1. OVERVIEW OF LATEST INVESTMENT WRITE-UPS
BY ALEXEY MINEEV AND THE PERFORMANCE
May 22nd 2011 and follow-up on July 6th 2011: Short in Suntech Power Holdings Co. Ltd. (ADR) (NYSE:STP) at $7.5 with target
$5.5. In October - December 2011 the stock traded at ~$2.5 (-60%+)
In June 2011 Alexey recommended closure of a long position in Shutterfly, Inc. (NASDAQ:SFLY) at $55 to a hedge fund in
NYC – reasoning & model are available to review. By February 2012 the stock lost 50+% its value. (Disclosure: Alexey has no
obligation before the fund to keep the research’ findings exclusive)
August 7th 2011: Oversold buy in MEMC Electronic Materials, Inc. (NYSE:WFR) at $5.5 with 20% upside. The stock realized
the 20% upside by pushing level $7.0 over 3 months-long span (August - October 2011) after the market call
August 20th 2011: Short in Chesapeake Energy Corporation (NYSE:CHK) at $29.3 with 20% downside target realized within 2
months after the call. In December 2011 - January 2012, CHK traded at ~$23
December 9th 2011: Buy in First Solar, Inc. (NASDAQ:FSLR) at $46 with 30% upside. In April 2012 the stock sold off lower
than $30 level, and Alexey keeps to the thesis
February 23rd 2012: R.R.Donnelley & Son Company (NASDAQ:RRD) is a buy at $13.5 with ~20% short-term target at $16. On
April 2nd 2012, RRD traded at $12.3
The following 6 pages present the above mentioned investment write-ups
2 April 2012

2. Suntech (STP) is a short with a target at ~$5.5, the 2009 low
Thesis:
Suntech (STP) is a short because The below three factors make me think that the average-over-year module price might easily be 20% lower than that in 2010, and this
2011 EPS could easily be zero implies a collapse of Suntech’s EPS to zero while heavy debt will be hindering further production expansion and thus EPS recovery:
rather than consensus expected Solar panel manufacturers keep building manufacturing capacity. While the world photovoltaic (PV) market is expected to
$1.1. Relative to similar-size number 13GW-21GW new built solar parks vs. 16.6GW in 2010, solar module manufacturers plan to expand manufacturing
Chinese YGE and TLS, STP has capacity in 2011 – YGE by 70%, TSL by 58%, and STP by 33%. STP plans to ship 2.2GW modules in 2011 vs 1.6GW in 2010.
higher cost per module (even after Current hypothesized rampage in Germany for remaining high FiTs for <1MW will lead up to new cuts in FiT, and the
~$100M savings in 2011 due to cuts will drive module prices further down. Germany made up 45% of world PV market (7.4GW out of 16.6GW), and the
1,000 MW internal wafers European PV Industry Association now expects only 3GW-5GW new parks in Germany in 2011. According to Morgan Stanley’s
production). This will translate into report as of May 19th,Tier 1 Chinese module producers are selling modules at €1.10-1.20/W ($1.54-1.68/W) vs. $1.75-1.85/W in
shrinkage in the gross margin in the 2010 – only 10% price decrease, and so modules’ price does not seem to have dropped off the cliff yet. Hence, there is a high
environment when 2011’s demand probability that developers are now rushing to secure spots in Germany, the biggest market, propping the demand for now. If
on solar modules will likely stay at so, H1 2011 will likely see a high level of installations in Germany with a resulting big cut in Germany’s FiT in the summer.
the same level as in 2010 The actual 2011 demand on modules could be 1.6GW lower than 2010’s 16.6GW. 18.2GW, Solarbuzz’s figure for 2010 PV
(continuous European credit jittery & market, vs. the 16.6GW figure published by European PV Industry Association in May 2011 might represent 1.6GW installed in
the austerity measure theme and 2010 but grid-connected only in 2011. If so, the 16.6GW level for the 2011 PV market implying a flat demand might be actually
retroactive cuts in FiT in Czech Rep. 1.6GW lower, because the 1.6GW of new-built PV parks might have been already in place at the beginning 2011.
and Spain hobbled the industry Catalysts: the cut in Germany’s FiT in summer / fall 2011, drop in demand on modules/price decrease, worsening of European credit;
growth) and when solar panel Risks: Suntech’s costs decrease by more than 15%, super strong demand on PV in the US where Suntech is growing.
