Equity valuation of BYD Company Ltd.

• Autor(a) principal: Luo Yuqi
• Data de Publicação: 2022
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10071/25253
• topic: BYD Company Ltd.; Veículo eléctrico -- Electric vehicle; Free cash flow to the firm; Free cash flow to equity; Multiples; Valor justo Fair value; Múltiplos

BYD Company Limited is a Chinese manufacturing company that operates across five continents, focusing on automobiles, batteries, solar panels, rail transit components, forklifts, and buses. The company has been growing sustainably since its Initial public offering (IPO) in 2002. This project is dedicated to estimating the fair value of BYD Company Ltd. on December 31, 2020. The valuation is based on a comprehensive analysis of the electric vehicle industry and BYD’s past performance as well as its future prospects. After making some key assumptions on future cash flow projection, the free cash flow approach will be used to estimate the fair value of BYD’s share on December 31, 2020. And then, the valuation will also be carried out by applying the multiples approach. The results show that the fair value estimated by the two approaches is contradictory, whereas the free cash flow approaches suggest selling or holding a short position, on the opposite the multiples approach recommends buying or holding a long position on BYD’s share. However, considering industry prospects, the long position on BYD’s share is highly recommended.