Define the valuation perimeter
Map the Hong Kong entity, Mainland and overseas subsidiaries, branches, variable-interest or contractual arrangements, joint ventures and intercompany balances. Confirm which legal interests and cash flows are included.
Currency and cash-flow consistency
Forecast currency, functional currency, reporting currency and discount rate should be internally consistent. Exchange-rate assumptions, inflation and country risk should not be double counted.
Accounting records and reconciliation
Local statutory accounts, group reporting packs and management accounts may use different policies, periods or classifications. Reconcile revenue, profit, assets, debt and intercompany items before modelling.
Cash access and distribution
Not all reported cash is equally available to shareholders. Consider regulatory restrictions, trapped cash, minimum capital, dividend capacity, tax leakage, debt covenants and the cost and timing of moving funds.
Comparable companies and transactions
Hong Kong, Mainland, regional and global comparables may have different growth, margins, regulation, investor bases and capital structures. Geography should be justified rather than selected only to maximise the available sample.
Regulatory, country and operating risk
Licensing, data rules, customer concentration, government policy, supply chains, sanctions exposure and local financing conditions may affect forecasts or discount rates. The same risk should not be embedded repeatedly in both cash flows and the rate.
Coordinate local and group teams
Agree data definitions, valuation dates and assumptions across finance, tax, legal and local management teams. A bilingual request list and a single source-of-truth model can materially reduce review friction.