Valuation of Novavis Group: DCF Method and Comparative Analysis
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Valuation
We base our valuation of Novavis Group on a 50% discounted cash flow method and a 50% comparative valuation.
Relative valuation
In the relative valuation, we seek to compare Novavis' performance to companies operating in the renewables industry, developing photovoltaic and wind projects. The comparative group includes entities with global scale and long history, so we decide to apply a 50% discount to listed companies in the industry. Many of the risks regarding the project schedule are outside Novavis (e.g. environmental permits, grid connections, construction permits).
DCF valuation
- 5-year forecast period.
-Risk-free rate of 6.5% (yield on 10-year government bonds).
- In valuation, we take net debt as of end-2023.
- Beta 1.2 risk (delay of environmental permit, grid connection, construction permit).
