = C/r [1-1/(1+r)t] * Growing Perpetuity – G(C‚r‚g) = C/(r-g) C is initial cash flow‚ r is discount rate‚ g is growth rate * P/E = 1/(r-g) * High P-E multiple means the firm has good growth opportunities (high
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investment: 1) ‘Discounting’ Methods: Net Present Value (NPV): the present value of the future after-tax cash flow minus the investment outlay made initially. The decision rule for the NPV as follows: invest if NPV> 0‚ do not invest if NPV< 0 Internal Rate of Return (IRR): calculates the interest rate that equates the present value of the future after-tax cash flows equal that investment outlay; then compared to the required rate of return‚ or hurdle rate‚ to determine the viability
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GAINESBORO MACHINE TOOLS CORPORATION Overview In mid September 2005‚ Ashley Swenson‚ the chief financial officer of this large CAD/CAM equipment manufacturer must decide whether to pay out dividends to the firm¡¦s shareholders or repurchase stock. If Swenson chooses to pay out dividends‚ she must also decide on the magnitude of the payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook
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Market Price of Target’s Debt Valuation models are used in investment decisions whether it is a decision on which assets are under or overvalued. When in an efficient market‚ the market price is the best estimate of value. The purpose of the Discounted Cash Flow valuation model is the justification of the value. In the discounted cash flow valuation‚ the value of an asset is the present value of the expected cash flows on the asset. The information needed to use the discount cash flow valuation
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Market analyst have already speculated on the possible acquisition‚ causing Radio One’s stock price to rise from the mid-$40s to $97 a share! The trading multiple is at around 30x’s the forward BCF‚ which is substantially larger than the typical trading multiple for radio companies. If the acquisition of the 12 stations does not go through‚ there may be a negative reaction from the market‚ causing share prices to drop significantly. We have reviewed the power ratios‚ which indicate how much of the total
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