Agent skill

Company Valuation Methods

by HKUDS in HKUDS/Vibe-Trading

Walks through company valuation with DCF, dividend discount and sum-of-the-parts models, relative multiples, sensitivity tables and a valuation-trap checklist.

MITAuto-check passedBusiness, Finance & HR

Install Company Valuation Methods

skills CLI
$ npx skills add HKUDS/Vibe-Trading --skill valuation-model -a claude-code

Project install by default; add -g for ~/.claude/skills/.

GitHub CLI
$ gh skill install HKUDS/Vibe-Trading valuation-model --agent claude-code

Project scope by default; add --scope user for a personal install. Needs GitHub CLI 2.90.0 or later (public preview).

Manual copy
$ git clone --depth 1 https://github.com/HKUDS/Vibe-Trading.git skills-src && mkdir -p .claude/skills && cp -r skills-src/agent/src/skills/valuation-model .claude/skills/valuation-model && rm -rf skills-src

Use ~/.claude/skills/ instead of .claude/skills for a personal install. The folder must contain SKILL.md.

Claude Code skills documentation · loads skills from .claude/skills/

Facts

Skill name
valuation-model
GitHub stars
35k
Token cost
~2.2k tokens
SKILL.md length
509 words
Files
1
Skills in repo
89
Repo updated
First seen
Licence
MIT

At a glance

Walks through company valuation with DCF, dividend discount and sum-of-the-parts models, relative multiples, sensitivity tables and a valuation-trap checklist.

  • Works in 6 steps: DCF (Discounted Cash Flow) → DDM (Dividend Discount Model) → SOTP (Sum of the Parts) → …
  • Estimating a company's intrinsic value with a discounted cash flow model
  • SKILL.md covers Overview, Absolute Valuation Methods, Relative Valuation Methods and Valuation-Trap Detection, plus 3 more sections
  • Instructions only: no scripts, shell commands, URLs or credentials in SKILL.md

What it does

A valuation framework covering absolute methods (discounted cash flow, the dividend discount model and sum of the parts) and relative methods based on PE, PB and EV-EBITDA. The DCF section gives the formulas for enterprise, equity and per-share value, then walks through forecasting free cash flow, calculating WACC, estimating terminal value and building a sensitivity table of value per share against WACC and growth.

It includes reference WACC and beta ranges by industry for China A-shares, a two-stage dividend model with a checklist of when a company's payouts make it suitable, and the sum-of-the-parts method for diversified groups. The description also promises PE-band, PB-ROE and trap-detection material, but the excerpt is cut off before those sections.

When your agent uses it

  • Estimating a company's intrinsic value with a discounted cash flow model
  • Valuing a dividend-paying stock such as a bank or a utility
  • Valuing a diversified conglomerate segment by segment
  • Testing how sensitive a valuation is to WACC and terminal growth
  • Checking a cheap-looking stock for valuation traps

Example prompts

  • “Build a five-year DCF for this company and show a sensitivity table of WACC against terminal growth.”
  • “Would a two-stage dividend discount model suit this bank, and what value per share does it give?”
  • “Value this conglomerate by adding up its business segments and subtracting a holding-company discount.”

Workflow steps

6 steps, taken from the step headings in SKILL.md.

  1. DCF (Discounted Cash Flow)
  2. DDM (Dividend Discount Model)
  3. SOTP (Sum of the Parts)
  4. PE Band
  5. PB-ROE Matrix
  6. EV/EBITDA

What it can do on your machine

Read from SKILL.md and the folder at commit 14cabaf. It shows what the files ask for, not the result of running them.

  • Tool permissions

    Pre-approves nothing: there is no allowed-tools line, so your agent's usual permission prompts apply.

    From allowed-tools in the SKILL.md frontmatter.

  • Runs code

    No scripts in the folder and no shell commands in SKILL.md (its code samples are markdown).

    From the folder's file list and the shell code blocks in SKILL.md.

  • Network

    No URLs in SKILL.md.

    From URLs in SKILL.md, links to its own repository left out.

  • Credentials

    Names no API keys, tokens, secrets or passwords.

    From names ending in _API_KEY, _TOKEN, _SECRET, _KEY or _PASSWORD in SKILL.md.

Context cost

Company Valuation Methods loads about 2.2k tokens when it runs. Until then it costs about 47 tokens; SKILL.md has 509 words of instructions outside code blocks.

Always · name and description, kept in context so the agent knows when to use it
~47
When it runs · the whole SKILL.md, loaded when a task matches
~2.2k

Estimates: characters ÷ 4, the usual rule of thumb; real counts depend on the model's tokenizer. Scripts and assets cost tokens only if the agent reads them.

Safety

Auto-check passed

The automated check found no risky patterns in SKILL.md.

