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QuestionsCategory: Valuation QuadrantDifferent currency for share price and reported results
Leon Ng asked 1 year ago

Hi Victor / Rusmin,
I am looking at a Thai company that is trading in SGX and SET, and present their annual report in Baht.
If I want to evaluate them to determine their intrinsic value, do I use the SGX or SET share price for the analysis if I intend to buy into them in SGX subsequently
Also, if I use the SGX price, do I need to convert it to Baht using the prevailing exchange rate to ensure that the comparison is consistent with the reported results in Baht?
Thank you!

1 Answers
Victor Chng answered 1 year ago

Hi Leon,

1.If you are intending to purchase in SGX then you have to use the SGX share price.

2.You don;t need to convert the BAHT to SG when looking into the financial but you need to convert your EPS to SG when you are plotting the PE chart to get the intrinsic value. Do note that you need to convert the forex based on that year exchange rate. For instance, your figure have 5 years, 2015-2019 then you have to find out the rough exchange rate for SG/THB in all those 5 years.

Leon Ng replied 1 year ago

Hi Victor,

Thank you for the clarifications!

Just to clarify on the second point, am I right to say that I will need to find the average exchange rate for each year, and do the conversion accordingly for each of the years before finding the average EPS across the analysis period?

Victor Chng replied 1 year ago

Yes you are right.

Leon Ng replied 1 year ago

Hi Victor,

Thanks for confirming!

Victor Chng replied 1 year ago

Welcome :)