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NUS Invest nusinvest

Writing Equity Report. 11 February 2016. Introduction to Equity Report Writing. DISCLAIMER AND DISCLOSURES. NUS Invest nusinvest.com. Ong Zi Hao | Yu Chen FA Department. Please read the disclaimer and the disclosures which can be found within this. report. Writing Equity Report.

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NUS Invest nusinvest

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  1. Writing Equity Report 11 February 2016 Introduction to Equity Report Writing DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  2. Writing Equity Report 11 February 2016 Why Write Equity Report? 1. Understand WHY you buy a stock DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  3. Writing Equity Report 11 February 2016 Why Write Equity Report? 2. Impress Interviewers DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  4. 3. Spoil bell curve in FIN2004

  5. Writing Equity Report 11 February 2016 Why Write Equity Report? I. Understand why you buy II. Impress Interviewers III. A+ for FIN mods DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  6. Writing Equity Report 11 February 2016 How to write equity report? 1. Research 2. Basic information 3. Essentials of Equity Report 3.1 Company Overview 3.2 Industry Overview 3.3 Investment Thesis & Valuation 3.4 Investment Risks DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  7. Writing Equity Report 11 February 2016 How to write equity report? 1. Research Sources of Information 1. Company Website 2. Competitors’ Websites 3. Analysts’ Reports 4. Regulatory Bodies 5. Bloomberg/Reuters DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  8. Writing Equity Report 11 February 2016 How to write equity report? Where to find Bloomberg Terminals in NUS? Contact Us Centre for Asset Management Research & Investments (CAMRI) NUS Business School 15 Kent Ridge Drive Level 3, Mochtar Riady Building Singapore 119245 Tel: (65) 6516 4165 or (65) 6601 1047 Fax: (65) 6778 0390 Email: camri@nus.edu.sg DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  9. 2. Basic information 1. Company’s Name & Ticker 2. Current Trading Price 3. Market Capitalization 4. Recommended Price 5. Recommended action 6. Liquidity 7. Key Financials 8. Key Management Members

  10. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Report 3.1 Company Overview DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  11. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Report 3.1 Company Overview Business Nature Company’s product & Services DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  12. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Report 3.2 Industry Overview Macro environment SWOT STEEP DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  13. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Report 3.2 Industry Overview Micro environment High Competition within Industry Oligopolistic • High Threat of new entrants Low technological requirement • DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  14. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Report 3.2 Industry Overview Micro environment Low Threat of substitutes Gloves is just glove • High Bargaining Power of Buyers Many competitors to choose from • Low Bargaining Power of Suppliers Many Suppliers in the nearby region • DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  15. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Rep ort 3.3 Investment Thesis &Valuation DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  16. Writing Equity Report 11 February 2016 Investment Thesis 1. What is my opinion of this stoc k? 3 reasons why I want to buy/s ell (key drivers) DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  17. Writing Equity Report 11 February 2016 Investment Thesis Key Drivers Internal External - Expansion Plans (new factory, new products) Acquisitions New customer contracts Improving operational efficienc y - - Consumer buying patterns - Macroeconomic factors - Legislative / regulatory changes End market trends - - - DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  18. Writing Equity Report 11 February 2016 Investment Thesis Example Riverstone Holdings Ltd 1. (internal) Expansion Plans: d ouble factory production capaci ty II. (external) Depreciating MYR favo urs rubber gloves exports III. (internal & external) near zero de bt; immune to interest rate increase DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  19. Writing Equity Report 11 February 2016 Investment Thesis 1. What is my opinion of this stoc k? 3 reasons why I want to buy/s ell (key drivers) DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  20. Writing Equity Report 11 February 2016 Investment Thesis & Valuation II. Why is the market wrong? Intrinsic value vs market price DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  21. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Valuation Method s Relative Absolute Trading Comps - P/E - EV/EBITDA Discounted Cas hflow At least 2 method s! DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  22. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Valuation Method s Relative Absolute Trading Comps - P/E - EV/EBITDA Discounted Cas hflow CURRENT MARKET CONDITIONS FUTURE DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  23. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Valuation Method s Relative Absolute Trading Comps - P/E - EV/EBITDA Discounted Cas hflow Football Field Chart DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  24. Writing Equity Report 11 February 2016 Investment Thesis & Valuation DCF Output DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  25. Writing Equity Report 11 February 2016 Investment Thesis & Valuation DCF Output Range: $1.10- 1. 40 DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  26. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Valuation Method s Relative Absolute Trading Comps - P/E - EV/EBITDA Discounted Cas hflow Football Field Chart DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  27. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Trading Comp s - P/E - EV/EBITDA DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  28. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Trading Comp s - P/E: $1.06 – 2.40 - EV/EBITDA: $1.06 – 2.19 DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  29. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Valuation Method s Relative Absolute - P/E: $1.06 – 2.40 - EV/EBITDA: $1.06 – 2.19 DCF: $1.10- 1.40 Football Field Chart DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  30. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Football Field Cha rt Range: $1.06 - $1. 40 DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  31. Writing Equity Report 11 February 2016 Investment Thesis & Valuation II. Why is the market wrong? Intrinsic value vs market price Range: $1.06 - $1. 40 Market Price: $1.0 6 BUY or HOLD? DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  32. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Football Field Cha rt Range: $1.06 - $1. 40 DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  33. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Personal Opinion BUY DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  34. Writing Equity Report 11 February 2016 Investment Thesis 1. What is my opinion of this stoc k? 3 reasons why I want to buy/s ell (key drivers) II. Why is the market wrong? Intrinsic value vs market price DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  35. Writing Equity Report 11 February 2016 Investment Thesis & Valuation 1. (internal) Expansion Plans: dou ble factory production capacity II. (external) Depreciating MYR favo urs rubber gloves exports III. (internal & external) near zero de bt; immune to interest rate increase DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  36. Writing Equity Report 11 February 2016 Investment Thesis & Valuation Range: $1.06 - $1. 40 Market Price: $1.0 6 Personal Opinion BUY DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  37. Writing Equity Report 11 February 2016 How to write equity report? 3. Essentials of Equity Rep ort 3.4 Investment Risks DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  38. Writing Equity Report 11 February 2016 Investment Risks Address negative industry and company develop ments that could pose a risk to investment thesis DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  39. Writing Equity Report 11 February 2016 Investment Risks Types Operational Financial Regulatory Macroeconomics Auditor’s Opinion DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  40. Writing Equity Report 11 February 2016 Investment Risks Example Types Macroeconomics – Commodity price fluctuation ( oil inputs for nitrile gloves) Regulatory – higher cost of running business in Mal aysia; VAT and wages DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  41. Writing Equity Report 11 February 2016 How to write equity report? 1. Research 2. Basic information 3. Essentials of Equity Report 3.1 Company Overview 3.2 Industry Overview 3.3 Investment Thesis & Valuation 3.4 Investment Risks DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  42. Writing Equity Report 11 February 2016 Conclusion Objective: Overview Want to learn how to do? Join F A! Contact: zihao@u.nus.edu wuyuchen@u.nus.edu DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

  43. Introduction to FA 11thFebruary 2016 Upcoming Workshops DISCLAIMER AND DISCLOSURES NUS Invest nusinvest.com Ong Zi Hao | Yu Chen FA Department Please read the disclaimer and the disclosures which can be found within this report

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