Equity Valuation of Shipping Companies

EQUITY VALUATION OF SHIPPING COMPANIESAs part of “A Short Course in Ship Finance”

Nanyang Technological University

April 2, 2011

by: Teddy Tsai

Managing Director at Markis & Company (Asia) Ltd

Teddy Tsai ([email protected])

AGENDA

Basics of Financial Statements

What is Valuation?

Valuation Ratios

Cash-flow based valuations

Asset-based valuations

Other Issues / Metrics

2


COURSE GOAL

By the end of the talk, participants should have a basic understanding of how analysts value shipping equities, and what metrics can be used to benchmark the market performance of shipping equities.

3


• Obtain company data

• Talk to experts

Gather Data

• Create models• Forecast financial

statements• Perform financial

analysis

Financial Forecasts • Compare with

peers• Compare

historically• Perform

valuations analysisValue the

stock

• Draft report• Explain

assumptions• Communicate

views

Publish report

WHAT EQUITY ANALYSTS DO

4

BASICS OF FINANCIAL STATEMENTS

5


THE BASICSIncome

Statement

• Captures sources of profitability within a specified period of time.

• Sales, costs, margins, & profits

Cash Flow Statement

• Captures sources and uses of CASH within a specified period of time.

• Shows changes in cash from operating, investing, and financial activities.

Balance Sheet

• A snapshot of the assets, liabilities, and equity of a company.

• A single point in time, capturing the company’s financial conditions.

6


INCOME STATEMENT

7

Income Statement FY1 2008 FY1 2009 FY1 2010Revenues 9285.125 6515.578 9422.092 - Cost of Revenue 8328.979 6535.951 8152.909Gross Profit 956.146 -20.373 1269.183 - Selling, General & Admin Expense 819.029 657.697 722.415Operating Income 148.606 -668.032 565.673 - Interest Expense 27.946 59.265 34.638 - Foreign Exchange Losses (Gains) 24.674 -11.293 -8.418 - Net Non-Operating Losses (Gains) -41.203 -15.877 9.631Pretax Income 137.189 -700.127 529.822 - Income Tax Expense 48.926 38.977 65.799Income Before XO Items 88.263 -739.104 464.023 - Extraordinary Loss Net of Tax 0.000 0.000 0.000 - Minority Interests 5.149 1.705 3.087Net Income 83.114 -740.809 460.936 - Total Cash Preferred Dividends 0.000 0.000 0.000Net Inc Avail to Common Shareholders 83.114 -740.809 460.936Abnormal Loss -30.526 -149.048 -5.258Tax Effect on Abnormal Items 5.495 26.829 0.653Normalized Income 58.083 -863.028 456.331Comprehensive Income - -594.923 422.563Comprehensive Income per Share - -0.290 0.164

Source: Bloomberg


INCOME STATEMENT - PER SHARE DATA, REFERENCE ITEMS

8

Per Share Data FY1 2008 FY1 2009 FY1 2010Basic EPS Before Abnormal Items 0.0357 -0.4208 0.177Basic EPS Before XO Items 0.0511 -0.3612 0.1788Basic EPS 0.0511 -0.3612 0.1788Basic Weighted Avg Shares 1627.3814 2051.035 2577.94Diluted EPS Before Abnormal Items 0.0355 -0.4208 0.1765Diluted EPS Before XO Items 0.0508 -0.3612 0.1783Diluted EPS 0.0508 -0.3612 0.1783Diluted Weighted Avg Shares 1635.9899 2051.035 2585.17Reference ItemsEBITDA 411.628 -381.816 850.902Gross Margin 10.2976 -0.3127 13.4703Operating Margin 1.6005 -10.2528 6.0037Profit Margin 0.8951 -11.3698 4.8921Sales Growth 13.7886 -29.8278 44.6087Basic EPS Before XO Growth -84.1545 - -Interest Income 9.019 7.189 4.277

