Start by defining the assignment
Before calculations begin, the valuer should understand the valuation subject, ownership interest, purpose, valuation date, intended users, reporting framework, deadline and expected reviewers. These points affect the basis of value, depth of work, evidence required and report format.
Typical valuation process
Initial discussion and scoping
Discuss the purpose, target, business model, financial scale, valuation date, deadline, users and any special requirements. The valuer then defines scope, assumptions, deliverables and fee basis.
Information request and management discussion
Collect financial statements, management accounts, forecasts, ownership information, contracts and other relevant records. Management discussions help the valuer understand operations, risks and value drivers.
Business, industry and market analysis
Review historical performance, competitive position, economic conditions, industry outlook, geographic exposure and company-specific opportunities and risks.
Select methods and build the analysis
Consider income, market and cost approaches; identify suitable comparable evidence; build calculations; and document why selected methods are appropriate for the purpose and available information.
Challenge assumptions and reconcile results
Assess forecasts, margins, growth, discount rates, multiples, asset values and other significant assumptions. Perform sensitivities where useful and reconcile indications from different methods.
Draft, review and final reporting
Issue a draft where appropriate, resolve factual comments and answer questions from management, auditors, boards, advisers, lenders or other reviewers before finalising the report.
What affects the timetable?
Information readiness
Complete and internally consistent financial records and forecasts generally reduce follow-up work.
Business complexity
Multiple entities, instruments, countries, business lines or intangible assets require more analysis.
Reviewer involvement
Auditor, HKEX, lender, legal or regulatory questions may add review rounds and supporting work.
Changes during the assignment
Revised forecasts, transaction terms, valuation dates or scope can affect both timing and fees.
How to prepare before contacting a valuer
Provide a concise background note covering the purpose, target, business nature, approximate turnover, profit or loss, total assets, net equity, valuation date, deadline, users or reviewers and any special request. Supporting documents can follow after initial scoping.