This time around, we're going to look at a topic that we've gotten a lot of questions about, namely, what is in an equity research report.
這次我們要探討一個大家經常問的話題，也就是股票研究報告的內容。
00:20
I have a couple examples here on screen of the first pages of equity research reports, both real ones, and then ones that we've created in our various financial modeling courses.
我這裡有幾個股票研究報告的首頁範例，包括真實的報告和我們在各種財務建模課程中創建的報告。
00:31
So the usual question we get on this topic is something like, what's in an equity research report, or can you share a sample equity research report, or can you teach me how to write an equity research report?
It's a very common question, and it's also a very common case study task.
這是一個非常常見的問題，也是一個非常常見的案例研究任務。
00:47
If you're interviewing for equity research groups, they will often ask you to write a short report, or look at a company, and then make a recommendation, and then write a report and submit it to them.
So we're going to go through it here and cover the key points.
因此，我們將在這裡逐步講解並涵蓋關鍵點。
01:01
There are three main parts to this tutorial.
這個教學有三個主要部分。
01:04
First, I'm going to explain the difference between stock pitches and equity research reports.
首先，我將解釋股票推介和股票研究報告之間的區別。
01:09
Then in part two, I'm going to go through the four main differences in research reports, and then in part three, we're going to go through a few sample reports and look at the typical sections there and see how they're structured.
The harder part is understanding the rationale and why a research report differs from a stock pitch and how it's structured differently.
更難的部分是理解報告的基本原理，以及為什麼研究報告與股票推介不同，以及它的結構為何不同。
01:38
So that is what I'm going to spend the most time on here.
因此，這就是我將在這裡花最多時間講解的部分。
01:43
Let's go into part one first and look at the main differences between stock pitches and equity research reports.
讓我們先進入第一部分，看看股票推介和股票研究報告之間的主要差異。
01:48
So if you haven't already been through some of our tutorials on stock pitches and seen a few examples, I strongly recommend looking at those because this entire lesson is going to make a whole lot more sense if you already know how we recommend structuring a stock pitch for a hedge fund or an asset management firm.
So we have a pretty substantial pricing difference there.
因此，我們在價格上有相當大的差異。
02:30
And the idea in a stock pitch is to say this company is mispriced and misunderstood by the market because of reasons one, two, and three.
在股票推介中，核心概念是指出這家公司被市場低估和誤解，原因有三點。
02:38
And then in the next six to 12 months, there are specific events, catalysts that will make the stock price change in the direction that we expect.
接著在未來六到十二個月內，會有具體的事件或催化劑，使股價朝我們預期的方向變動。
02:48
Here, for example, we name a few specific catalysts and point out how, in our opinion, they could push the stock price up by at least 50% in the next six to 12 months.
The idea is to explain why your views of the company are extremely different from what the consensus thinks about the company and how even if you're slightly wrong, you can still make money with your recommendations.
目的是解釋為何你對公司的看法與市場共識大相逕庭，以及即使你的判斷略有偏差，仍能從你的建議中獲利。
03:11
So you're trying to give them a picture of asymmetric returns and point out that if you're right, there might be 100% or 50% upside.
But if you're wrong, maybe there is only 50% or 20% downside or something like that.
但如果你是錯的，可能只會有50%或20%的下跌風險之類的。
03:28
And in an equity research report, you will see similar concepts, but the difference is that it's a bit of a watered down version of this argument and this structure.
在股票研究報告中，你會看到類似的概念，但區別在於這些論點和結構會稍微被弱化。
03:37
I think you can understand that if you look at the components that go into a stock pitch versus an equity research report, so in a stock pitch, normally you'll have a company recommendation, the company background, your investment thesis, catalysts, valuation investment
And then the worst case scenario and what you might do about that.
然後是最壞的情況以及你可能會採取的應對措施。
03:59
So the overall logic is to say that we think this company stock price will increase from $50 per share to $80 to $100 per share.