Source: Bloomberg


CASH FLOW STATEMENT

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Cash Flow FY1 2008 FY1 2009 FY1 2010 + Net Income 83.114 -740.809 460.936 + Depreciation & Amortization 263.022 286.216 285.229 + Other Non-Cash Adjustments 106.398 125.859 77.239 + Changes in Non-Cash Capital 49.064 -221.236 -130.072Cash From Operating Activities 501.598 -549.97 693.332 + Disposal of Fixed Assets 49.351 26.755 27.594 + Capital Expenditures -879.049 -89.051 -471.046 + Increase in Investments 0 0 0 + Decrease in Investments 4.374 0 0 + Other Investing Activities -19.566 -11.281 -6.612Cash From Investing Activities -844.89 -73.577 -450.064 + Dividends Paid -151.277 -39.246 0 + Change in Short-Term Borrowings 0 0 0 + Increase in Long-Term Borrowings 779.323 563.4 506.67 + Decrease in Long-term Borrowings -356.526 -951.29 -99.779 + Increase in Capital Stocks 1.76 957.505 1.39 + Decrease in Capital Stocks -0.621 0 0 + Other Financing Activities -4.513 -2.993 -7.385Cash from Financing Activities 268.146 527.376 400.896Net Changes in Cash -75.146 -96.171 644.164

Source: Bloomberg


CASH FLOW STATEMENT – REFERENCE ITEMS

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Cash Flow FY1 2008 FY1 2009 FY1 2010Reference ItemsEBITDA 411.628 -381.816 850.902Net Cash Paid for Acquisitions -Free Cash Flow -377.451 -639.021 222.286Free Cash Flow To Firm -359.4714 - 252.6223Free Cash Flow to Equity 94.697 -1000.156 656.771Free Cash Flow per Basic Share -0.2319 -0.3116 0.0862Price to Free Cash Flow - - 19.698Cash Flow to Net Income 6.0351 - 1.5042

Source: Bloomberg


BALANCESHEET

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Balance Sheet FY1 2008 FY1 2009 FY1 2010Assets + Cash & Near Cash Items 429.219 333.048 977.212 + Accounts & Notes Receivable 720.977 737.752 1082.005 + Inventories 159.015 197.208 243.626 + Other Current Assets 181.318 236.115 99.61Total Current Assets 1490.529 1504.123 2402.453 + Long-Term Investments 0 0.031 0.068 + Gross Fixed Assets 5642.156 5707.121 - - Accumulated Depreciation 1990.473 2188.625 - + Net Fixed Assets 3651.683 3518.496 3705.515 + Other Long-Term Assets 302.379 317.9 343.021Total Long-Term Assets 3954.062 3836.427 4048.604Total Assets 5444.591 5340.55 6451.057

Liabilities & Shareholders' Equity + Accounts Payable 162.982 242.069 1174.158 + Short-Term Borrowings 471.752 20.975 21.023 + Other Short-Term Liabilities 1300.423 1095.146 420.899Total Current Liabilities 1935.157 1358.19 1616.08 + Long-Term Borrowings 777.682 918.831 1338.177 + Other Long-Term Liabilities 227.161 223.339 230.989Total Long-Term Liabilities 1004.843 1142.17 1569.166Total Liabilities 2940 2500.36 3185.246 + Minority Interest 44.047 43.571 43.407 + Share Capital & APIC 845.379 1815.479 1820.019 + Retained Earnings & Other Equity 1615.165 981.14 1402.385Total Shareholders' Equity 2504.591 2840.19 3265.811Total Liabilities & Equity 5444.591 5340.55 6451.057

Source: Bloomberg


BASICS OF FINANCIAL ANALYSIS

Purpose – The assessment of the profitability, solvency, liquidity, and stability of a business.

Use of financial ratios to make use of financial statement data.

Methods – Past performance, future performance, and comparative performance

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RATIOS ANALYSIS

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Ratio Analysis FY1 2008 FY1 2009 FY1 2010Gross Margin 10.2976 -0.3127 13.4703Operating Margin 1.6005 -10.2528 6.0037Pretax Margin 1.4775 -10.7454 5.6232Profit Margin 0.8951 -11.3698 4.8921Return on Assets 1.5902 -13.7376 7.818Return on Common Equity 3.2451 -28.1828 15.316

Enterprise Value FY1 2008 FY1 2009 FY1 2010 Historical Market Cap 1146.963 2912.8707 4384.8634 + Minority Interest 44.047 43.571 43.407 + Total Debt (ST & LT Debt) 1249.434 939.806 1359.2 - Cash & Equivalents 429.219 333.048 977.212Enterprise Value 2011.225 3563.1997 4810.2584

Price Ratio Analysis FY1 2008 FY1 2009 FY1 2010Price/T12M Sales per Share 0.1234 0.3556 0.4647Price/T12M EBITDA per Share 2.7838 - 5.1458Price/T12M Earnings per Share 13.7761 - 9.4993Price/Book Value per Share 0.4661 1.0416 1.3607Price/T12M Cash Flow per Share 2.2845 - 6.3153Dividend 12 Month Yld - Gross 12.5 2.2719 1.6198