Automated static check — not a guarantee. Review scripts before installing. It scans the text of SKILL.md for risky patterns (piping downloads into a shell, reading credential files, hidden Unicode, destructive commands); files beside SKILL.md are not scanned.

SKILL.md

The full file from HKUDS/Vibe-Trading at commit 14cabaf, republished under its MIT licence (© HKUDS). 509 words, ~2,249 tokens.

Download SKILL.mdSave it as .claude/skills/valuation-model/SKILL.md (or your agent's skills folder).
name
valuation-model
description
Valuation methodology — absolute valuation with DCF / DDM / SOTP, relative valuation with PE-Band / PB-ROE / EV-EBITDA, sensitivity analysis, and valuation-trap detection.
category
analysis

Valuation Methodology

Overview

Systematic corporate valuation framework covering absolute valuation (DCF / DDM / SOTP) and relative valuation (PE / PB / EV-EBITDA), including sensitivity-analysis methods and a checklist for identifying valuation traps.

Absolute Valuation Methods

1. DCF (Discounted Cash Flow)

Core formulas:

Enterprise value = Σ FCF_t / (1+WACC)^t + TV / (1+WACC)^n
Equity value = enterprise value - net debt
Per-share value = equity value / total shares outstanding

Detailed steps:

Step 1: Forecast free cash flow (usually 5 years)
FCFF = EBIT × (1-tax rate) + depreciation & amortization - capex - increase in working capital

Simplified version:
FCFF ≈ operating cash flow - capex
YearRevenue (100m RMB)EBIT (100m RMB)FCFF (100m RMB)Growth
2026E1202418+15%
2027E1382821+15%
2028E1553124+12%
2029E1703426+10%
2030E1823628+7%
Step 2: Calculate WACC
WACC = E/(D+E) × Ke + D/(D+E) × Kd × (1-T)

Ke (cost of equity) = Rf + β × (Rm - Rf)
  - Rf: 10-year government bond yield (about 2.5% for China A-shares)
  - β: industry average or company beta (1.0-1.5)
  - Rm-Rf: equity risk premium (about 5-7% for China A-shares)

Kd: cost of debt (loan rate, about 4-5%)
T: income tax rate (25%)

Reference WACC ranges for China A-shares:

IndustryWACC RangeReference β
Consumer8-10%0.8-1.0
Technology10-13%1.2-1.5
Financials7-9%1.0-1.2
Cyclicals9-12%1.0-1.4
Utilities6-8%0.5-0.8
Step 3: Terminal Value
Perpetual-growth method: TV = FCF_n × (1+g) / (WACC - g)
  - g: perpetual growth rate (usually 2-3%, should not exceed GDP growth)

Exit-multiple method: TV = EBITDA_n × EV/EBITDA multiple
  - Reference the industry average or historical median
Step 4: Sensitivity Analysis
markdown
### DCF Sensitivity Analysis (per-share value, RMB)

| WACC \ g | 2.0% | 2.5% | 3.0% |
|----------|------|------|------|
| 9.0% | 32.5 | 35.8 | 40.2 |
| 9.5% | 28.3 | 30.8 | 34.0 |
| 10.0% | 24.8 | 26.7 | 29.1 |
| 10.5% | 22.0 | 23.5 | 25.3 |
| 11.0% | 19.6 | 20.8 | 22.2 |
2. DDM (Dividend Discount Model)

Applicable to: high-dividend stocks (banks, utilities, mature consumer companies).

Two-stage DDM:
P = Σ D_t / (1+Ke)^t + D_n × (1+g) / [(Ke-g) × (1+Ke)^n]

Gordon model (single stage):
P = D_1 / (Ke - g)

Applicability checklist:

  • Has paid dividends continuously for more than 3 years
  • Stable payout ratio (>30%)
  • Strong earnings predictability
  • Usually not suitable for high-growth stocks (no dividends / low payout)
3. SOTP (Sum of the Parts)

Applicable to: diversified conglomerates.

Group value = Σ valuation of each business segment + net cash - holding-company discount

Example (a group company):
| Segment | Revenue (100m RMB) | Valuation Method | Valuation (100m RMB) |
|------|---------|---------|---------|
| Baijiu | 80 | 30x PE | 600 |
| Real estate | 50 | 0.6x PB | 120 |
| Financials | 30 | 1.0x PB | 200 |
| Total | | | 920 |
| Holding-company discount | | -15% | -138 |
| Group valuation | | | 782 |