因此，整體邏輯是說明我們認為這家公司的股價將從每股50美元上漲到80至100美元。
04:07
Now we might be wrong and if we're wrong, it might fall to around $30 to $40 per share.
當然，我們可能會判斷錯誤，如果錯了，股價可能會跌到每股30至40美元左右。
04:11
So there is more upside than there is downside, but since there is that downside risk, let's protect ourselves by buying put options around that level to limit our losses.
因此，上漲空間大於下跌風險，但由於存在下跌風險，我們可以通過購買該價位的賣權來保護自己，限制損失。
04:21
So if the stock really starts falling, we can exercise those put options and reduce our losses.
因此，如果股價真的開始下跌，我們可以行使這些賣權，減少損失。
04:28
Now, in a stock pitch, the most important parts and the parts that you tend to spend the most time and energy on are the catalysts, the valuation and the risk factors.
在股票推介中，最重要的部分，也是你通常會花最多時間和精力的部分，是催化劑、估值和風險因素。
04:38
You really want to establish why your views are so different and if you are potentially wrong, what you might do to limit your losses.
你真的想要闡明為什麼你的觀點如此不同，以及如果你可能錯了，你會做什麼來限制你的損失。
04:46
In equity research, you have similar points, but the distribution of time, effort and space is quite different.
在股票研究中，你有類似的要點，但時間、精力和篇幅的分配卻大不相同。
04:53
So first off, in an equity research report, you're generally not going to have a section on the worst case scenario, but you will have something on these others.
首先，在股票研究報告中，你通常不會有最壞情況的部分，但你會有關於其他方面的內容。
05:00
The recommendation, company background, investment thesis, catalysts, valuation and investment risks.
建議、公司背景、投資論點、催化劑、估值和投資風險。
05:06
However, you will end up spending a lot more time on the company background and the valuation part than you will in a stock pitch.
然而，你最終會在公司背景和估值部分花費更多的時間，比在股票推介中更多。
05:15
Valuation is actually important for both.
估值其實對兩者都很重要。
05:17
So I would say you'll spend about the same amount of time, space and energy in both forms of investment recommendations here, but you will get a lot more in the company background and industry background and data in an equity research report.
One of the main reasons for this is because in research, you generally want to promote the companies you're covering.
其中一個主要原因是，在研究中，你通常希望推廣你所覆蓋的公司。
05:35
So you're not going to see someone go out there and say that the company's stock price is going to double or that it's going to fall by 80% because you generally want to say that we think this company is pretty good and its stock price could increase and therefore you, our institutional clients, should trade more, buy more of the company's stock and
then hopefully generate more in commissions for our sales and trading desks.
然後希望能為我們的銷售和交易部門帶來更多的佣金。
06:00
Now that you understand the differences in terms of distribution and arguments made in an equity research report, let's go through the four main differences.
現在你已經瞭解了股票研究報告在分發和論點上的差異，讓我們來看看四個主要差異。
06:09
And as we do this, I'm going to bring up some examples from our sample reports here.
在這過程中，我將舉一些我們樣本報告中的例子。
06:13
One for jazz pharmaceuticals and one for Shawbrook, taken from our fundamentals modeling course and our bank modeling course.
The first major difference in an equity research report is that there is more of a focus on recent results and announcements.
股票研究報告的第一個主要差異是，它更關注最近的業績和公告。
06:27
And you can see this very clearly.
你可以清楚地看到這一點。
06:29
If you look at the sample report for jazz pharmaceuticals here, where we weigh in on the company's Q1 results and what they're guiding to for fiscal 2014, that's the year when we originally wrote this report.
So there is very much a focus on these recent results and you'll almost always see this in the first page or two of a research report that just provides an update on the company.
因此，這些最近的業績非常受到關注，你幾乎總是會在研究報告的前一兩頁看到這些更新公司的資訊。
06:51
Now in a stock pitch, you may still see something like this, but updates in recent news tend to be more important in short recommendations where you are making a recommendation saying that the company's stock price may fall.