Earnings Yield 7.2589 -31.9787 10.5271 Price/T12M Earnings per Share 13.7761 - 9.4993Price/Net Tangible Assets per Share 0.4982 1.104 1.4292 Net Tangible Assets per Share 1.4134 1.0231 1.1884Price/T12M Free Cash Flow per Share - - 19.698 Trailing 12M Free Cash Flow Per Share -0.2319 -0.3116 0.0862

EBIT Yield 12.9684 -28.8361 12.9191Dividend Yield 10.26 0 2.1192Price/Tangible Book Value per Share 0.4982 1.104 1.4292Free Cash Flow Yield -32.9391 -27.5839 5.0767

Source: Bloomberg


DUPONT ANALYSIS

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FY 2010

FY 2009

FY 2008

FY 2007

FY 2006

FY 2005

FY 2004

FY 2003

FY 2002

FY 2001

FY 2000

(100.0)

(50.0)

-

50.0

100.0

150.0

200.0

250.0

300.0

15.3

(28.2) 3.2

21.9 15.4 33.6

54.1 46.1

(45.8)

(6.1) 20.6

Return on Common Equity Tax Burden Interest Burden EBIT Margin

Source: Bloomberg, Wikipedia

WHAT IS VALUATION?15


EQUITY VALUATION

In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability.

– Wikipedia

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EQUITY VALUATION What is it used for?

Quantifying how much a company (or new business) is worth. Can be used in investment analysis, capital budgeting, M&A

transactions, financial reporting, taxable events, litigation, etc. How is it done?

Assessing future cash flows, profits, and investments Assessing risk involved in generating cash flows and profits. Compare risk-reward potential versus other peers and projects. And any other reason that can add value, or worth to a buyer.

What it is NOT – Valuations is not a market price. It is an estimated worth. Stock valuation is not a prediction. It is a convention, for the

purpose of stability and liquidity of investments.

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VALUATION MYTHS Valuations is a long-term fair value and stable

over time.

The best valuation is where the most precise estimate can be calculated

The more complex and quantitative the model, the better

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TECHNICAL VS. FUNDAMENTAL ANALYSIS

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Chartist approach Intrinsic value approach

Source: Bloomberg


RELATIVE VS. ABSOLUTE VALUATIONS

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Relative Valuations Absolute Valuations

Source: Bloomberg


DIRECT VS. INDIRECT VALUATIONS

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Direct Valuations DCF Multiples … using metrics to

arrive at an “intrinsic value” of the stock.

Indirect Valuations Equity IRR from LBO

approach Accretion/dilution in EPS

from merger analysis IRR from capital

budgeting projects. IRR or break even rate

based on purchase price, debt capacity, etc.

….assuming a range of assumptions in a model to arrive at an estimated return.


EQUITY VS. SHIP VALUATION METHODS

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Equity/Stock Valuations Price Multiples DCF NAV SOTP ….etc.

Ship Valuations Market valuation Demolition value Historical value Damaged value Replacement values


COMMON EQUITY VALUATION METHODS Comparative Valuations

Valuations using ratios, multiples, etc.

Cash Flow Based Methods Valuations using forward estimates of cash flows,

growth, and cost of capital.

Asset Based Methods Valuations based on current market value of

assets, sum of the parts, net asset values.

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VALUATION RATIOS24


UNDERSTANDING VALUATION MULTIPLES Multiples are the simplest to understand, but

also can be the most theoretically rigorous approach.

A relative valuation approach, because valuation is compared to another benchmark.

Issues: Source of data and comparables, what metric to use, what discount/premium to apply?

Common valuation multiples Price / Earnings Price / Book Dividend Yield EV/EBITDA 25


Price

EPS

P/E Ratio

THE BASICS: P/E RATIO

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P/E Ratio Current share price /

EPS Market Cap / Net

Income Pros:

Accessible, easy to understand, easy to apply (pick a number).

Cons: Not as relevant for

cyclical sectors. No standard definition

for EPS


THE BASICS: P/E RATIO Low P/E doesn’t necessarily mean “cheap”.

Cyclical sectors would have low P/Es when earnings are very high. Probably peak of the cycle and worst time to buy the stock.

