Valuation for Construction Work Related Business
The Valtech valuation team recently embarked on a complex yet fulfilling endeavor: appraising a construction work related business in Hong Kong. This venture was classified as a reportable transaction for our client, necessitating adherence to the Hong Kong Stock Exchange (HKEx) listing regulations. Our team meticulously evaluated the investment’s market value.
To appraise the business, we primarily utilized the market approach. We conducted a thorough analysis of Hong Kong-listed companies involved in repair, maintenance, alteration, and additional works (RMAA) and related activities. We meticulously selected potential comparables from various angles. Key attributes of the business, such as licenses held and the primary revenue streams, were identified to ensure a fair comparison with similar entities. By comparing our client’s earnings multiples with those of the selected companies, we could conclude the transaction’s consideration as fair and reasonable.
Compliance with HKEx guidance
Furthermore, we assisted our client in preparing the necessary valuation disclosures mandated by the HKEx for transaction approval. This followed the issuance of an HKEx guidance letter in October 2023, which underscored the need for improved disclosure in transaction announcements. Our prompt and efficient response to these requirements was both gratifying and honorable, as our expertise gained recognition and acceptance from the HKEx.
