The valuation of a business can be difficult to calculate because there are many ways to calculate it.

Capital investment in a company is based on the rate of return, and when a company has begun to make a profit, you can see how much the dividend after the investment is.

Take Apple, for example, with a quarterly profit of $3 billion, which is $12 billion a year. Then, 100% of the shares can get $12 billion in dividends every year. In this case, the valuation range is between $60 billion and $120 billion.

The reason for such a big gap is that investors have different requirements for return on investment.

Some investors think that the annual return rate of 10% can be satisfied, then, he will recognize the valuation of 120 billion US dollars, because he invests in shares according to the valuation of 120 billion US dollars, no matter how many shares, the annual dividend can reach 10% of the investment amount, and he can return to the capital only by dividends in ten years, and his principal is still there.

Some investors believe that the return on investment should reach 20%, in which case, they believe that Apple's valuation is only $60 billion. Because if you invest in Apple according to this amount, the annual dividend is 20% of the amount he invested. It takes five years to be able to pay back the principal, and again, the principal is always there.

However, this method is only the most basic method, and it also needs to consider the factors of Apple's listing and profitability improvement.

During the corporate financing period, investors start with a rate of return of 10%, but for ordinary shareholders, their demand for a return on investment only needs to be higher than the bank's interest rate.

And this demand for return on investment is the reason why companies can achieve a much higher market value than the valuation represented by their profitability after listing.

Of course, there is another reason that shareholders are like speculating in real estate, they do not want the rent after buying the house, which is equivalent to the profit dividend of the company. They want the future value of the house, and when the value is high, they can sell it.

It is believed that Apple's future market value can reach $500 billion, so as long as Apple's market value is less than $5,000, there will be people willing to buy Apple's shares and wait for the day when the value appreciates and sell them.

And this is also the reason why Wen Ming dared to expose Apple's $150 billion valuation, which is only worth $120 billion according to the 20% rate of return, but I will definitely be more valuable in the future, so it is already very benevolent to only increase the valuation of $30 billion when it is not listed.

Of course, the main reason is that in the financing market, even if someone thinks that you will be more valuable in the future, they will not invest because they don't have that much money to invest.

(PS: I didn't want to explain this because I didn't understand it either.) But some bosses think Apple's current valuation of $150 billion is too high. And Tesla will also have a high valuation now, so explain some of the reasons for the increase in valuation and market capitalization that I understand, please don't spray professionals. ）

"So, Mr. Moretz, how much do you think Tesla can be valued right now?"

Moritz frowned, the vehicle test was not over yet, and Wen Ming pulled him away. In fact, his idea is the same, after looking at the main three factors: speed, range, and charging time, other aspects are actually irrelevant.

Not to mention that with Apple joining, even the former Tesla can do a good job in other aspects.

"I don't think I can decide on Tesla's valuation right now, so I need to go back to the company."

Even as a boss, he can't decide such a big thing with a pat on his head, unless he has the ability to 'daydream' as a confidence like Wen Ming.

Wen Ming laughed and said, "Then thank you Mr. Moretz for coming, I hope that even if we can't reach a cooperation, we can solve the matter of that factory perfectly." ”

After a polite exchange, Wen Ming did not leave Moretz to eat, and Moretz did not mention Wen Ming's dinner. Compared with getting emotionally through eating, it is most important to figure out the true valuation of Tesla now, because as long as Tesla releases that new car to the outside world, even Sequoia Capital will be difficult to catch Wenming's car.

Moretz, who returned to Sequoia Capital, immediately called a high-level meeting and told everything he saw.

Not to mention the shock of the participants, the chief analyst was very professional and began to analyze with his team in addition to the shock.

"At present, the global market demand for pure electric sports cars should only be about 100,000 units per year. However, we need to take into account the increase in the demand for this market for Tesla's new cars. ”

Market demand is not fixed, some companies develop production and sales strategies because of market demand, while some companies can change market demand through their own products. Whether it's Apple or Tesla, it is, or will be, such a business.

"Apple's industrial design concept is very powerful, and the root of this design concept is in Wenming's body. Therefore, even if Wenming's acquisition of Tesla is not Apple's acquisition of Tesla, there is no difference at all to Tesla's industrial design improvement, coupled with Wenming's technical level in software and digital hardware, it is completely foreseeable that Tesla's central control system, model appearance, and even its lights will become the top level in the industry. ”

Buying a car is not only based on performance, but also on appearance, even if it can run into 3 seconds of supercar, it is too ugly and not many people will buy it.

The chief analyst concluded: "Coupled with Tesla's price advantage, we believe that Tesla's annual sales can be increased to 150,000." This is only this year's data, and as Tesla's sales increase, the market in this area will gradually increase. ”

"The most important thing is that Tesla is a pure electric vehicle, which can pass the new energy subsidy regulations of many countries, including our Western countries such as the United States, as well as Huaxia, the largest car market in the future. And this kind of subsidy can influence many people's choices when buying a car. ”

It is impossible for investment banks not to understand the policies of various countries, otherwise the enterprises they invest in are not allowed by the policies, and they will lose a lot of money.

Or, when a country begins to regulate a certain industry, and they do not understand the direction of regulation, it is almost equivalent to looking for death.

A discussion began in the conference room, but after the discussion, no one denied the report of the lead analyst.

Moretz asked, "So, what do you think Tesla's valuation can reach now?" ”

The lead analyst replied: "Considering that Tesla's current supply capacity is seriously insufficient to make 150,000 Tesla vehicles in one year, we think they can make a profit of $2.5 billion this year." At this level of profitability, we believe they can reach a valuation of $12.5 billion. ”

"But given Tesla's abundant cash flow and market development over the next three years, we think they should be able to reach a valuation of $20 billion."

"And the key condition for us to be able to take a stake in Tesla is that we have mastered a car production plant."

The $20 billion valuation surprised everyone present, not because they thought Tesla was more than that, but because two weeks ago, Tesla was only worth $500 million and was even at risk of bankruptcy.

However, two weeks after Wen Ming acquired Tesla, the valuation has jumped to $20 billion.

This is still because they Sequoia have too high requirements for returns, and if they are small venture capital companies, they will directly give up their shares in Tesla because of the high valuation.

Moretz asked, "If we invest in Tesla, what is the expected rate of return when it goes public?" ”

The chief analyst replied: "If Tesla goes public within three years, then our return on investment will be able to get a 500% cash return in addition to a dividend return of about 50%. In other words, Tesla's market value after listing can reach $100 billion, becoming the second car company in the world with a market value of more than $100 billion. ”

Even the person in charge of Fund 8, who has always wanted to invest in Tesla, was surprised and asked: "Even if their sales increase to 150,000 units per year, it is impossible to surpass car companies such as Daimler, Volkswagen, and BMW in terms of total sales, how can they exceed the market value of these companies?" ”

"Because in addition to sales and earnings, they also have a future, and in the future, new energy vehicles will definitely replace fuel vehicles," said the chief analyst. ”