Finance Team #1 by

Valuation Worksheet - 엄주혁

djawngur25 — 2023-12-04 03:15:52 UTC

Problem Identification-Nomin

Nomin_ — 2023-12-04 03:20:40 UTC

Anam Electronics is presently confronted with the challenge of determining the optimal market for their products, weighing the options between Chile and Brazil. Following the selection of the target country, they must deliberate on the most effective methods to secure a profitable and stable position within that market. This necessitates comprehensive research on each country, encompassing an exploration of cultural disparities and their potential impact on the adoption of Anam Electronics products. Given the substantial cultural distinctions between South Korea and the chosen country, proactive measures must be identified to mitigate and minimize these differences effectively.

Brazil Valuation Summary

djawngur25 — 2023-12-04 03:21:32 UTC

average - 7.834734819

optimistic - 9.480922335
pessimistic - 6.111044873

Chile Valuation Summary

djawngur25 — 2023-12-04 03:45:06 UTC

average - 8.972852441
optimistic - 11.24541461
pessimistic - 6.645296842

Additional Economy Factors

djawngur25 — 2023-12-04 04:45:38 UTC

Edited Valuation Worksheet

djawngur25 — 2023-12-04 04:54:20 UTC

Background - Energy Usage

ymha1219 — 2023-12-04 08:33:27 UTC

Brazil

Energy Access

total population: 99.4% (2021)

urban areas: 99.7% (2021)

rural areas: 97.3% (2021)

Trade

exports: 395 million kWh (2020 est.)

imports: 25.113 billion kWh (2020 est.)

6th highest importer in the world.

Energy Consumption Per Capita

59.444 million Btu/person (2019 est.)

comparison ranking: 93

Chile

GDP Growth rate

11.67% (2021 est.)

-5.98% (2020 est.)

0.77% (2019 est.)

Inflation Rate

4.52% (2021 est.)

3.05% (2020 est.)

2.56% (2019 est.)

Credit Score

Fitch rating: A- (2020)

Moody's rating: A1 (2018)

Standard & Poors rating: A+ (2017)

Industry Analysis

ymha1219 — 2023-12-04 08:36:36 UTC

Brazil

Enel Brazil

402% increase in sales from 2016 to 2022

Average growth rate of 67%

Average growth rate of 11.5% during the last 3 years

Neoenergia
64.6% increase in revenue from 2018 to 2022

Average growth rate of 16.15%

Average growth of 11.25% during the last 3 years

Chile

Copec

36.8% revenue growth from 2015 to 2021

5.25% average growth.

0.61% average growth in the last 3 years.

Valuation

ymha1219 — 2023-12-04 08:38:09 UTC

Assumptions

Assuming the capital structure does not change.

→ WACC does not change.

Taking conservatism and using the growth rate of the recent 3 years.

Brazil

Optimistic Scenario

Growth rate of 11.25%

WACC 13.02%

PV(SUM) = 56.26

Pessimistic Scenario

Growth Rate of -3.7%

WACC 15.02%

PV(SUM) = 5.37

Chile

Optimistic Scenario

Growth rate of 0.61%

WACC 14.00%

PV(SUM) = 7.47

Pessimistic Scenario

Growth rate of -28.9%

WACC 16.00%

PV(SUM) = 3.74

Discussion Process

pisco48546 — 2023-12-06 07:00:45 UTC

The meeting with the global department was conducted in a way that compares which countries, Brazil or Chile, match their financial and cultural goals for Anam Electronics.

The finance department concluded that it was appropriate to enter Brazil after applying the DCF approach in consideration of corporate growth, free cash flow, and various other economic factors.

Global department also argued that it was appropriate to enter Brazil based on various cultural variables such as hofstede country comparison and PMI strategies.

After each department's presentation, We exchanged simple questions and answers such as the correlation between the country's industrial feature and corporate value, and the interpretation of the Hofstede country comparison bar chart. Afterall, Anam Electronics' entry into Brazil was concluded.