Relative Valuation Methods

1. PE Band
Historical PE percentile analysis:
- Take the past 5 years of PE_TTM time series
- Compute the 10% / 25% / 50% / 75% / 90% percentiles
- Judge overvaluation / undervaluation from the current PE percentile

| Percentile | PE | Implied Price | Interpretation |
|------|-----|---------|------|
| 90% | 35x | 52.5 | Severely overvalued |
| 75% | 28x | 42.0 | Rich |
| 50% | 22x | 33.0 | Fair |
| 25% | 16x | 24.0 | Cheap |
| 10% | 12x | 18.0 | Severely undervalued |
| Current | 18x | 27.0 | Cheap (30th percentile) |
2. PB-ROE Matrix
Theoretical relationship: PB = (ROE - g) / (Ke - g)
Practical use: plot companies in the industry on a PB vs ROE scatter chart

| Quadrant | PB | ROE | Interpretation |
|------|-----|-----|------|
| Lower right | Low PB | High ROE | Undervalued (best buy zone) |
| Upper right | High PB | High ROE | Fair (quality premium) |
| Lower left | Low PB | Low ROE | Value trap or distressed turnaround |
| Upper left | High PB | Low ROE | Overvalued (avoid) |
3. EV/EBITDA
EV = market cap + net debt (interest-bearing debt - cash)
EBITDA = operating profit + depreciation + amortization

Advantages:
- Removes capital-structure differences (vs PE)
- Removes depreciation-policy differences
- Suitable for asset-heavy industries (telecom / energy / infrastructure)

Reference EV/EBITDA ranges by China A-share industry:
| Industry | Median | Undervalued | Overvalued |
|------|--------|------|------|
| Consumer | 15-20x | <12x | >25x |
| Technology | 12-18x | <10x | >22x |
| Energy | 6-10x | <5x | >12x |
| Utilities | 8-12x | <6x | >15x |

Valuation-Trap Detection

Top 10 Valuation Traps
#TrapDetection MethodTypical Example
1Low-PE cyclical at the peakPE is lowest when earnings are highest and about to fallCoal at 5x PE in 2021 was the top
2High-PE growth can be justifiedPEG < 1 means the growth rate supports the valuation30x PE + 40% growth = PEG 0.75
3Low-PB value destructionSustained ROE < Ke means shareholder value is being destroyedLong-term loss-making asset-heavy company
4Goodwill bombGoodwill / net assets >30% implies impairment riskUnderperforming acquisition after paying a high premium
5Accounts-receivable trapRising receivables / revenue ratio = poor revenue qualityGovernment receivables + high customer concentration
6Capitalization trapCapitalizing R&D / interest flatters profitPE doubles after true expensing
7One-off gainsLarge gap between recurring net profit and reported net profitAsset sales / government subsidies boost earnings
8Share dilutionStock options / convertible bonds reduce EPSPE should be based on diluted EPS
9Related-party transactionsBuy cheap from related parties / sell high to themProfit shifted outside the listed entity
10FX swingsHigh overseas-revenue share means large currency sensitivityRMB appreciation erodes exporter profits
Show full SKILL.md (131 more words)Show less

Analysis Framework

Valuation-Method Selection Decision Tree
What type of company is it?
├── Mature and stable (consumer / utilities / banks)
│   ├── High dividend -> DDM
│   └── Low dividend -> DCF + PE Band
├── High growth (tech / pharma / new energy)
│   └── DCF (high-growth phase) + PEG + PS
├── Cyclical (coal / steel / nonferrous)
│   └── PB + EV/EBITDA (avoid PE)
├── Diversified conglomerate
│   └── SOTP
└── Loss-making company
    └── PS (price-to-sales) + EV/Sales
Cross-Validation
Use at least 2 valuation methods and take the middle value:
1. DCF -> intrinsic value
2. Comparable PE -> market pricing
3. If the difference >30% -> check whether assumptions are reasonable

Output Format

markdown
## Valuation Analysis: [Company Name / Code]

### Valuation Summary
| Method | Per-Share Value | Weight | Notes |
|------|---------|------|------|
| DCF | ¥32.5 | 50% | WACC=10%, g=2.5% |
| Comparable PE | ¥28.0 | 30% | Industry average 22x, EPS=1.27 |
| PB-ROE | ¥30.0 | 20% | Fair PB=2.5x |
| **Composite Target Price** | **¥30.8** | | Current price 25.0, upside +23% |

### Sensitivity Analysis
[WACC vs growth-rate matrix]

### Valuation-Trap Check
- [x] Is PE a falsely low cyclical peak? -> No
- [x] Goodwill / net asset ratio -> 12%, safe
- [x] Receivables / revenue trend -> Stable, not deteriorating
- [ ] Gap in recurring net profit -> 15% difference, subsidy dependence worth attention

