Research Talent Training Programme: Module 2

Equities Analysis Workshop: A Practical Approach to Modelling and Valuation

Course Date: 6 and 7 July,  10am to 5pm (Saturday and Sunday) 

SkillsFuture credit can be used for this course. Please click here for more information.

With effect from 19 May 2017, SkillsFuture Singapore will revise the SkillsFuture Credit claims processes. All SkillsFuture Credit payments by SkillsFuture Singapore will be made to training providers instead of individuals.

Please submit your claim via the SkillsFuture website first if you wish to use your SkillsFuture credit.

The Research Talent Training Programme is designed to equip participants with the necessary knowledge and skill sets to evaluate companies and develop investment theses and analyses. Please click here for the programme brochure.

Overview
Financial modelling involves building a mathematical representation to forecast the performance of a financial portfolio or investment. Equity valuation is used to establish the fair market value for a security. This module takes participants beyond the basic theoretical valuation methodologies to achieve a holistic understanding of equity valuation and financial modelling.

Learning Outcomes

At the end of this module, participants will:

• Value a company or investment using a variety of tools
• Use basic financial modelling techniques in Excel
• Understand discounting concepts, cost of capital and discounted cashflow analysis
• Compare and contrast the various forecasting and analysis techniques
• Identify companies before they develop their economic moats and become market leaders
• Analyse sectors and markets that will grow in the next 10 years

Course Outline

Refresher of core concepts
A quick recap of various theoretical valuation models, and potential pitfalls associated with each method. Participants are expected to have a reasonable understanding of these concepts, hence this is a quick review session to facilitate the rest of the workshop.

• Key drivers to the stock price
• Theoretical valuation models
• Pitfalls
• Valuation: Theory vs Practice

Modelling basics
This section aims to answer the question: “How does the company make money”, and break down various drivers which propels the company towards this goal. Various considerations when modelling these key drivers will be discussed.

• Understand the business model
• Identifying key components for each financial statement
• Assessing recurring vs non-recurring items
• Understand various links

Forecasting basics and additional considerations
Details on actual business drivers and basis for a basic assessment of financial outlook for the entity in question are established in this section. Thereafter, dive deeper into additional issues for consideration with a practice session.

• Determine key drivers
• Linking key drivers to financial forecast
• Establish basis for outlook
• Fixed vs variable costs: operating leverage
• Hedging, provisions, tax deferrals
• Practice session

Valuation basics
This session covers valuation of the entity after arriving at the basic financial model and evaluates the most appropriate approach. Practical challenges when deciding on that actual valuation, such as “What discount rate should one use?” will be discussed.

• Discounted cashflow valuation models
• Considerations:
  • What discount rate to use
  • Minority interest
  • Non-core assets
  • Off balance
• Valuing cyclicals, growth stocks
• Practice session

Risk assessment
After arriving at the valuation, the discussion moves on to risk dimension and possible negative outcomes. This will be covered from a qualitative perspective and ways to quantify various risk elements will be presented.

• Establish risk dimensions
  • Company level, industry level, macro, others
• Quantifying risk using valuation models:
  • Single variable, Multivariate (Scenario-based), Event based

Valuation: Theory vs Practice (reviewed with examples)
This interactive section will take the participant through learning points that have been discussed using real-world case studies.

Trainer’s Profile
Jason Wee, CFA was Head of Research at CLSA, one of Asia’s top equities research firms, overseeing the smaller companies research coverage across 11 countries. During his 13-year stint in the stock broking industry, he was consistently ranked top three within his specialty fields, ranging across technology, banking & finance, media, conglomerates and consumer sectors.

His penultimate achievement was the award of top place for research coverage of Asia’s smaller companies by investors across all three continents (Asia, Europe, US) in the prestigious Greenwich poll in 2005. Prior to this, Jason was a management consultant with Booz Allen & Hamilton, consulting for multinationals in the steel, financial, oil & gas, information technology and consumer goods industries.

SkillsFuture Credit
With effect from January 2016, Singaporeans aged 25 years and above who received their SkillsFuture Credit account activation letter will be eligible for an initial credit of $500 which can be used to pay for course fees for a range of eligible courses. SkillsFuture credits can be used for this course.

For more information, please refer to SkillsFuture website.

IBF Financial Training Scheme
The Financial Training Scheme (“FTS”) provides funding for financial sector-specific training programmes which are recognized under FTS. This scheme is only eligible for company-sponsored participants who are Singapore Citizens or Singapore Permanent Residents, physically based in Singapore, and who have successfully completed a FTS programme. Financial Institutions (MAS licensed or exempt entities), involved in or supporting financial sector activities, are eligible to submit claims for company-sponsored participants.

For all FTS programmes commencing on or after 1 July 2016, Singapore Citizens aged 40 years old and above will be eligible for 90% co-funding of direct training costs, subject to existing grant caps of S$2,000 per programme. Singapore Permanent Residents and Singapore Citizens below 40 years old will continue to be eligible for 50% co-funding of direct training costs for FTS programmes.

For more information, please refer to IBF website.

Contact Us
For further enquiries, please email register@sgxacademy.com or call 6327-5438
(Operating Hours: 9.00am to 5.00pm)

Terms and Conditions:

Changes
Singapore Exchange reserves the right to make changes to the time, date, syllabus, speakers, venue or cancel the course if warranted by circumstances beyond its control.