Related Metrics: Earnings Yield PEG Ratio

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P/E RATIO VALUATION GRAPH

28

Source: Bloomberg


EARNINGS SUMMARY

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Source: Bloomberg


P/E BAND

30

Source: Bloomberg


Market Cap

Total Equity

P/B Ratio

THE BASICS: P/B RATIO

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P/B Ratio Market Cap / Total Equity Current share price /

book value per share

Pros: Accessible, easy to

understand, easy to apply.

Complements to P/E & ROE.

Cons: BV is a historical cost

number; can vary from market value.


THE BASICS: P/B RATIO P/B Ratio is a favorite metric for asset-

intensive industries such as shipping. P/B used with ROE can indicate periods where

returns generated were higher than market expectations.

Total Equity is less “adjustable” versus net income, but may also be distorted by historical costs,

Similar Metrics: Price / NAV

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PRICE / BOOK VS. ROE

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Source: Bloomberg


P/B BAND

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Source: Bloomberg


Dividend per Share

Share Price

Dividend Yield

THE BASICS: DIVIDEND YIELD

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Dividend Yield Annualized cash

dividend per share / share price

Pros: Tangible rate of return

metric. Represents actual cash

payments. Cons:

Tax issues involved May be distorted by

special dividends, no set dividend policies.


THE BASICS: DIVIDEND YIELD Annualized dividend per share = Annualized in

terms of the year in which the dividend was earned rather than paid. Combine interim and final to annualize, or “current indicated annual rate” or quarterly div x 4.

Dividends set by Board of Directors. This may be in accordance to a set dividend policy, vary in terms of payments from year to year, or vary in terms of payouts. Higher payout, lesser retained earnings for investments in new projects.

Similar Metrics: Free Cash Flow Yield

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DIVIDEND HISTORY

37

Source: Bloomberg


DIVIDEND FORECASTS

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Source: Bloomberg


Enterprise Value

EBITDA

EV/ EBITDA

THE BASICS: EV/EBITDA

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EV / EBITDA Enterprise value /

Earnings before interest, taxes, depreciation, and amortization.

Pros: Capital structure

neutral. Takes out distortions

due to accounting differences, taxes

Cons: Ignores capital intensity Difficult to adjust value

drivers


THE BASICS: EV/EBITDA Enterprise value: The value of all claims on the

assets and cash flows of a company

EBITDA = Operating income + Depreciation & Amortization

Related Metrics: EV / Sales 40

Market Cap Net Debt Minority

Equity

Other non-Current

Liabilities

Enterprise Value


THE BASICS: EV/EBITDA ISSUES Net debt + market capitalization reverses the

impact of capital structure during the current period.

EV and EBITDA can be adjusted to take into account the impact of operating leases, or chartered-in vessels. This would make for a fairer comparison between ship-owners and ship owner-operators.

EV/EBITDA can be used to value companies, with the intention to take on debt to acquire strategic targets.

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EV/EBITDA VALUATION GRAPH

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Source: Bloomberg


OTHER VALUATION RATIOS

Basically most financial statement line-items can be used to generate a valuation ratio.

Price / Cash Flow Free Cash Flow Yield EV / Sales, Price / Sales Price / Cash Earnings EV / dwt …. etc.

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TRICKS OF THE TRADE

Aggregate P/E vs. Weighted average P/E Peer group selection Consistent application of “EPS adjustments” Application of time-weighted shares

outstanding, historical adjustment factors, diluted vs. basic shares outstanding.

Use of year-end price versus average price. Forward P/E vs. trailing (historical) P/E

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SUMMARY – VALUATION RATIOS

Forecast financial metrics of company to be analyzed

Identify the most relevant peer group

Calculate aggregate and weighted average peer comparison valuation ratios

Calculate various historical valuation ratios and select time period that is most appropriate

Compare valuation ratios over time, identify where we are in the cycle 45

CASH-FLOW BASED VALUATIONS

46


CASH FLOW BASED METHODS Valuations using forward estimates of cash flows,

growth, and cost of capital.

Free Cash Flow to the Firm (FCFF) – The sum of cash flows to all claim holders, including debt, preferred, and common shareholders.

Free Cash Flow to Equity (FEFC) – residual cash flows after meeting debt payments, preferred dividends, and providing for capex for existing and new assets.

Dividend discount model (DDM) – based on the idea that the value of equity is all future dividends discounted back to today.

