Questions about valuation in Hong Kong

A business valuation is an independent opinion of the value of a company, a shareholding or a business unit at a specific date, prepared under a defined standard of value. Hong Kong companies typically need one when an auditor requires support for a fair value in the accounts, when a transaction requires disclosure under the Listing Rules, when shares change hands between shareholders, when raising capital, for tax or transfer pricing purposes, or in a dispute.

Hong Kong does not operate a single statutory licence covering all valuation work. In practice, acceptance depends on the purpose. Auditors look for independence and relevant professional qualifications such as CPA, CFA or MRICS. The Listing Rules impose requirements on qualified valuers for certain property and mineral valuations. Courts assess expertise on the facts. Valtech's reports are signed by directors holding CPA, CFA, FRM, MRICS and ABV (AICPA) credentials.

At enquiry stage: the entity, the purpose, the valuation date and the standard involved. To do the work we normally need audited or management financial statements for recent years, a forecast where an income approach applies, the cap table and constitutional documents, details of any relevant agreements such as share option plans or loan terms, and any correspondence from your auditor setting out what they expect.

The standard and the asset drive the choice. The income approach discounts expected future cash flows and suits businesses with a reasonably predictable forecast. The market approach applies multiples from comparable listed companies or transactions. The cost approach considers what it would take to recreate the asset and is often used for early-stage or asset-heavy situations. Most engagements use one primary approach with a second as a cross-check.

The valuation date is the specific date the opinion applies to — usually the reporting date, the transaction date or a grant date. Value can change materially between dates, so the report only speaks as at that date. Where a company has several grant dates or reporting periods, each may need its own point-in-time analysis, which affects both scope and fee.

Yes. Pre-revenue and pre-profit companies are a routine part of the practice, including biotech, technology and university-led science projects. Where there is no earnings history, the analysis leans on the forecast, the most recent priced funding round, comparable transactions, milestone-based scenario analysis, or an allocation model across share classes — chosen according to the purpose.

Yes. Valtech directors have acted in expert witness and expert report roles in commercial disputes, providing fair value or liquidation value opinions for damages assessment and recovery. Litigation work is scoped differently from audit support because the report has to withstand cross-examination and opposing expert challenge.

Independence is central to the value of the report, so it is assessed before accepting an engagement. Where a conflict would compromise the opinion, we say so rather than take the work. For audit and regulatory purposes the independence of the valuer is one of the first things a reviewer tests.

Yes. Valtech has offices in Hong Kong and Singapore, and experience with PRC-side requirements such as SASAC filings. A Hong Kong holding company with subsidiaries or assets elsewhere in the region can be covered under one engagement.

Submit an enquiry with the entity, purpose, valuation date and applicable standard, and we will respond with a scope, fee and turnaround. If it is easier to talk it through first, call the Hong Kong office on +852 2388 9262.