Valuing Semapa as the sum of the parts

: equity valuation

Abstract

This dissertation aims to value the holding Semapa as the sum of the parts of the companies it owns – Portucel, Secil and ETSA. There is still much debate on which model is the best to estimate a company’s value, therefore the main methods and theories are firstly discussed in order to use the most appropriate valuation framework and accurate assumptions. By attributing different capital structures’ scenarios, this dissertation illustrates two Discounted Cash Flow’s approaches, as well as the value dispersion among them: the Adjusted Present Value with and without a target capital structure and the Weighted Average Cost of Capital. In comparison with the current market prices, the three models indicate that Semapa is currently undervalued. The multiples valuation are also performed as a complementary tool. The results obtained are then compared with those of BPI Equity Research and Millennium Investment Banking’s reports published in 2012 with the objective of doing a critical assessment on the main sources of differentiation.

Date of Award	Sept 2012
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	José Carlos Tudela Martins (Supervisor)