Business valuation services in Hong Kong

Business valuation is both an art and a science, where we balance the perceptions and expectations of business owners and potential investors. Although there are common shorthand methods to calculate business value for mergers and acquisition or liquidation, simply applying data to a common business value calculator only generates theoretical figures that may not be practically redeemable under market conditions. On the other hand, you want to be sure that your business valuation is accurate and appropriate instead of being held to a buyer’s market.

Businesses are commonly sold through brokers, marketplaces and for bigger companies, investment banks. Marketplaces are online transaction platforms for small private businesses to be sold directly by the buyer, while brokers handle the sales of small to medium sized companies. Investment banks handle the sales and mergers of large listed companies. Regardless of the level of business and means of sale or merger, independent, verifiable and reliable valuation is instrumental in any successful transaction, partnership or investment.

We take pride in our experience, technical expertise and familiarity with international standards of business valuation.

Valuation services initially take into account factors such as a company’s assets, debts, key interests, legal history, underlying assumptions, goodwill, customer base and profitability. Every business is unique, and a proper assessment requires that the value and importance of all these factors are properly calculated and adequately emphasized.

• Assets include Intellectual Property, complex financial instruments, real estate and equipment, among other potential sources of value. Assets can be the core of the business, but assets alone cannot account for the entirety of a business.

• Assumptions are variables surrounding business operations that affect profitability, and the extent to which these can be confidently forecasted. One of the most common and important examples of this is customer base; if a business offers a retail product, its customer base is widespread, and value is defined according to brand value, market presence and distribution. A wholesale business, on the other hand, operates on the assumption that a smaller base of clients will continue their relationship, meaning that the number, importance and longevity of these relationships should be demonstrated and factored into the company’s value.

• Financing and debt can illustrate a company’s facilities and liabilities. A good history with financial institutions and access to credit is a clear indication of value, while outstanding debt shows the responsibility a buyer or partner would be taking on. A proper accounting of a company’s history and structuring in this area is one of the most important aspects of business valuation services.

• A company’s litigation history indicates its legal standing and the likelihood that investors can be confident in its strength. The outcome of any past legal disputes is an important part a business’ story, and the portrayal of this affects the perception of its future. Our litigation related valuation services bring legal experience and expertise to the analysis of a company’s history, bringing clarity to our calculations.

Making a successful sale, merger or acquisition ultimately depends on finding an able investor who agrees with your valuation. Market value might differ from an owner’s expectation based on their own valuation of their business, even if only because of the availability of investor financing. Smaller businesses should focus on the value of their assets and goodwill. The fair market value of your business reflects its value to the average investor, while investment value reflects the value to a specific investor. The intrinsic value of a business measures profitability and assesses the business model and market, using both objective and subjective means.

It is important to measure the intrinsic value against market value in order to properly evaluate offers. Finding common ground with investors involves skillful evaluation and projections, for which you should seek professional business valuation services. Our personalized and coordinated tax and fiscal services assure your success from every angle.

An evaluation from us can give you an up to date market value based on all relevant factors- reports are confidential, and we can help you identify and amend any potential weaknesses so you can approach the market from the strongest possible position. Whether you are staring a new enterprise, seeking to restructure or planning your expansion, we are all ready to help. We have over 50 years of experience and numerous success stories over the years. Don’t hesitate to contact us with any business valuation enquiries and questions about valuation of private companies.