Timing is essential in these short recommendations.
時機在這些做空建議中至關重要。
07:06
If you're making a long recommendation and saying the company's stock price is going to rise, you tend to focus on longer term issues and fundamentals that aren't tied to timing quite as strictly.
The second major difference in an equity research report is that it's very rare to see views that are extremely far outside the mainstream.
股票研究報告的第二個主要差異是，極少看到與主流觀點相差甚遠的觀點。
07:26
Remember that before Enron collapsed a long time ago, 15 out of 15 equity research analysts actually rated it a buy.
記得在安然公司倒閉之前很久，15位股票研究分析師中有15位實際上將其評為買入。
07:34
In case you've forgotten or you were too young to remember this, here's a report from Bear Stearns where a year or two before the collapse, they had this rating attractive on the company.
And then here's another report from Goldman Sachs which was actually a month or a few weeks before the collapse where they had this on their recommended list and they called Enron still the best of the best even though the company was about to collapse and go bankrupt.
Now to be fair, the 14 other analysts covering the company also thought the same thing and had buy recommendations as well.
現在公平地說，其他14位覆蓋該公司的分析師也持有相同的觀點，並給出了買入建議。
08:07
But if you look at buy side analysis around Enron, plenty of people thought the company was going to go bankrupt and bet heavily against it.
但如果你看看安隆周圍的買方分析，很多人認為這家公司會破產，並大舉押注反對它。
08:15
The reason this happens is because the incentives are different.
這種情況發生的原因是因為激勵機制不同。
08:18
Research analysts on the sell side at banks are not investing their own money so they have very little motivation to go completely outside normal views.
銀行賣方的研究分析師並不是在投資自己的錢，因此他們幾乎沒有動機去完全超出正常的觀點。
08:26
Now of course they'll always put their own spin on things and come up with something that is a little bit different from what other people think but you're generally not going to see something quite as extreme as what a hedge fund manager or other buy side analysts would come up with.
The other consideration here is that if the bank publishes a report that's too negative or a report that's too positive and therefore lacks credibility according to institutional investors then the company's trading volume could actually be hurt and the bank's commissions
So whenever a bank publishes research it has to take into account implicitly how it's going to affect trading volume in the company and whether or not it's institutional clients are going to want to buy more shares and therefore give the bank more commissions.
You can see a few examples of this if you look at the report for jazz pharmaceuticals.
如果你看看Jazz Pharmaceuticals的報告，可以看到一些例子。
09:36
We have the price at around 130 and a target price of 170.
我們的價格為約130美元，目標價格為170美元。
09:41
If you look at the report for Shawbrook this is in British pounds now but the price was 327 pence and the target price was 308 pence.
如果你看看Shawbrook的報告，這是以英鎊計價，價格為327便士，目標價格為308便士。
09:51
Very exact prices.
非常精確的價格。
09:53
If you're wondering how this is possible the short answer is that it's actually complete nonsense valuation is all about the range of possible outcomes.
如果你想知道這如何可能，簡短的回答是，這其實是完全無稽之談，估值是關於可能結果的範圍。
10:01
So you always want to look at a range of different discount rates, different growth rates, different multiples and you want to aim for something like saying the company's worth between $70 and $90 per share but you're never going to say the company's worth exactly $83.41.
So this practice is actually completely ridiculous and it's not just myself who thinks this way.
因此，這種做法其實是完全荒謬的，不僅是我這麼認為。
10:25
Academics have actually studied this issue and found horrendously low accuracy in these forecasts largely because equity research analysts have to assign some kind of target price rather than giving a range.
I don't know exactly why they do this but it is sort of just the industry standard practice.
我不知道他們為什麼這麼做，但這確實是行業標準的做法。
10:44
It's slightly better if they give several target prices and they look at different cases.
