Valtech Valuation Launches Efficient System for Valuation of Employee Stock Options and Convertible Bonds
HONG KONG, July 19, 2021 / PRNewswire / – Listed companies as well as new start-ups often grant stock options to their management team and key employees as an incentive. These incentives, formally known as employee share ownership plans (“ESOP”) or employee share ownership options (“ESO”), have accounting impacts that would affect company profits and losses.
To assist management with overcome These hassles, Valtech has developed online channels allowing customers to make a preliminary assessment of their ESOP potential. Through the user-friendly interface, users can enter some basic parameters (e.g. stock price, vesting period, ESOP strike price, dilution factor and sub-optimal factor), from which the model will instantly generate preliminary results. The financial controller or CFO of a company can immediately assess the potential impact on profit or loss of issuing such equity-linked instruments.
Another extensive application is developed for convertible bonds or notes. Convertible bonds (“CB”) are often issued by companies as a means of raising capital. Since CB holders can convert their CBs into company shares when the share price exceeds the strike price, which is a preferred feature for CB holders, the interest rates offered by issuers are generally lower than those of conventional corporate bonds. As such, CB has become a common funding tool, especially for start-ups with little capital but huge growth potential.
Automated system supplemented by human support
Both stock options and collateral obligations contain derivative components that require advanced financial models to calculate their fair value. Managers, while having in-depth knowledge of accounting and finance, often find it tedious to understand the workings of these models during their planning phase of the ESOP and CB assessment.
Valtech includes that an instant result is not sufficient for management to make a comprehensive decision, of the society platform, sensitivity analysis is also provided so that users can make an informed decision. Although users can perform their preliminary assessment independently, if they are in doubt or need a more in-depth consultation of the experienced evaluation team, they can send instant online message to the company. the consultants will generally respond immediately during office hours.
How to access?
Customers can take advantage of such a service by engaging Valtech in a typical ESOP / ESO or CB assessment service and then they can take advantage unlimited testing and use of the online tool at the pre-issuance stage. Customers can also contact the Valtech evaluation team directly for more specific pre-issue support.
Max Tsang, Director of Valtech Valuation, aims to reshape the company’s valuation solution service with in-house developed technology. He said: “We have never stopped investing and participating in the development of innovative and practical technological tools to improve the quality and efficiency of our service. Full automation is still immature as most of our clients still prefer quick support from financial professionals. will benefit from the support of new customers. We will continue to inject technological elements into our assessment work.
Matthew Leung, the person responsible for this innovative project, said, “In our constantly changing business environment, management often has to make a decision within a tight deadline. Hiring a professional appraiser through the traditional channel often takes days or even weeks to complete an initial appraisal and these services are not free. Now with the help of technology, we can offer our customers a approach measure the accounting impact of their corporate actions. “
About Valtech Valuation and Valtech Corporate Services
Established in 2018, the combination of technology and valtech valuation has shaped competitive valuation solutions and gained the support of over 100 listed companies in Mainland China and Hong Kong. Valtech relies on a team of valuation veterans and a network of consultants with multidisciplinary specialties, such as qualified valuers and surveyors, quantitative modelers and risk specialists. Our team has a strong track record of providing reliable, responsive and responsible opinions, especially in the complex real world situation where multiple agendas are involved. For most engagements, we are committed to organizing at least one CFA charter holder and one CPA holder to ensure that your needs are always heard and addressed.
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SOURCE Valtech Evaluation Advisory Limited