Yingli Green Group (YGE) 2007 2008 2009 2010 2011E change 2009 2010 2011E 2009 2010 2011E
manufacturers keep expanding their Manufacturing capacity, MW 200 400 600 1,000 1,700 Revenue, $M 1,693 2,902 3,256 Asset turns 0.5x 0.7x 0.7x
Selling price, $/Watt 3.92 3.94 2.02 1.79 1.42 (20%) COGS 1,355 2,398 2,869 Cash 833 873 343
Cost, $/Watt 3.00 3.09 1.55 1.19 1.06 (11%) Gross margin 339 504 387 Net Debt 645 1,243 1,243
manufacturing capacity Gross Margin 23.6% 21.6% 23.6% 33.2% 25.4% (24%) 20.0% 17.4% 11.9% EBITDA 240 345 209
Trina Solar (TSL) SG&A 165 244 274 Net Debt/EBITDA 2.7x 3.6x 6.0x
Manufacturing capacity, MW 150 350 600 1,200 1,900 9.7% 8.4% 8.4%
Selling price, $/Watt 3.97 4.14 2.12 1.76 1.42 (19%) EBIT 174 260 113
Alex Mineev Cost, $/Watt 3.08 3.32 1.52 1.20 1.06 (12%) Interest expense 103 100 100 Diluted EPS sensitivity table:
Alexey.Mineev.WG09@gmail.com Gross Margin 22.4% 19.8% 28.1% 31.5% 25.4% (19%) Non-op. loss (18) (101) –
Suntech Power (STP) Income before tax 88 262 14 Module price decrease
+1.267.230.7772 Manufacturing capacity, MW 540 1,000 1,100 1,800 2,400 Income tax 3 24 1 -15% -20% -25%
cost per W
decrease
May-22nd, 2011 Shipped, MW 364 496 704 1,572 2,200 40% 2.8% 9.1% 9.1% -12% $0.59 ($0.35) ($1.40)
Selling price, $/Watt 3.70 3.88 2.41 1.85 1.48 (20%) Net Income 86 238 13 -15% $1.02 $0.07 ($0.98)
Cost, $/Watt 2.95 3.19 1.92 1.53 1.30 (15%) Diluted shares, M 173 182 181.6 -18% $1.58 $0.63 ($0.42)
Gross Margin 20.3% 17.8% 20.0% 17.4% 11.9% (32%) EPS 0.50 1.31 0.07

3. Musings on Suntech’s going internal wafer-manufacturing: by the end of 2011 50% of wafers are
to be produced internally - so what would change if 100% wafers were produced internally?
Thesis: To estimate costs improvement for Suntech (STP) if they go 100% internal wafer-manufacturing, I used the capital turnover
Investment cost of wafer of Sumco Corporation (Japan), a major, 100%-focused on crystalline silicone wafers manufacturer. The financials of Chin
Etsu (Japan) were used to double check.
manufacturers does not imply
substantial costs improvement if STP is expected to have 40-50% wafers internally manufactured by the end of 2011, producing ~2,200MW solar panels in
Suntech (STP) goes 100% 2011. $100M worth of savings is expected due to the ramping up of internal wafer-manufacturing in 2011 to ~1,100MW.
internal wafer-manufacturing Therefore, ~1,100MW wafers have yet to be internally produced for the company to achieve 100% internal wafer-
manufacturing. Assuming 0.5$/W wafer pricing and 30% gross margin for a wafer-manufacturing business, I come to 0.5
$/W x 1,100 W x 30% = $165M annual savings before investment cost. Using 2010’s price of wafer at 0.8$/W, I estimate
total outlay at $1,260M for 1,100MW wafer manufacturing capacity based on capital turnover x0.7, a figure more optimistic
than that for Sumco. Spreading out over 20 years at 8% WACC the $1,260M investment outlay plus $120M one-off cash
expense related to the-other-day termination of the 10 years agreement under which MEMC would provide 4.6GW wafers
through 2016 otherwise, I come to $140M worth of annualized, effective investment cost. (Worth mentioning, SunEdison, a
solar park developer, is MEMC’s 100% sub, and the terminated agreement used to situate Suntech in the midst of MEMC’s
value chain) Taking $140M worth of annual investment cost out of the $165M annual savings before investment cost, we
are left with only $25M worth of annual effective costs saving coming from 100% internal wafer. Even if we add $100M
worth of expected costs savings in 2011 to $25M, the total effective savings in the amount of $125M translate to $125M /
2,200MW = 0.06$/W. This is much smaller than 2010’s costs disadvantage on order of 0.3$/W.