Residual Income model (RIM) – Value is derived from current book value of equity and the present value of expected future residual income (ROE in excess of Cost of Equity)

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PROS & CONSFOR CASH FLOW MODELS

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Absolute valuation based upon expected cash flows

Captures cyclical variation in cash flows

Captures the impact of future capex plans

Effective for modeling operating companies

Not standardized, or easily obtainable

Sensitivity to cost of capital and terminal growth.

High variation in risk premium estimates.

Theoretical approach may be difficult for non-financial managers to understand.

Advantages Disadvantages


KEY INPUTS

EBITDA Change in provision

change in working capital

Capex minority interest

Free Cash Flow

Terminal Value

Weighted average Cost

of Capital


AN EXAMPLE

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DCF Valuation Calculation of WACCValue of free cashflow 2011- 2018 (USDm) 399 Market value equity (2011)- USDm 1,186Terminal value 1,150 - in % 56%Value of firm (USDm) 1,549 Interest bearing debt (2011E) - USDm 917LESS: Net debt 2011E (USDm) - 239 - in % 44%Value of equity (USDm) 1,310

Risk premium 6.2%Beta 1.5

Equity value per share (USD) 0.68 Risk free rate 3.0%Equity value per share (HKD) 5.28 Interest rate 5.6%

Tax- rate 5.0%Cost of equity 12.0%

Terminal Growth Assumptions Cost of debt 5.3%Nominal growth year 2018+ 2.5% Net WACC 9.1%


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USDm FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018EBIT 93 65 160 165 171 176 182 188 EBIT (1-tax rate) 88 61 152 157 162 167 173 179 + Depreciation and amortization 62 68 74 76 78 81 84 86 Changes in working capital 4.6 (1.3) (3.8) (3.9) (4.1) (4.2) (4.3) (4.5) - Capital expenditure (159) (112) (120) (118) (116) (114) (112) (110) Free cash flow (4.1) 16.7 101.3 110.8 120.6 130.6 140.7 151.1

Period (n=year) 1 2 3 4 5 6 7 8Discount factor 0.917 0.841 0.771 0.707 0.648 0.594 0.545 0.500PV of Free Cash Flow -4 14 78 78 78 78 77 75

Sum of PV of FCF 399 PV of terminal value 1,150 Total firm value 1,549 LESS: Net debt 2011E (239) Equity value 1,310

No. of shares (mn) 1,927 Equity value per share (USD) 0.68 USDHKD rate 7.77 Equity value per share (HKD) 5.28 Current share price 4.78 premium/discount % 10.5%

AssumptionsRisk free rate 3.0%Beta 1.45Market risk premium 6.2%Cost of equity capital 12.0%Average cost of debt 5.6%Tax shield = (1- tax rate) 0.95Cost of debt capital 5.3%Total Debt/capital ratio 0.44WACC 9.06%Terminal growth 2.50%


DIVIDEND DISCOUNT MODEL

52

Source: Bloomberg


TRICKS OF THE TRADE Compromise between rigor and a pragmatic

approach

Forecast in three stages: 1) near-term detailed forecasts, 2) intermediate growth period, 3) assumed steady state.

Tweaks Forecast period – How long will growth last? Fade period – time it takes to reach long-term

growth Cost of equity, risk premium, which risk free

rate? Raw beta or adjusted beta

Best practices – Run sensitivity analysis on key drivers.

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ASSET-BASED VALUATIONS54


This is probably the most familiar way to value companies for ship owners.

What would it cost if I buy all the vessels from the secondhand sale & purchase market?

No standard definition, but valuations can be based on current market value of assets, value of contracts, newbuilding contracts, and adjusting for non-operating items.

55

ASSET-BASED VALUATIONS


SHIP VALUES

56


PROS & CONSFOR AN ASSET-BASED APPROACH

57

Familiar to ship owners

Sector-specific metric

Links equity value to industry metrics

Adjustments can be made for value of contracts, newbuilding contracts

No standardized definition of NAV

Based upon secondhand prices, which are not always readily available for all ship types

No premium given to management capabilities

Tends to over-estimate during exuberant markets

Advantages Disadvantages


AN EXAMPLE – MARKET ADJUSTMENT VS. BOOK VALUE

58

NAV valuation (USDm) Book MarketOwned fleet 897 1,557Other non- current assets 903 903Current assets 842 842

Current liabilities - 240 - 240Non- current liabilities - 827 - 827Minority interest 0 0

