Valuation of Aquaporin A/S

Anne Sofie Waldorff Træholt & Fannar Freyr Asgeirsson

Student thesis: Master thesis

Abstract

With changing weather patterns and extreme temperatures the world we live in is being faced with the growing challenge of water scarcity. The lack of fresh potable water has for long been a problem in many parts of the world. Through technological innovation, the problem has been addressed in recent years with significant improvements in both desalination and other water treatment solutions. This paper is performing a valuation of the Aquaporin A/S, a Danish technology company that specializes in water purification through biotechnical innovations. The main purpose of this thesis is to determine the value of Aquaporin A/S’s equity and assess the company’s future outlook, both from a financial and a strategic perspective. The valuation is carried out by assessing Aquaporin A/S’s current strategic and financial positions thereby determining the key value drivers and growth opportunities. The results from these analyzes lays the foundation for forecasting the company’s future performance and in turn determining the value of its equity. By employing the discounted cash flow model, a market value of the equity of DKK 833.820.000 is established. The reliability of the model on which we base our results is subject to numerous assumptions. In order to minimize the effects of these assumptions our valuation is supported by a sensitivity analysis on the company’s weighted average cost of capital, its perpetuity growth and firm-specific risk.

EducationsMSc in Finance and Investments, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2019
Number of pages135