There are 2 common ways of valuing properties; the first would be an asset-based approach and the second would be based on earnings power. The ideal way of using the asset approach would be to value all properties based on their land areas multiplied by their price per unit area. Due to the relative opacity of the Chinese property market and the large amount of properties which Goldlion possesses, this is simply not feasible for us. The other more simplistic way would be to apply a discount to its book value. The discount factor is meant to accommodate any possible shocks to the market; it is often an arbitrary value and of course, the steeper the discount the more conservative the valuation.
The second method of earnings power valuation discounts all future cash flows (which ......In our previous post, we briefly mentioned our difficulties in valuing Goldlion’s property division.
There are 2 common ways of valuing properties; the first would be an asset-based approach and the second would be based on earnings power. The ideal way of using the asset approach would be to value all properties based on their land areas multiplied by their price per unit area. Due to the relative opacity of the Chinese property market and the large amount of properties which Goldlion possesses, this is simply not feasible for us. The other more simplistic way would be to apply a discount to its book value. The discount factor is meant to accommodate any possible shocks to the market; it is often an arbitrary value and of course, the steeper the discount the more conservative the valuation.
The second method of earnings power valuation discounts all future cash flows (which ......
There are 2 common ways of valuing properties; the first would be an asset-based approach and the second would be based on earnings power. The ideal way of using the asset approach would be to value all properties based on their land areas multiplied by their price per unit area. Due to the relative opacity of the Chinese property market and the large amount of properties which Goldlion possesses, this is simply not feasible for us. The other more simplistic way would be to apply a discount to its book value. The discount factor is meant to accommodate any possible shocks to the market; it is often an arbitrary value and of course, the steeper the discount the more conservative the valuation.
The second method of earnings power valuation discounts all future cash flows (which ......