Value of orderbook 762 762Outstanding capex - 300 - 300Total 2,038 2,698

No. of shares (mil) 1,927 1,927NAV/share (USD) 1.06 1.40NAV/share (HKD) 8.2 10.9


AN EXAMPLE – NEWBUILDING PRICE APPROACH

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# of Ships 107 Salvage value / Ship 5.0 $ mnTotal fleet scrap value ($ mn) 535.0 Newbuilding cost 120.0 $ mnDepreciated market value (avg) 11,880.2 Depreciation period 25.0 yrsBook value (local currency) 18,156 Cash (local currency) 3,426 Average age of fleet 10.0 yrsLC/US$ exchange rate 3.03 Cash balance (US$) 1,132 Share Price 8.00 local currencyInterest bearing debt (local curr) 6,608 Shares 3,720 mn Interest bearing debt (US$) 2,183 Market Cap (local currency) 29,758.6 mn

Market Cap US$ 9,831.1 US$ mnUS$ salvage value & net debt (516.1) Enterprise value (US$) 10,882.2 US$ mn

US$ net book value 4,947.0 Market adj. net book value per share 8.81

Market value adj. net book value (US$ mn) 10,829.0 % premium/discount 10.2%

Company Name


TRICKS OF THE TRADE Should you including chartered-in vessels? Value

of charter contracts? Include financial & operating lease obligations?

What “market price” do you use? “Average” price? What time frame is “recent

transactions”? Secondhand, newbuilding, and/or scrap prices? Extrapolate for age and size? What about quality?

Can combine this with a sum of the parts (SOTP) valuation. Appropriate for holding company structures, or companies with different business lines.

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OTHER ISSUES / METRICS61


VALUING TRANSACTIONS Back into the value of the company based on

transactions: Leveraged Buyouts – Entry & exit multiples, debt

capacity, and EBITDA growth assumptions. To be used to see how much you can pay and finance, to obtain an acceptable equity rate of return.

Value of Contracts approach – contracted rates, cash flow generated, and debt capacity assumptions in a capital budgeting model. Generates NPV and IRR estimates.

Merger Integration – financing and accounting adjustment assumptions. To be used to see how much you can afford to pay and achieve accretion in earnings.

Venture Capital approach – Investment, IPO terminal value, and discount rate assumptions. Percent of ownership and high discount rate is needed, due to the risky nature of these investments.

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OTHER VALUATION APPROACHES/TECHNIQUES

Contingent claims – Capital structure arbitrage

Economic Value Added Option pricing Sum of the Parts (SOTP)

63


FURTHER STUDIES

Economic value added – EVA, ROIC, etc.

Financial Analysis – DuPont analysis, free cash flow analysis, capital intensity, margins, ratios analysis

Strategic Analysis – SWOT, five forces, etc.

Capital structure – bonds, preferred shares, convertible bonds, voting rights, options, dual listings, etc. 64


SUMMARY Valuation is the process of estimating what

something is worth. Fundamental analysts approach valuations in three

major methods1. Comparative methods, using valuation ratios. 2. Cash flow-based methods, estimating future growth,

cash flows, and cost of capital. 3. Asset-based methods, estimating current market values

of assets, and adding it up. There are many tricks of the trade, and care needs

to be taken when reviewing other people’s estimates.

At the end of the day, this is only a tool, and should reflect your views on the sector, management, company strategies, and opportunities.

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COPYRIGHT & DISCLAIMER Copyright

Equity Valuation of Shipping Companies by Teddy Tsai is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License.

http://creativecommons.org/licenses/by-nd/3.0/

Disclaimer This presentation is provided for information purposes only. It is not a complete

analysis of every material fact respecting any company, industry, security or investment. Opinions expressed are subject to change without notice.

While every effort has been made to ensure that the information contained in this presentation is correct with no errors and omissions, no responsibility can be nor is accepted as to the accuracy or completeness of the statements, facts, and examples included herein. No liability is accepted whatsoever on the part of Markis & Company (Asia) Ltd., or of any other parties whose material is contained in the presentation for any loss of profit or damange or any liability to third party whatsoever arising from the use of this presentation.

Neither this report, nor any opinion expressed herein, should be construed as an offer to sell or a solicitation of an offer to acquire any securities or other investments mentioned herein. The company accepts no liability whatsoever for any direct or consequential loss arising from the use of this report or its contents. 66

http://creativecommons.org/licenses/by-nd/3.0/


67

Markis & Company (Asia) Ltd

Teddy Tsai

Managing Director

+852 8127-7587

[email protected]

Economy & Finance

Equity Valuation of Shipping Companies