Posted by thwalim > 2013-12-22 12:33 | Report Abuse

KC,thanks so much!need to trouble again, how you compute the income tax 2594,D&A 1389,Capex 3730 and also debts 3054. All my figures are wrong as compare with you.Really appreciated your reply. Thanks.

Posted by kcchongnz > 2013-12-22 15:09 | Report Abuse

thwalim,
I have said many times valuation, whatever method one uses, is an art and not a science. It just gives a guide. Everybody has different value but generally they should be approximately close to each other.

For example, what is "adjusted ebit"? I may use the average ebit margin of 3 years, 5 years etc and get the adjusted ebit for next year. Somebody may use last year's ebit to start with. Income tax, I may use the tax/Ebit rate for last year, or tax/NI. For D&A and capex, I may have again use the average over a number of years. The important thing is a net maintenance capex, ie capex less D&A. Sometimes i use D&A as 50% of average capex of last few years because this capex and D&A bounces up and down each year. Cost of capital, again it depends on the cost of debts and cost of equity you assume. Debts are total debts in the balance sheet. Cash is the excess cash, plus investment assets not consolidated into the ordinary business of the company.

So there is no right or wrong, more of if those numbers you use make sense or not. I believe if you use sensible data and assumptions, your EPV should not be very far from mine.

Revenue 2012 103246
Adjusted Ebit 17292
less income tax -2594
Net operating profit after tax 14699
Add average D&A 1389
Less average capex -3730
Normalized Ebit 12358
Cost of capital, R 9.8%
Capitalized earnings=Ad Ebit/R 125497
Add cash 24471
Other investments 0
Less debts -3054
EPV 146914
Less minority interest -17983
EPV to common shareholders 128931
Number of shares 200000
EPV/share 0.64

Posted by thwalim > 2013-12-22 22:17 | Report Abuse

KC,
Thanks a lots. I got what you mean now.Finally i got the number near to your number.Really is the art. :-)