Sumco Corporation (Japan) Shin Etsu (Japan)
100% Crystalline silicon business 1) 300mm-200mm wafers for semiconductors Specialty chemical company: (Semiconductor silicone 27%)
Alex Mineev 2) wafers for solar and high-purity quartz crucibles
Alexey.Mineev.WG09@gmail.com 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010
+1.267.230.7772 Sales, B¥ 319 475 392 218 277 1,304 1,376 1,200 916 1,058
July-6th, 2011 COGS 204 288 306 274 254 933 947 853 700 803
Gross Margin 115 187 86 -56 23 371 429 347 216 255
36% 39% 22% (25%) 8% 28% 31% 29% 24% 24%
Disclaimer: The write-up does not
EBITDA 129 207 136 37 73 397 453 373 220 258
involve any inside information the 40% 44% 35% 17% 26% 30% 33% 31% 24% 24%
author might hold nor related to the PP&E 307 402 437 334 256 545 654 610 646 620
full-time job the author currently Capital 463 546 597 584.4 481 1,404 1,516 1,431 1,494 1,483
engage in. The write-up was not Capital turnover 1.0x 0.7x 0.4x 0.5x 1.0x 0.8x 0.6x 0.7x
assigned by any party and created by Unlevered NI 84 27 (52) 13 154 186 151 79 99
ROIC 18.1% 4.9% (8.6%) 2.3% 13.2% 10.0% 5.5% 6.6%
the author on his own initiative.

4. Consideration of the below factors makes me think that MEMC is oversold with 20% upside:
MEMC is effectively no-leverage company trading at a value comparable to the last three years’ worth of
Capex, Investments, Acquisitions, and Cash & WC net of Debts. Having $1.28B worth of market cap at x0.68 of
TBV, MEMC has $1.34B worth of last three years’ investments and Cash & WC net of Debts. Also, even having issued
$0.55B debt in 2011Q1, MEMC is effectively unlevered. Even not accounting for the $215M net asset value of solar
energy systems, Current Assets net of Current Liabilities less Debt & Pension obligations come up to positive $50M.
20% conservative equity upside: While MEMC’s business consists of semiconductor materials, solar materials, and
solar park development, the semiconductor materials part generates $80-100M EBIT per annum and this translates to
$0.5B valuation based on x10 multiple on earnings. After taking out $290M worth of Korea 300mm & IPOH investment
from the $0.5B to avoid double counting and adding up with 3 years’ worth of investments, solar energy system value,
and Current Assets net of Current Liabilities net of Debt & Pension obligations, we come to $1.55B, a value 20%
greater than the current $1.28B market cap. I use the $1.55B as a conservative target equity value, keeping it in
perspective that before the 3 year worth of investments was in place - 2008 Revenues had been already at level $2B.
The $1.55B target equity squares with a 5% net profit margin assumption for a wafer manufacturing business.
MEMC has to eke out 5% net profit margin on $3B revenue estimate to live up to the $1.55B equity target based x10
earnings multiple. Sumco, a leading Japanese semiconductor and solar wafer manufacturer, had 5% unlevered profit
margin in 2010. Oversupply of polysilicon in coming two years should bring some cost relief helping the margins.
Last but not least, in 2012 MEMC should get by on order the same $155M net income, a figure needed for us to
derive the $1.55B value using x10 multiple on earnings coming from both the semiconductor materials arm
and the solar park development arm. Last week MEMC announced acquisition of US arm of Fotowatio Renewables
Venture (FRV). FRV US is a utility-scale solar park developer, and the acquisition will strengthen MEMC’s solar park
development arm by increasing throughput of internally-produced solar wafers. The acquisition roughly doubles
Alex Mineev MEMC’s downstream business through FRV’s strong presence in the utility-scale market. Assuming 2.8$/W (2€/W)
Alexey.Mineev.WG09@gmail.com
+1.267.230.7772 project cost in 2012, 0.5GW installations with operating margin 10% for a project development business, and 40% tax,
August - 6th, 2011 together SunEdison and FRV US will bring in 2.8 x 500 x 0.10 x 0.60 = $84M, which combined with $50÷$60M from
semiconductor materials would justify the $1.55B equity value target – while Street estimates 2012E earnings at
Disclaimer: The write-up does not
involve any inside information the ~$270M. On a related note, having internal downstream business in place is especially important. The solar market
author might hold nor related to the will be landing on grid parity coming two years because of the ongoing collapse in solar module’s price. Therefore,
full-time job the author currently while it will take some time for the upstream businesses to have their margins recover in light of little bargaining power,
engage in. The write-up was not
assigned by any party and created by the downstream market will be booming driven by market competitiveness of solar. As a result, MEMC’s downstream
the author on his own initiative. business will help offset the pressure on margins in the upstream business.