如果他們給出幾個目標價格，並且他們看不同的情況，這會稍微好一些。
10:49
This is actually the approach that we take in many of our sample reports where toward the end we have something like a bull case, a base case and a bear case and we give different target prices in each of those.
So that's a slight improvement but when all is said and done you really shouldn't be doing that at all.
這算是一個小小的改進，但說到底，你真的不該這麼做。
11:06
You should always be looking at a wider range.
你應該總是看更廣泛的範圍。
11:08
And then the fourth and last major difference here is that the investment thesis, the catalysts and the risk factors are all looser.
第四個也是最後一個主要區別是，投資理論、催化劑和風險因素都比較寬鬆。
11:16
And what I mean by this is that you will still see these in reports but they are not quite as rigorously presented as they are in stockages.
我的意思是，你仍然會在報告中看到這些內容，但它們不如股票分析中那樣嚴謹地呈現。
11:25
So in an equity research report you might see a page or two that has the investment thesis, catalysts and risk factors and they'll mention a few reasons.
在股票研究報告中，你可能會看到一兩頁關於投資理論、催化劑和風險因素的內容，並提及幾個原因。
11:33
They'll give a calendar of upcoming events that might influence the stock price.
他們會提供一個即將到來的可能影響股價的事件日曆。
11:37
They might explain why you could potentially lose money by investing in the company.
他們可能會解釋為什麼投資該公司可能會導致你虧錢。
11:41
The difference is that if you look at a typical stock pitch, far more time and attention is spent on these sections.
不同之處在於，在典型的股票推介中，這些部分會花費更多的時間和注意力。
11:50
I'm just going through our pitch for jazz pharmaceuticals right now.
我現在正在瀏覽我們對Jazz Pharmaceuticals的推介。
11:53
We have many sensitivity tables with ranges.
我們有許多帶有範圍的敏感性表格。
11:56
We consider different scenarios.
我們考慮不同的情景。
11:58
We explain exactly how all of the factors that we list as catalysts will affect the company's share price.
我們詳細解釋所有我們列為催化劑的因素將如何影響公司的股價。
12:05
Whereas in equity research you're never going to see that.
而在股票研究中，你永遠不會看到這些。
12:08
You're never going to see a statement where they say something like if they successfully launch a new drug their share price could go up by 15 percent.
你永遠不會看到他們說，如果他們成功推出一種新藥，股價可能會上漲15%之類的聲明。
12:15
Whereas in a hedge fund stock pitch you will often see it tied that closely to the company's share price.
而在對沖基金的股票推介中，你經常會看到它與公司的股價如此緊密地聯繫在一起。
12:21
Also, in equity research these items are used more to support the overall recommendation rather than to form or inform the recommendation.
此外，在股票研究中，這些項目更多地用於支持整體建議，而不是形成或通知建議。
12:30
So the analyst already likes the company.
因此，分析師已經喜歡這家公司。
12:32
They think the share price is going to increase and by the way there are also these events that may further increase the share price.
他們認為股價會上漲，順便說一下，還有這些可能進一步推高股價的事件。
12:40
Whereas in a stock pitch the whole point is to find those events and if you can't find them you don't really have a stock pitch.
而在股票推介中，整個重點是找到這些事件，如果你找不到它們，你其實沒有股票推介。
12:46
So those are the four main differences.
這就是四個主要區別。
12:48
Now let's take a look at some of these simple reports in a bit more detail and see the typical sections that go in and go beyond just how stock pitches and research reports compare to one another but see how reports are typically structured.
Our approach is that we generally start with a hedge fund stock pitch and we create the model and the outline for it and then we modify it a little bit to create a research report.
我們的方法是通常從對沖基金的股票推介開始，創建模型和大綱，然後稍微修改以創建研究報告。
13:22
So in this case our recommendation for jazz in the stock pitch was a pretty strong long recommendation because we thought it was greatly undervalued.
