Crafting an Equity Valuation Report: Step-by-Step Learning from Scratch скачать в хорошем качестве

Crafting an Equity Valuation Report: Step-by-Step Learning from Scratch

The session featured Asif Khan, CFA, a seasoned equity research and asset management professional and co-founder of Edge Asset Management Company. Asif shared insights from his experience in both sell-side and buy-side research, explaining their distinct roles, communication formats, and value propositions. Equity Valuation Frameworks Valuation Approaches: Asif outlined three core methods— 1. Absolute valuation (e.g., DCF, DDM, residual income), 2. Relative valuation (peer multiples, sector comparisons), and 3. Asset-based valuation (market value of balance sheet assets). Supporting Data: He stressed the importance of robust assumptions, revenue growth, profitability, and industry context. Accuracy in Comparisons: Analysts must benchmark companies within the same sector and life-cycle stage to avoid misleading conclusions. Growth Models: For Bangladesh, a 7–8% terminal growth rate was considered appropriate, with three-stage models applied for most firms. Advanced Valuation Topics 1. Discounted Cash Flow (DCF): Covered free cash flow to firm, free cash flow to equity, and cost of capital components. 2. Highlighted the importance of normalizing debt-to-equity ratios. 3. Sum-of-the-Parts Valuation: Recommended for conglomerates like Unilever or ACI with diverse business segments. Startups: Traditional DDM and top-down approaches are limited; bottom-up models focusing on customer acquisition costs and conversion rates provide more realistic estimates, despite high uncertainty. Equity Research & Reporting 1. Report Structures: Company initiation reports should include company overview, financials, valuation, risks, and peer comparisons. 2. Types of Reports: Sector initiations, earnings updates, and generic company updates. Global Examples: Referenced Deutsche Bank and JP Morgan report formats. Pitching Strategies: Analysts must be able to articulate a concise elevator pitch for each stock, highlighting key investment drivers and identifying variant perceptions (market mispricing opportunities). Insights on Market & Career Industry Dynamics: Emphasized sector maturity, growth potential, and reliable data sourcing in Bangladesh’s market. Stock Drivers: Capital allocation, governance, and reporting quality influence valuations and investment decisions. Analyst Career Path: Equity research offers wide opportunities, with roles spanning valuation, industry analysis, and investment pitching.