Valuation

Business and share valuation

Many valuation advisory firms fail to sufficiently consider the subject business’s competitive advantages, risks and growth prospect when applying the selected valuation methodologies. It is often impossible to establish an association between the subject business’s state and the value derived. Instead, valuation analysis is generalised by following a set of procedures and numerical application of valuation methodologies. We consider such insufficiency does not provide reliable results and could lead to sub-optimal and costly decisions.

We strongly believe each business is unique. A firm-specific detailed investigation on a business’s operation and financial is necessary to reliably derive a business’s value that is justifiable. We have one guiding principle in preparing our deliverables, which is, users can confidently accept our valuation results by going through the fact-driven and structured augmentation and, in depth analytical discussions presented in our deliverables.

We provide business and share valuation for transaction, financial reporting and strategic planning purposes. We have performed valuation of businesses involved in the following industries:

n Agricultural and food

n Automobile and transportation

n Aviation and airport

n Banking and finance

n Biotechnology

n Consumer electronics

n Electricity

n Green energy

n Hospitality

n IT and technology

n Oil and gas

n Pharmaceutical and healthcare

n Port and logistic

n Retail

n Telecommunication

Intangible asset valuation

Intangible assets are a key value component to most companies nowadays. Despite that, intangible assets are normally not shown in a company’s balance sheet. This is because intangible assets are often internally created or developed. For many companies, intangible assets often determine the strength and endurance of their competitive advantages and growth capacity. Without a proper understanding of what a company’s intangible assets are may lead to at least two value destruction consequences:

     Shareholders or investors may not be able to accurately assess the true value of their investment and the associated risks leading to sub-optimal investment decisions; and

      Management may miss the opportunity to grow the company at a higher rate (and more effectively) by leveraging a company’s intangible assets in its expansion/growth strategy. Moreover, intangible assets can be used as a defensive tool against competition

Valuation of intangible assets is generally less understood among the advisory community. When performing an intangible assets valuation, many simply apply the methodologies used for business and share valuation without taking into consideration the unique nature of intangible assets: 1) they do not exist in a vacuum. Their worth relies on the contribution made by tangible assets (such as land and equipment) and; 2) they are riskier than the overall business. Perform an intangible asset valuation in a proper manner is complex and technically demanding. We have extensive experience and capability in valuing intangible assets including:

n Brand

n Trademark and trade name

n Patent and technology

n Customer relationships

n Distribution rights

n Research and development

n Copy right

n Mining rights

n Software

Please refer to ‘Publications’ section for explanatory notes of intangible asset valuation in compliance with the relevant accounting standards.

Bonds and Financial derivatives valuation

Financial derivatives are becoming increasingly complex and modelling demanding. The recent financial crisis has led to increased scrutiny on the reliability of derivative valuation. We have experience and capability in performing valuation of the following financial derivatives:

n Convertible bonds/notes

n Employee share options

n Futures and forwards

n Preferred/preference shares

n Restricted shares