在這種情況下，我們對Jazz的股票推介是一個相當強烈的買入建議，因為我們認為它被嚴重低估。
13:31
We modified it to a mild buy recommendation in equity research.
我們將其修改為股票研究中的溫和買入建議。
13:35
For Shawbrook this was actually a pretty strong short recommendation.
對於Shawbrook，這實際上是一個相當強烈的賣出建議。
13:38
We thought it was overvalued by around 30 to 50% and we modified it and made it into a much softer hold recommendation in equity research because you are very rarely going to see a sell recommendation there.
So most equity research reports on page one start with an update on the company, a rating by seller hold or equivalent terminology, a price target and then recent results.
If you go to page one you see an update on their Q1 results, their guidance for the rest of the year.
如果你翻到第一頁，你會看到他們第一季度的業績更新，以及對今年剩餘時間的指引。
14:14
We have something on the catalyst and then we explain our price target for the company of 170 down here.
我們有一些關於催化劑的內容，然後解釋我們對公司的目標價格為170的理由。
14:20
We also give the financial and valuation metrics and a brief snapshot of our projections.
我們還提供了財務和估值指標，以及我們預測的簡要概況。
14:26
One issue that comes up is that if you are giving a specific target price you also have to give specific multiples and DCF assumptions to support it.
有一個問題出現了，如果你給出一個具體的目標價格，你還必須提供具體的倍數和DCF假設來支持它。
14:34
So here for example if you look at what we're saying we give an enterprise value to EBITDA multiple of 20.7x and then one for the next year 15.3x we state how they compare to the median for the set of comparables and then for the DCF analysis we give the exact discount rate,
the exact terminal free cash flow growth rate and then the exact implied share price.
具體的終端自由現金流增長率，然後是具體的隱含股價。
14:55
Of course all this is a little bit ridiculous because you should always be looking at ranges but this is just what you have to do if you're naming a specific target price.
當然，這一切有點荒謬，因為你總是應該看範圍，但這就是你在給出具體目標價格時必須做的。
15:04
The next part of the report is usually something like an operations or financial summary and this explains how the research analyst or associate came up with the forecast.
報告的下一部分通常是一個運營或財務摘要，這解釋了研究分析師或助理如何得出預測。
15:13
So for a normal company you might see revenue by product, market share, unit sales and average selling prices. If we go to the jazz report we can see the revenue mixed by product, EBITDA and EBITDA margins. We can see one of their Q-jugs here is xyrum, the revenue and the
what goes into that section. If you look at the report for Shawbrook this is a lot more industry specific because it is for commercial bank. So we have gross loans, loans by segment, interest rates, interest income, net income and the overhead ratio and then regulatory capital ratios.
So it just depends what industry you're in but those are some typical things you might see.
所以，這取決於你所在的行業，但這些是你可能會看到的一些典型內容。
15:55
Now in a stock pitch you might have a little bit of this but generally speaking all this is considered background information and it's less important than explaining how your views differ.
They assume that if you're pitching a stock you know how to value a company and project its three statements so you don't need to go into detail on every single last assumption you want to instead focus on how your views differ from what other people and the market as a whole are saying about the company. The next part is valuation which may look similar in both equity research
and stock pitches but the assumptions are quite a bit different and you're going to see numbers that are quite a bit more extreme in stock pitches. In equity research once again you're more likely to point to specific multiples such as the 75th percentile or the median multiple and explain why they're the most meaningful. So going back to the jazz report we see that
但假設卻有很大不同，而且在股票推介中你會看到更極端的數字。在股票研究中，你更可能會指向特定的倍數，例如第75百分位數或中位數倍數，並解釋為何它們最有意義。因此，回到 Jazz 的報告，我們可以看到
16:47
right in the beginning we give the specific multiples that our evaluation is based on and then we give the specific assumptions for the TCF. We do give the standard football field valuation and we go through the other methodologies but the difference is that in each case
we actually pick target multiples and use those to get to our target prices so we're very specific about it. We don't view present transactions as meaningful here for several reasons and then even in the DCF we give our free cash flow projections but then we state the specific
In a stock pitch by contrast it's a lot more about the ranges which is why if you look at the stock pitch for this company we have a lot more emphasis on the sensitivity tables and the range of different implied share prices that we get. And then toward the end of an equity research
report you'll have the investment thesis the catalysts and the risk factors and this is where the biggest differences emerge. In equity research this part is more of an afterthought.