### Investment Rating: Buy
Target price ¥30.8, current price ¥25.0, upside 23%

Notes

  1. DCF is highly sensitive to assumptions: a 1% change in WACC can move valuation by 20%+, so sensitivity analysis is mandatory
  2. Comparable companies must truly be comparable: same industry + same scale + same stage; do not apply leader PE multiples to small companies
  3. China A-share valuation system is unique: shell value / liquidity premium / policy premium mean US-equity standards cannot be copied directly
  4. Valuation is not a target price: markets can remain irrational for a long time, and valuation is an anchor, not a trading signal
  5. Special handling for cyclicals: use normalized earnings (mid-cycle earnings), not current earnings
  6. Not suitable for cryptocurrencies: traditional valuation frameworks do not apply to BTC / ETH; use on-chain metrics instead (see onchain-analysis)

© HKUDS, MIT. Rendered from Markdown: HTML in the file is shown as text, images as links, and headings moved down two levels. Raw file

Files

Just SKILL.md in agent/src/skills/valuation-model of HKUDS/Vibe-Trading.

Open the folder on GitHubat commit 14cabaf

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Questions about Company Valuation Methods

What does Company Valuation Methods do?

Walks through company valuation with DCF, dividend discount and sum-of-the-parts models, relative multiples, sensitivity tables and a valuation-trap checklist. A valuation framework covering absolute methods (discounted cash flow, the dividend discount model and sum of the parts) and relative methods based on PE, PB and EV-EBITDA. The DCF section gives the formulas for enterprise, equity and per-share value, then walks through forecasting free cash flow, calculating WACC, estimating terminal value and building a sensitivity table of value per share against WACC and growth.

When should I use Company Valuation Methods?

Company Valuation Methods fits situations like: estimating a company's intrinsic value with a discounted cash flow model; valuing a dividend-paying stock such as a bank or a utility; valuing a diversified conglomerate segment by segment; testing how sensitive a valuation is to WACC and terminal growth.

How do I install Company Valuation Methods in Claude Code?

Run `npx skills add HKUDS/Vibe-Trading --skill valuation-model -a claude-code`. Or copy the skill folder (agent/src/skills/valuation-model in HKUDS/Vibe-Trading) into .claude/skills/valuation-model in your project. Claude Code loads it when a task matches its description.

How do I install Company Valuation Methods in Codex?

Run `npx skills add HKUDS/Vibe-Trading --skill valuation-model -a codex`. Or copy the skill folder (agent/src/skills/valuation-model in HKUDS/Vibe-Trading) into .agents/skills/valuation-model in your project. Codex loads it when a task matches its description.

Can I use Company Valuation Methods in Cursor, Gemini CLI or GitHub Copilot?

Cursor, Gemini CLI, GitHub Copilot and OpenCode also load SKILL.md folders. With the skills CLI, run `npx skills add HKUDS/Vibe-Trading --skill valuation-model -a cursor` (or -a gemini-cli, github-copilot or opencode for the others). To copy it by hand, put the folder in .cursor/skills/valuation-model, .gemini/skills/valuation-model, .github/skills/valuation-model and .opencode/skills/valuation-model in your project.

What does Company Valuation Methods need to run?

SKILL.md names no scripts, command-line tools or credentials: Company Valuation Methods is instructions for the agent only.

Does Company Valuation Methods access the network?

SKILL.md contains no URLs. Any network use would come from the scripts or tools the agent runs. This is read from the text; nothing was executed.

Is Company Valuation Methods safe to install?

Our automated static check of SKILL.md found no risky patterns, such as piping downloads into a shell, reading credential files or hidden Unicode. It is not a guarantee. Review the folder before installing.

What licence does Company Valuation Methods use?

Company Valuation Methods is published under the MIT licence (the repository's licence). It allows redistribution, so the full SKILL.md is shown on this page.

How many tokens does Company Valuation Methods use?

About 2.2k tokens (SKILL.md is roughly 9k characters). Agents keep only the skill's name and description in context until a task matches; then they load SKILL.md in full.

What are the alternatives to Company Valuation Methods?

Skills that share tags, products or a category with Company Valuation Methods: Three-Statement Model Builder (ginlix-ai/LangAlpha, 1.8k stars), Money Finance (iamzifei/show-me-the-money, 1k stars), Financial Model Checker (ginlix-ai/LangAlpha, 1.8k stars) and DCF Model Builder (ginlix-ai/LangAlpha, 1.8k stars). The comparison table on this page puts their stars, adoption, token cost, safety result and licence side by side.

Who maintains Company Valuation Methods?

HKUDS (a GitHub organization) maintains it in HKUDS/Vibe-Trading, which has 34,949 GitHub stars. The repository holds 89 skills in this directory. The repository was last updated on October 8, 2026.

Source: HKUDS/Vibe-Trading on GitHub. Facts on this page come from the repository at the commit we read; the author's words are quoted as theirs.