Макроекономија Економске анализе, Србија, окружење, и међународна економија
Relative Valuation – Sojaprotein AD Becej
Two alternative approaches are generally used in estimating equity value: fundamental valuation and relative valuation. Fundamental valuation involves discounting expected values of fundamentals such as free cash flow, dividends or residual income while relative valuation specifeies the value of the firm as function of selected fundamentals and their average pricing for peer companies.
Relative valuation is typically implemented with price multiples, that is, by multiplying a firm’s fundamental by the average price-to-fundamental ratio for a group of similar companies (same industry, size, leverage, etc). The average multiple is calculated using location measures such as the mean, median or harmonic mean, and often reflects discretionary adjustments made to account for differences in relevant value drivers (e.g., growth, risk, payout, earnings quality) across the companies. Another relative valuation approach which is less common is to use conditional price multiples (hereafter conditional valuation). This approach explicitly adjusts observed multiples (e.g., the price-to-book ratio) for difference in relevant value drivers (e.g., return on equity or ROE). In effect conditional valuation is the multivariate counterpart of price multiple valuation – it is based on the same rational as price multiples but uses severel fundamentals simultaneously.
P/B ratio (conditional and median)
| Comparable firm | ROE – X | P/B ratio – Y |
| KRBL LTD KRB:IN | 0,1203 | 0,78 |
| Kaveria Seed Company Limited KSCL:IN | 0,2407 | 4,08 |
| Halwani Bros Co HB:AB | 0,1497 | 1,89 |
| AgroGeneration SA ALAGR:FP | 0,1014 | 2,57 |
| Imlek a.d., Beograd, IMLK | 0,1907 | 2,05 |
| Guangdong Jialong Food Co., LTD 002495:CH | 0,0551 | 1,77 |
| BrasilAgro AGRO3:BZ | 0,0552 | 0,85 |
| Ros Agro PLC AGRO:LI | 0,0872 | 0,18 |
| Origin Enterprises plc OIZ:GR | 0,2103 | 2,22 |
| b0 | 0,232375473 | Median- 1,89 |
| b1 | 11,81614508 | |
| y=b0+bixi | 1,338687229 | |
| Correlation | 0,694376451 | |
| Coefficient of determination | 0,482158656 | |
| Indicative value of equity in RSD | 17,406,755,926 | 24,590,197,088 |
| Indicative share price in RSD | 1,169,00 | 1,651,00 |
| Current share price in RSD | 490,00 | 490,00 |
| Current ROE | 0,09 | 0,09 |
| Current P/B ratio | 0,56 | 0,56 |
| Estimated P/B ratio | 1,34 | 1,89 |
Note: The data used in the analysis of comparables firms are taken from www.bloomberg.com. Date for the company analyzed were taken from www.belex.rs
Share price on day 1/6/2012
In January 2011 in emerging markets for a sample of 266 companies from the agricultural sector average P/B ratio stood at 1,57 and ROE 18,67%, at the time in Europe for a sample of 32 companies P/B ratio was 1,11 and ROE 15,13%. Source: Cap IQ & Bloomberg.
P/S ratio (conditional and median)
| Comparable firm | Net margin – X | P/S ratio – Y |
| KRBL LTD KRB:IN | 0,0448 | 0,29 |
| Kaveria Seed Company Limited KSCL:IN | 0,1560 | 2,64 |
| Halwani Bros Co HB:AB | 0,0990 | 1,25 |
| AgroGeneration SA ALAGR:FP | 0,1007 | 2,55 |
| Imlek a.d., Beograd, IMLK | 0,0769 | 0,83 |
| Guangdong Jialong Food Co., LTD 002495:CH | 0,2060 | 6,63 |
| BrasilAgro AGRO3:BZ | 0,2676 | 4,14 |
| Ros Agro PLC AGRO:LI | 0,0554 | 0,10 |
| Origin Enterprises plc OIZ:GR | 0,0364 | 0,38 |
| b0 | -0,659956641 | Median – 1,25 |
| b1 | 23,74184064 | |
| y=b0+bixi | 1,299016167 | |
| Correlation | 0,86280938 | |
| Coefficient of determination | 0,744440026 | |
| Indicative value of equity in RSD | 19,166,418,466 | 18,443,967,879 |
| Indicative share price in RSD | 1,286,00 | 1,238,00 |
| Current share price in RSD | 490,00 | 490,00 |
| Current net margin | 0,08 | 0,08 |
| Current P/S ratio | 0,49 | 0,49 |
| Estimated P/S ratio | 1,30 | 1,25 |
Note: The data used in the analysis of comparables firms are taken from www.bloomberg.com. Date for the company analyzed were taken from www.belex.rs
Share price on day 1/6/2012
In January 2011 in emerging markets for a sample of 266 companies from the agricultural sector average P/S ratio stood at 0,93 and net margin 8,59%, at the time in Europe for a sample of 32 companies P/S ratio was 1,11 and net margin 6,27%. Source: Cap IQ & Bloomberg.
P/E ratio (conditional and median)
| Comparable firm | Debt to equity – x1 | Expected Growth Rate -x2 | P/E ratio – Y |
| KRBL LTD KRB:IN | 2,023 | 0,11 | 6,49 |
| Kaveria Seed Company Limited KSCL:IN | 1,438 | 0,22 | 16,94 |
| Halwani Bros Co HB:AB | 0,281 | 0,07 | 12,63 |
| AgroGeneration SA ALAGR:FP | 1,287 | 0,10 | 25,34 |
| Imlek a.d., Beograd, IMLK | 0,943 | 0,12 | 10,76 |
| Guangdong Jialong Food Co., LTD 002495:CH | 0,033 | 0,04 | 32,17 |
| BrasilAgro AGRO3:BZ | 0,537 | 0,06 | 15,48 |
| Ros Agro PLC AGRO:LI | 1,304 | 0,09 | 1,97 |
| Origin Enterprises plc OIZ:GR | 2,577 | 0,16 | 10,54 |
| b0 | 8,038827086 | Medijana – 12.63 | |
| b1 | 1,134969567 | ||
| b2 | 50,71921623 | ||
| y=b0+b1x1+b2x2 | 13,36 | ||
| Indicative value of equity in RSD | 16,262,549,683 | 15,377,895,462 | |
| Indicative share price in RSD | 1,091,00 | 1,032,00 | |
| Current share price in RSD | 490,00 | 490,00 | |
| Current P/E ratio | 6,00 | 6,00 | |
| Estimated P/B ratio | 13,36 | 12,63 |
Note: The data used in the analysis of comparables firms are taken from www.bloomberg.com. Date for the company analyzed were taken from www.belex.rs
Share price on day 1/6/2012
In January 2011 in emerging markets for a sample of 266 companies from the agricultural sector average P/E ratio stood at 33,96, at the time in Europe for a sample of 32 companies P/E ratio was 20,67. Source: Cap IQ & Bloomberg.
Expected Growth rate = (1 – payout ratio) x ROE