The bank might give reasons why a company is mispriced but they're not going to spend a lot of time and energy laying them out. Each reason is not linked to a share price impact and the reasoning isn't too detailed. So it's pretty stark if you look at the contrast here. If you go into
a stock pitch for example we can make very specific statements and say something like for the company to be overvalued generics would have to enter the market in fiscal 2016 or earlier or they would have to enter in fiscal 2017 and our annual price increase estimates would have to be incorrect by 50% or more. You are never going to see a
總結一下，我會這樣說，如果你看看 Jazz 製藥的研究報告與股票推介，關鍵差異如下。在股票推介中，我們給出了每股180至220美元的內在價值，而在報告中僅約170美元，實際上，如果你看看其他一些情況，甚至更低。因此，在報告中，我們更接近公司在我們創建報告時的股價，而在股票推介中，我們的差距更大，對公司的看法也更極端。
18:34
statement that specific in an equity research report. Instead when you get to this section you'll see that the company mentions something about these factors but they don't tie these factors to a specific share price impact. So they're giving all the reasons but it's a lot
more qualitative and even in our bold base and bear cases yes we give different share prices but we're not really linking directly our catalysts to these different cases.
And then the investment risk section is here but it's mostly there because if a bank is making a buy recommendation they want to cover themselves and say we're making this recommendation but we could be wrong and there are risks and so if you invest money and lose money sorry but we warned you about it and you knew about these risks in advance whereas in a stock pitch these are a
critical part of the investment strategy because if you don't know what the risks are you don't know how to protect yourself and you don't know what your total potential loss is. So the importance of these varies tremendously between these two different forms of investment recommendations.
To sum things up here's what I would say overall if you look at the jazz pharmaceutical research report versus the stock pitch the key differences are as follows. We give an intrinsic value of 180 to 220 dollars per share in the stock pitch whereas it's only around 170 in the report and actually
lower than that if you look at some of the other cases. So we're much closer to the company's share price at the time we created the report in the report in the stock pitch we are much further off and we have much more extreme views about the company.
With catalysts we name the catalysts and we estimate the per share impact in the stock pitch 15% 10% 15% in the report we mention these but we never assign specific percentages or dollar values to them and then for the risk factors we give a specific range in the report and say the
worst case scenario is that the company's stock price could fall from 130 to 75 or 80 per share so we recommend hedging with put options. Now we mention these risk factors in the report but we don't assign a dollar value we don't estimate the share price in the worst case possible scenario
and we don't provide a hedging strategy. So those are the key differences here. To sum up everything we've been through with stock pitches versus equity research reports the main difference is the purpose. Are you investing your own money or are you making a recommendation to clients so
that you can promote a company and get more trading volume and ultimately more commissions for your bank. As a result of this difference even though some of the arguments and portions are similar you're going to see much stronger and more detailed and rigorous arguments in stock pitches. The four main differences are that you'll see more of a focus on recent events and updates
in equity research you will see more on target prices you're going to see views that are less likely to be far outside the mainstream and although you will see an investment thesis catalyst and risk factors in many cases there will be a lot looser and less rigorous than they are in stock pitches. And then finally we looked at the reports for Shawbrook and jazz pharmaceuticals
and the typical sections that go into these reports. So hopefully you know more about this topic now and you feel more prepared to read and understand equity research reports on your own and possibly to write your own if you have to do so in upcoming case studies or interviews.
