Marvipol Development Valuation: SOTP, DDM, and Multiples Approach

We value Marvipol Development using the SOTP method (80% weight) and discounted dividend method (weight of 20%). We add a multiples valuation for presentation purpose only.

 

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SOTP valuation

SOTP method is, in our view, the most appropriate valuation approach in the case of Marvipol Development. We use a DCF valuation to estimate the residential segment EV (see more details below). Regarding the logistics division, we calculate its value taking into consideration the market value of existing projects (in Warsaw, Poznan and Wroclaw), adjusted for MVP’s share in equity, and book value of planned projects (in Katowice and Lodz). We adjust the sum of values of both segments by 2022 net debt.

We base our DCF valuation of the residential segment on our free cash flow forecasts for 2023E-32E (for more details please refer to the “Financial forecasts” section). We apply a riskfree rate based on 10Y governmental bonds in forecasted years and in terminal, equity risk premium at 5.5% and beta of 1.0x and assume a terminal growth rate of 1.0%.

 

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