5. Chesapeake Energy Corporation (NYSE: CHK) is a short, as the company is at least 20% overvalued
because:
Cash Flow based valuation: CHK’s free cash flow is negative at current price of 4 $/Mcf for natural gas, while CHK is one of the
most heavily leveraged E&P companies having ~$10B worth of net debt. 2011 is similar to 2010 in terms of natural gas prices. In
2010 Operating Cash Flow (including the revenues from gas price hedges) was ~$5B implying the average natural gas price at
5.7 $/Mcf. 5.7 $/Mcf is $1.7 greater than the current 4$/Mcf, while exploration and development cost in the amount of ~$5B
zeroed out Free Cash Flow. If we account for the natural gas hedges separately by valuing them at market value, which is
currently negative $2B though according to Q2’s 10Q, CHK is $1.7$/Mcf below the break-even free cash flow-wise. Forward
curve on natural gas pushes level 6 $/Mcf only in 2018. This means that at the average price of natural gas 5 $/Mcf during a
period of coming six years, CHK will be operating with ~-$0.8B free cash flow per annum in the current market conditions.
Relative valuation: CHK’s 2011E & 2012E EBITDA margin at 42%-44% is 35% lower than Top 25 E&Ps’ average at 66% while
CHK’s exploration and production cost is in the ballpark of the industry’s average. Therefore, potentially, CHK deserves about the
same 35% discount based on present value of reserves at a well’s top. Trading at ~ x0.6 of estimated net present value of proved
oil & gas reserves at a well’s top before any costs, ~7% lower than the average for Top 25 E&Ps, and at x6.6 LTM EBITDA (vs.
average 7.7 for Top 25 E&Ps), CHK does not look very expensive. However, CHK’s EBITDA margin is ~35% lower than the
average for Top 25 E&Ps (42-44% vs. 66%). Therefore, based on relative valuation, CHK appears to be, conservatively, 20%
overvalued (35%-7%=28%). Taking exploration and development cost out of the production value at a well’s top but leaving taxes
and operating expense there, CHK ‘s enterprise value is at x1.0 vs. x1.15 for top 25 E&Ps’ average in my estimate. This speaks
to me of not cheap current valuation for the whole E&P industry either. Additionally, CHK’s low EBITDA margin makes a short
position less vulnerable to upswings and more appreciative to down-swings in natural gas prices.
Natural gas price factor: As of August Baker Hughes’s data on rigs has it that that the number of in-land gas rigs bottomed out
at current level 860-870 over the last half a year, falling from level 980 a year ago after rising from level 660 over the previous year
– and the decrease over the last year did not lead up to strengthening of natural gas price. The EIA Short-Term Energy Outlook as
Alex Mineev of August 2011 has it that natural gas in storage is expected to hold for most of 2012 at ~5%-10% oversupply relative to the
Alexey.Mineev.WG09@gmail.com
+1.267.230.7772 historical mean level, while forecasting natural gas consumption increase pullback at +1.8% and +0.7% in 2011 and 2012
August - 20th, 2011 correspondingly after +5.7% in 2010. This speaks that if the economy is seizing up now, the expected oversupply in light of the
expected pull-back in consumption will likely be adjusted higher. Additionally, along with such high-profile acquisitions as those of
Disclaimer: The write-up does not
involve any inside information the XTO Energy, Atlas, Mariner, and Petrohawk, gassy E&Ps themselves heavily invested in undeveloped acreage priming for
author might hold nor related to the recovery, whose happening is now being questioned. During 2009 and 2010 together, “gassy” E&P companies invested ~ x1.4 of
full-time job the author is currently 2010 Revenues, while the rest E&P companies had this figure lower than x1.0. Unless acreage is drilled, the leases will be
employed for. The write-up was not
assigned by any party and created by foregone. Therefore, E&Ps now go JV to utilize undeveloped acreage trying to unload the burden of CapEx. One way or another,
the author on his own initiative. either continuing drilling itself or the overhang of undeveloped acreage will be putting a damper on the natural gas prices.

