My valuation of PAC by sum of the parts (on 17/9/21).
Very close to the offer of Regal now.
All the details below are from the post on 17/9/21.
Here are the details of my valuation for PAC.
4 parts :
- 1 % of GQG to be sold at IPO based on a 5 bn valuation : 50 m
(using@ipsofactoidscenario, which makes sense to me)
- 4 % of GQG based on a 7.5 bn valuation : 300 m
(MFG valuation, which corresponds to an EV/EBITDA of 16.9 x FY 22 for GQG)
- rest of PAC business valued based on book value : 292 m
- potential tax on capital gain on GQG holding : 104 m
(assuming a tax rate of 30 % and a potential capital gain of around 346 m)
Total PAC valuation : 538 m or 10.58 $ per share.
Main assumptions :
-GQG valuation of 7.5 bn once listed (not at IPO price)
That's probably the main assumption here which may be aggressive given the expected IPO price of around 5 bn AUD.
However, given its growth profile, I don't see why QGQ could not be valued at such a valuation (16.9 x EBITDA 22e and 21.9 x EBITDA 21).
Even if I am always reluctant to use relative valuation, it is interesting to see this 7.5 bn valuation for GQG corresponds to MFG valuation, while MFG has a similar level of AUM, some performance fees and a much lower growth profile than GQG.
-Valuation of PAC excluding GQG holding, based on its book value.
I would prefer to value it based on earnings, but I am not sure of PAC results excluding GQG.
This assumption (of taking book value for the rest of PAC) may be too optimistic, looking at the way PAC was trading before the recent increase of its share price (since the beginning of September).
-Potential tax on capital gain on GQG holding
Not sure of the way the capital gain would be calculated.
Would be based on their investment in GQG (2.7 m USD) or on the existing book value of GQG ?
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My valuation of PAC by sum of the parts (on 17/9/21).Very close...
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