Strategisk analyse og værdiansættelse af IC Companys

Minh Van Huynh & Poul Erland Jensen

Student thesis: Diploma thesis

Abstract

The purpose of this thesis is to determine the correct market value per 30th June 2012 for IC Companys. The management of IC Companys expressed that the official share value did not reflect the actual value and the potential of the company. The research question of the thesis is therefore aiming to explore the actual share value of IC Companys through valuation analysis and a strategic analysis. The thesis is structured around four main components: strategic analysis, accounting analysis, budgeting and valuation. The strategic analysis accounts for the external and internal factors that influence IC Companys’ competitive situation, whereas the accounting investigates annual reports. To understand the company’s performance related to accounting, a pro forma accounting is created for the past 5 years’ reports. In the valuation part, we use the FCFF and the WACC-model to calculate IC’s value through a reverse discounting of the future cash-flow return. Through the strategic analysis it is concluded that IC Companys have core competences and specific brands that contribute positively, but also negatively to the company’s growth. The intensity of competition is fierce, as the industry they operate in is dominated by monopolistic competition and low barriers to entrance that are reinforcing the degree of competition. However, IC Company’s are well equipped for future challenges, as their key resources have been developed over time. The strategic perspectives are important to the budgeting analysis, as they clarify the competences and brands that contribute to future growth and thereby cash flow. In analysing the accounting aspects of the company, it is found that the global financial crisis of 2008 has impacted the company. With the aim of reducing the negative effect of the crisis, they implemented cost saving initiatives. These initiatives were successful since return of equity, return of invested capital and profit margin remained stable during the crisis. However, these financial performance numbers have been decreased during the past few years, but not to an alerting level. Through the FCFF-model, WACC is calculated to 10.50% and the capital structure for IC Companys is determined to 85,92/14,08 with a growth of 4% in terminal value. As a result of the strategic analysis, accounting analysis, budgeting and valuation, the total equity for IC Companys is estimated to 2.612 mil. DKK, which equals a share value of 154 DKK per unit. The final conclusion and answer to the research question is that the official share price of IC Companys A/S per 30th June 2013 should have been 154 DKK per share, which is 58 % more than the traded price. The research conducted in this thesis supports IC Companys’ managements’ stance, that the official share price did not reflect the actual value of IC Companys’ future strategic and economical potential.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
LanguageDanish
Publication date2013
Number of pages111