NAV in Company or group when calculating valuation ?

[cfa]

When we buy into a stock , which should we base on , NAV of company or group as guild line ? Because some NAV at company level and group level can be very far apart . Thanks.

[dzwm87]

Most of the time - NAV of the Group - since you are invested in the Group itself. The NAV for both can be very different if the Company is a holding co for a lot of subsidiaries.

Have not seen the other case before though.

[opmi]

Group NAV can be less than Company NAV if there is big net liabilities value (NLV?) to offset the other subsi's NAV.

[FatBoi]

Group NAV can be less than Company NAV if there is big net liabilities value (NLV?) to offset the other subsi's NAV.

Hi opmi, to clarify your point. The NLV you mentioned is sitting in Subsi A which offsets NTA (net tangible assets) of Subsi B. Hence when consolidated at group level, the Group might have an overall lower NAV position compared to Company. Right?

Took me a while to figure out if that's what u are implying. hahah!

Anyway, this situation of NAV at Group being disparate from Co is more common if the Co is a non-operating entity, more investment holding. Hence at Group level, subsidiaries' figures would take up significant piece.

[opmi]

Group NAV can be less than Company NAV if there is big net liabilities value (NLV?) to offset the other subsi's NAV.

Hi opmi, to clarify your point. The NLV you mentioned is sitting in Subsi A which offsets NTA (net tangible assets) of Subsi B. Hence when consolidated at group level, the Group might have an overall lower NAV position compared to Company. Right?

Took me a while to figure out if that's what u are implying. hahah!

Anyway, this situation of NAV at Group being disparate from Co is more common if the Co is a non-operating entity, more investment holding. Hence at Group level, subsidiaries' figures would take up significant piece.

Yes. Company itself may be operating and has its own balance sheet.

But so far. never seen a Group with negative NAV, but Company with positive NAV. I assume writedown of a big acquired subsidiary would have this impact. Maybe dotcoms should have some of these.

[FatBoi]

Maybe very soon, StarHub will be an example where on the Group basis, the net assets might turn into net liabilities position. Check out their balance sheet - http://infopub.sgx.com/FileOpen/3Q2013.a...eID=263119

[cfa]

Thanks for all the sharing.
We should base on which NAV to know the actual NAV of the listed share , Group or company ?

[opmi]

Should base on RNAV. book value can only be
first filter. Some companies like to write down
their properties jialat jialat. Book NAV not representative.

[cfa]

Should base on RNAV. book value can only be
first filter. Some companies like to write down
their properties jialat jialat. Book NAV not representative.

RNAV of the group or company ?

[opmi]

Should base on RNAV. book value can only be
first filter. Some companies like to write down
their properties jialat jialat. Book NAV not representative.

RNAV of the group or company ?

Interesting question. I would say RNAV of the Group.

But can RNAV be negative? Meaning liabilities more than assets.
If subsi liability has no recourse to parent, then subsi RNAV is zero then
subsi RNAV no impact on Group RNAV

If parent liable to subsi via guarantee or legal, the subsi RNAV can be negative
and reduce total Group RNAV on a consolidated basis.