治理结构与公司价值——美国与东亚若干经验比较

5CFAII_SS18: Options
How to value a firm
• The value of a firm with a constant grow rate is
where NOPLAT = net operating profit less adjusted taxes EBIT = earnings before interest and taxes t = average tax rate WACC = weighed average cost of capital g = growth rate = reinvestment rate × ROIC ROIC = return on new invested capital = NOPLAT/IC g/ROIC = reinvestment rate = rI
4CFAII_SS18: Options
Value creation via financial strategies
Shห้องสมุดไป่ตู้reholder value
Why value value?
Restructuring (Strategy)
Dividend policy: Reinvestment
Value creation ROIC > WACC Strategies to create value •Internal growth
7CFAII_SS18: Options
Value Drivers
• Three value drivers: ▪ Abnormal profit (invest only when ROIC > WACC): in the right industry ▪ Growth (g) or reinvestment: in the high growth industry ▪ Risk (WACC): (1) economy-wide risk (business cycle), (2) operating risk (degree of capital intensity), and (3) financing risk (leverage)
Valuation methods •DCF •Comparative measure •ROA
Debt
•Timing •Cost of capital (WACC) •Financial engineering
•Investor behavior •Greed and fear •Cognitive or heuristic bias
Corporate governance: Asymmetric information
•Management discipline •Transparency •Independence •Accountability •Responsibility •Fairness •Social responsibility
• Common mistake: Managers often ignore the cost of “equity” capital
8CFAII_SS18: Options
Sources of abnormal profit
• Monopoly (High profit margin): Microsoft or eBay (price or service differential; in the right industry)
• On the consultancy activities, Prof. Wei has helped Hang Seng Bank to develop a personal financial planning model called “SmartInvest,” and HSBC to develop a financial planning model, called “Rule-Based Investment Solutions.” He also conducted a consultancy project initiated by HKSAR for APEC and a few projects for Hong Kong Stock Exchange.
治理结构与公司价值——美 国与东亚若干经验比较
2CFAII_SS18: Options
Profile of Prof. K.C. John Wei
• Prof. K.C. John Wei received his PhD in Finance at the University of Illinois, Champaign-Urbana, in 1984. He served the University of Mississippi as an Assistant Professor from January 1984 to June 1988. After serving the University of Miami as an Assistant Professor for one year, he moved to Indiana University, where he served as an Associated Professor from July 1989 to June 1992.
• Example: Profit margin = 20%; WACC = 15%; Capital turnover = 2 times ▪ For every $100 sales, profit = $20, required capital investment = $50, cost of capital = $50*15% = $7.50, abnormal profit = $20 – $7.5 = $12.5. ▪ At what level of profit margin, will the firm become a mature company?
• Low cost operator: Hon Hai Precision, Taiwan Semiconductor, Dell, BYD (make money from good management)
• Low financing cost: GE
• Barrier to entry: (1) capital, (2) technology (patents), (3) distribution channels, (4) government protection
• Since July 1992, Prof. John Wei has been serving the HKUST Business School initially as an Associate Professor and later was promoted to full Professor. He served as Acting Head of the Department of Finance from January 2001 – August 2002 and February – June 2003. Prof. Wei has also been appointed the Director of the Centre for Asian Financial Markets since 1995. He was visiting University of Texas at Austin from September to December 2002 and is currently visiting Guanghau School of Management, Peking University.
6CFAII_SS18: Options
How to enhance the value of a firm
• The MM formula
• How to enhance the value of a firm ▪ Increase operating efficiency (NOPLAT) ▪ Increase return on new invested capital (ROIC) ▪ Invest in new project only when ROIC > WACC ▪ Increase the growth (g), rI = g/ROIC ▪ Prolong the period of competitive advantage (N) ▪ Reduce the cost of capital (WACC)
Investment decision: Growth options
Approaches to valuation
•DCF (NPV) valuation •Comparable valuation •ROA
Financing decision: WACC
Mergers & Acquisitions What is your dream company? •Focus vs diversified •Core competence
Xiushen
Qijia
Zhiguo
Capital markets
•Central bank •Commercial banks •Investment banks •Mutual funds •Insurance companies
Capital Equity CB
Investors
Growth opportunity Objective/Strategy
3CFAII_SS18: Options
Value creation and business strategies
CEO
•Management skills •Vision •Integrity
Management team •Corporate governance •Incentives
Assets in place •Restructuring •Competitive advantages
• Prof. Wei have been involved executive teaching for HKUST, Peking University, Hong Kong Stock Exchange, Chinese provincial government officials, general corporate executives, Xiean Jassen, Daimler/Chrysler, China Mobile, Aspire, and BenQ.
•M&A (external) •Focus vs Diversified
•Investment (internal) (Cisco vs GE)
(ROIC>WACC) •OEM vs Brand
•R&D
•Low vs high end
Pingtianxia
Valuation Creation
People
• With research focuses on empirical research in capital markets, derivatives and asset pricing of Asian and U.S. markets, Prof. Wei has produced a number of high quality papers on these areas. Many of these papers were published in top journals in finance and have made considerable contributions to the finance literature. He is an author of four books (in Chinese) on Hong Kong stock and warrants markets and Taiwanese stock market. In addition, Prof. Wei is a regular column writer for the Hong Kong Economic Journal, a local newspaper specialised in financial news.