6. First Solar (FSLR) is a buy at $46 with $60 target (30% upside)
1.5 €/W is estimated system The unfolding Europe’s debts drama and the resulting furthering of austerity measures leave little ground for scenarios
other than the hard landing of the highly competitive solar panels manufacturing market on the pricing level
pricing level when government corresponding to grid parity. Level 1.5 €/W for solar project cost (with solar panel price at roughly half of the project
incentives become withdrawn cost) is a proxy for the bottom of solar projects’ pricing level. (Grid parity is a situation when the alternative energy’s
price becomes equal to the market price of electricity)
~$40 is FSLR’s “floor level” Project cost = 1.3 €/W Project cost = 1.4 €/W Project cost = 1.5 €/W
The table on the left represents
"solar
based on grid parity project hours" the author’s modeling of grid
available wholesale Unlevered parity for European and US
est., after electricity cost of Equity Equity Equity
pricing and production’s no- losses price equity IRR upside IRR upside IRR upside locations in € terms. One can
growth scenario Munich, Germany 1,082 115 €/MWh 6.0% 8.3% 45% 7.2% 17% 6.1% (7%) notice that project price 1.5 €/W
Madrid, Spain 1,511 98 €/MWh 7.0% 11.6% 66% 10.1% 35% 8.8% 8%
represents a level lower than
T oulouse, France 1,288 66 €/MWh 6.0% 0.0% (77%) n/a (100%) n/a (100%)
Naples, Italy 1,628 133 €/MWh 7.0% 20.7% 252% 18.7% 211% 16.9% 176% which IRR and equity upside
$70 is fair value price level New York, USA 1,367 92 €/MWh 6.0% 8.5% 48% 7.3% 20% 6.2% (4%) become viable for solar park
Los Angeles, USA 1,532 84 €/MWh 6.0% 8.9% 59% 7.7% 30% 6.7% 5%
based on Base case, under For wholesale Europe's market el. rates Europe's energy portal was used: http://www.energy.eu/ For US locations: NJ rate was used for NYC, and average of rates by
developers if all government
San Diego Gas & Electric, Los Angeles Department of Water & Power, and Southern California Edison was used for LA; http://www.eia.gov/electricity/sales_revenue_price/index.cfm incentives become withdrawn.
which FSLR as the cost leader Key assumpions: 20% /80% project financing @ 5% / 15 years, tax 40% , 0.5% annual module degradation, 15 years uselife, OpEx/Revenue = 20% , El.price escalation = 2%
recovers its ROIC to the cost Based on the 1.5 €/W estimate for grid parity system pricing, I Fair share price (grid-parity project pricing in 2012, 2.5%
term. growth, Maintenance Capex = Depreciation x 1.025
came to ~$40 “floor level” under a scenario of grid parity project ^8, $1.9B incremental value added from pipeline
of equity over 5 years after pricing, no-growth, and $1.9B estimated incremental value from
2012-2013 FSLR cost per W
government support becomes the 2.7GW pipeline, whose selling price is fixed.
$0.0B 0.63 $/W 0.65 $/W 0.67 $/W
minimized 1.45 €/W $38 $33 $28
Project
pricing
Assuming further cost cuts & increasing downstream throughput 1.50 €/W $43 $38 $33
Alex Mineev of panels over 5 years and thus resulting recovery of ROIC to 1.55 €/W $48 $43 $38
Alexey.Mineev.WG09@gmail.com
+1.267.230.7772
equity cost level, I came to ~$70 for fair value stock price level
December -9th, 2011
Disclaimer: The write-up does not Equity cost
contain any inside information the
9.0% 10.0% 11.0%
author might hold nor is directly related
to the full-time job the author currently High case $89 $80 $72
does. The write-up was not assigned Base case $76 $68 $62
by any party and created solely by the
author on his own initiative. Low case $62 $57 $52

7. R.R. Donnelley & Son Company (RRD) is a buy at $13.5 with short-term target $16 (~20% upside)
By allocating the debts to the Last 7 years’ acquisitions by RRD, totaling $4.2B for only $0.7B tangible value, made me realize that I should look into
the valuation of the equity sitting into the acquisitions separately from the rest of RRD’s equity. Also, $7.2B OCF over 7
acquisitions and projecting years in light of $4.2B cash acquisitions leaves an impression of a “Cash Cow” (in parlance of BCG matrix as RRD is
their EBITDAs flat, the the largest player in a sagging industry) on a shopping spree for its #1 place - boosting acquisitions.
