GS Yuasa

DCF against the market 41.4% (tolerance 15.0%). the discount rate: beta 1 for every company (Valuation, Cost of equity, Beta), a cost of equity of 7.96 per cent and a WACC of 7.60: The DCF stands 41.4 per cent above the market capitalisation (657,711 against 465,080); the market's price implies a steady-state WACC of 10.11 per cent. At the bottom-up beta of 1.39, a WACC of 9.50 per cent, the same forecast values the equity at 476,748, 2.5 per cent above the market (evaluated on 4 November with that beta, then set back to 1): the 1.9 points of WACC move the DCF by 180,963, 28 per cent of its value, and a WACC a little above 9.5 per cent closes the gap.

Residual income against the market 42.7% (tolerance 15.0%). the same discount rate as the DCF's gap: the WACC of 7.60 per cent at beta 1: Residual income stands 42.7 per cent above the market capitalisation (663,699 against 465,080). At the bottom-up beta's WACC of 9.50 per cent the same forecast values the equity at 480,419, 3.3 per cent above the market (evaluated on 4 November with that beta, then set back to 1), so a WACC a little above 9.5 per cent closes it. At the model's WACC the market's value leaves a continuing value of minus 62,959 at FY2035 against the model's 305,515.