HONG KONG,May 30,2024 -- Valtech Valuation has established a solid track record in helping clients in alignment with the Securities and Futures Commission (SFC) and The Stock Exchange of Hong Kong Limited (HKEx) requirements for more transparent,fair,and reasonable disclosures on the basis of consideration and business valuations in material acquisition and disposal transactions. The firm provides independent valuation research and support tailored for valuation disclosures to fulfill regulatory requirements. Since the issuance of the guidance letter by HKEx to listed companies in Hong Kong in the fourth quarter of 2023,Valtech Valtech has offered valuation support for listed companies in sectors including energy,energy distribution,virtual assets,healthcare,property investment,and construction. All the announcements or circulars of them have been successfully published.
Both the SFC and HKEx emphasize the importance of valuation disclosures. Regardless of whether an external valuer is appointed,the technical focus remains on valuation approaches,methods,key inputs,and assumptions. In Hong Kong,the International Valuation Standards (IVS) are predominantly referred to for providing valuation opinions and necessary information that should be presented or disclosed in valuation reports. While IVS offers comprehensive guidance on valuation bases,methodologies,and reporting,Valtech Valuation goes a step further by preparing disclosures that reflect the key points mentioned in the HKEx's guidance letter.
Valtech Valuation believes the core principle is to provide relevant,meaningful,and fair disclosures that clearly explain the key factors—especially method selection,quantitative factors,and major assumptions—considered in arriving at the valuation conclusion. By upholding this core principle,Valtech believe the valuation disclosure should align with HKEx's requirements.
To prepare a good valuation with necessary disclosures,valuer must gain a thorough understanding of the business model,market,and development plan of the target company. Understanding the business is essential; however,performing a comprehensive financial analysis of the financial statements is equally important. A solid understanding of financial standards,such as those introduced in Module A of the Qualification Programme (QP) offered by the HKICPA or equivalent,is necessary. After gaining enough understanding in the target company,valuer need to build a financial model for valuation. Knowledge from the CFA programme by the CFA Institute or Module B of the QP,combined with a solid understanding of financial markets,is required to perform the necessary financial analysis and valuation modeling. Finally,experience of valuer is very crucial to consider case specific factors and make judgments properly.
While listed companies' in-house corporate finance teams can handle the foundational work mentioned above,appointing Valtech Valuation can add further value in evaluating the valuation complexities that often arise in acquisition or disposal transactions. Common complexities include niche business models,projects in new economy,related party transactions,confirmation on exhaustive comparison,the location and markets of comparable companies,detailed assumptions in discounted cash flow modeling,options,contingent payments etc. Independent valuation provides a valuable overall assessment through an objective appraisal process.
About Valtech Valuation
Valtech originated as a professional service from Asia,blending the distinct philosophies and strengths of Hong Kong and Singapore to deliver international-caliber projects with dedication. Learn more about Valtech Valuation by visiting their global application at https://valuation.vip
Valtech provides valuation services for cross-border transactions in almost every industry (including investment projects financed by the World Bank). Valtech's qualified team comprises members with PhD,CPA,CFA,Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors,and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore.
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