acquisitions’ Year 10 A latest example of Bowne’s acquisition 2010's acquisition of Bowne & Co 1
2010 2011 2012
2 3
2013
4
2014
5 6
2015 2016 2017
7 8
2018
9
2019
10
2020
shows that treating acquisitions as stand EBITDA, M$ 0% 59 59 59 59 59 59 59 59 59 59 59
EV/EBITDAs at x6.5 / x7.5 in Less: Interest
alone, leveraged ones is feasible; on Less: Tax 40%
(31)
(2)
(29)
(3)
(28)
(3)
(27)
(3)
(26)
(4)
(25)
(4)
(23)
(5)
(22)
(5)
(21)
(6)
(19)
(7)
• Less: Capex ( 50% of Depreciation) 0.5x (12) (12) (12) (12) (13) (13) (13) (14) (14) (14)
Low / High cases, and Bowne, RRD makes ~8% IRR on 10 year Available to pay down principal 15 15 16 16 16 17 17 18 18 19
EV/EBITDA for the unlevered term horizon assuming that by Year 10 Equity 80 33 39 47 57 68 82 97 113 130 149
Debt 400 385 370 355 339 322 306 288 271 253 234
EV/EBITDA contracts to x6.5 / x7.5 in Low / EV 480 418 409 402 395 390 387 385 384 383 384
parts at x5.0 / x6.0, I come to EV/EBITDA
High cases. Also, the reason for my “the Levered equity value
8.1x 7.1x 6.9x 6.8x 6.7x 6.6x 6.6x 6.5x 6.5x 6.5x 6.5x
33 39 47 57 68 82 97 113 130 149
$22 / $28 fair share value. packaging of debts” into acquisitions is that Cost of levered equity 20.0% 20.0% 20.0% 20.0% 20.0% 20.0% 18.4% 16.8% 15.6% 14.6%
Equity 10 year IRR 6%
the prospectus of $1.250B notes issued in Sensitivity analysys for 10y Equity IRR:
I set $16 as short-term target, 2007 explicitly states that all the $1.2B EBITDA growth
6% -1% +0% +1%
a level corresponding with proceeds go to finance $1.3B acquisition of
EV/EBITDA
6.5x 1% 6% 10%
Y10
Banta. Modeling of Banta gives pretty much 7.0x 4% 8% 12%
7.7% projected dividend yield 7.5x 6% 10% 13%
the same level of 10 year IRR as does the
vs. ~9.1% projected dividend modeling of Bowne. Using equity value in Year 10 based on x6.5 / x7.5 EV/EBITDA, as shown above for Low case, I
yield based on current $13.5 calculate $33M current Bowne’ levered equity value by using cost of levered equity based on 10.4% unlevered equity
cost and 20% top for levered equity cost. Then, I come to $275M / $417in Low / High for levered equity “sitting” into
share price the acquisitions thereby “packaging up” all debts into acquisitions, while using zero value in Worst case.
Value of equity into the acquisitions (M$): Valuing of the not-levered equity part (M$): Total equity value (M$)
Alex Mineev Then I add value of
Worst Low High Worst Low High Worst Low High
Alexey.Mineev.WG09@gmail.com not-levered equity by
+1.267.230.7772 Year 10 EV/EVITDA 2012 E EBITDA 1,386 1,386 1,386 Levered Equity 0 275 417
using x5 / x6 on the
February -23rd, 2012 6.5x 7.5x Less: Levered EBITDA (492) (492) (492) Not-levered Equity 3,623 3,623 4,517
not-levered, residual Equity 0 275 417 Not-levered EBITDA 894 894 894 Equity Value 3,623 3,898 4,934
Disclaimer: The write-up does not EBITDA and thus Debts 3,211 3,211 3,211 EV/EBITDA 5.0x 5.0x 6.0x Share price $20 $22 $28
contain any inside information the EV 3,211 3,486 3,628 Equity (Debt = 0%) 4,471 4,471 5,365 Dividend yield 6.1% 5.6% 4.5%
come to $22 / $28 fair EBITDA 492 492 492 Less: pensions after tax (847) (847) (847) EV/12' EBITDA 4.9x 5.1x 5.9x
author might hold nor is directly related
to the full-time job the author currently share value in EV/EBITDA 6.5x 7.1x 7.4x Not-levered Equity 3,623 3,623 4,517
does. The write-up was not assigned Low/High cases and Risks: Continuation of Donnelley’s extensive acquisitions could be important for the company to maintain
by any party and created solely by the $20 in Worst case its EBITDA margins and Revenues, and the aspect is mitigated by applying low x5 / x6 EV/EBITDA when
author on his own initiative. valuing the not-levered equity part.