Report on Juner: Financing Entrepreneurial Initiatives and Valuation

This report provides a comprehensive analysis of Juner's financing strategies and entrepreneurial initiatives. It begins by identifying key value drivers and the features of Juner's business model, utilizing a seven-domain framework to assess market attractiveness, target segments, and sustainable advantages. The report then delves into the advantages and disadvantages of Initial Public Offerings (IPOs) as a financing option, including capital raising, credibility, and the potential for management control issues. It also explores factors to consider when choosing listed shares. The report further examines valuation models, including the market comparable approach and the application of the free cash flow model to assess Juner's business efficiency. The analysis considers market share, production scale, and the company's business strategy in the competitive Chinese market, offering insights into Juner's approach to research and development, capacity, and sales strategies. The report aims to provide a detailed overview of Juner's financial strategies and business operations.

FINANCING ENTREPRENEURIAL
INITIATIVES

Table of Contents
INTRODUCTION...........................................................................................................................3
1.Key value drivers for Juner and features of business model of Juner......................................3
2. Advantages and disadvantages of Initial public offer..............................................................5
3. Factors need to be consider while choosing listed of shares...................................................6
4. Advantages and disadvantages of market comparable approach.............................................7
5. Market multiplies approach.....................................................................................................8
6. Application of free cash model................................................................................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
An entrepreneur is the risk takers who take risky decisions without thinking twice as the
business efficiency has increases with the growing number of entrepreneurs(Verbeke. and Yuan,
2013). Juner has been selected for this project report in order to define the capabilities of an
entrepreneur in order to support their organization by applying funds. This report is all about
explaining the existing skills of an entity in order to take external market fund in order to
strengthen their enterprise. It also emphasizes on defining different valuation models to assess
the existing business efficiency of Juner. The business challenges can be removed by using the
future forecasting models in order to help an entity in return by using variety of valuation
techniques.
1.Key value drivers for Juner and features of business model of Juner
The seven domain framework will be applied in order to assess the value drivers that drives an
entity's performance which are given as follows:
Market attractiveness- The current products offered by the Juner materials is different variety
and quality of modified plastics that helps in catering various needs of all kinds of customers.
The current business has gained higher market share as compared to its existing rivals who
imposes pressure on the business. The current market share is around 70% of the overall
modified plastic industry.
Target segment- The current products are offered to variety of customers such as apparel
segment owner, fashion accessories as these modified plastic can be converted into different
fancy stones. These stones will be used by different individuals as it helps in grabbing higher
market opportunities.
Industry Attractiveness- The current business performance of Juner materials are compared
with the overall industry. The favorable business performance will be maintained by setting
barriers on the entry of all new comers.
Mission, aspiration and propensity to risk- The sales objectives are set by an organization in
order to increase their goals and the objectives framed by the top management in relation to their
current products or services. The results of all the objectives will result into market capture of

98% of direct sales and other sources of sales. The expenses are predicted in advance to reduce
their overall burden.
Sustainable advantage- The plastic products are produces by an organization which can be
easily recycled after its usage as the manufacturing of the products are through organic mode.
This objective to consider about sustainable development will help an entity in order to gain
sustainable advantage over its customers.
Execute CSF- The critical success factor of this organization is to emphasized on core
competencies of this entity in order to beat all kinds of customers. The existing capabilities are
assessed by an entity owner in relation to the external market pressures.
Value chain- This element will define the complete direction of the overall business in achieving
their desired goals and the objectives.
There are various kinds of key determinants which drives the overall china market which
will directly give impact on the business performance of the Juner which are given as below:
Entrepreneurial capabilities- The Juner has applied their unique and innovative capabilities
and skills which are applied by this enterprise in order to strengthen their current business. The
current business is operated in the intense competition of the china market (Campopiano,
Minola and Sainaghi, 2016). It is regarded as the challenging market where lot if competitors lies
in the same market. The decision of starting new materials of opening modified plastic industry
as this is not the single entity operating in this particular industry. It can be said that an entity has
reached 44.8 million tonnes of the plastic production in the year 2009 which is higher values in
the history of china.
Scale of production- The current production level set for modified plastics are higher which
enhances the sales and the revenue of an enterprise (Jaiswal and Gautam, 2016). The higher
products offer to the customers will enhance the overall scope of an entity. The current entity
will be able to serve more than 10000 per year tonnes of plastic to cater the needs and the
expectations of all the clients.
Market share- The company has increases its overall focus by emphasizes on the regional
customers in order to achieve higher level of sales and the revenue(Goffee. and Scase., 2015). The
production of this organization will be able to serve the segments of the Eastern coast such as

Zhejiang, Jiangsu and shandong. The output generated by an enterprise from local areas will
approximately up to 80% of the overall market share.
Key features of business models and strategy of Juner
The business strategy of Juner materials has focused on two different aspects such as research
and development of global technology and development of the current market. The constituents
of the business model of Juner are explained below:
Market development-The development of the market of modified plastic is gaining higher
importance with the introduction new and competitive approaches. The china's modified plastic
industry is considered as highly spread market which have total population of more than two
thousands SME which raises the competition level. The current business has earned the biggest
achievement of grabbing 50% of the overall market share with the wide number of competition.
The need of amending the current global technology arises with the existence of the local
competitor's in the plastic industry is Kingfa which is global and science technology entity. The
company has customized their current products in order to get competitive advantage over its
competitors. This customization will result into reduction of 10-30% of expenses incurred by an
enterprise.
Capacity-The Juner has divided its overall production into 29 lines of production activities
which will able to generate an annual capacity of 40000 tonnes of around 5000 types of plastics.
Research and development- It also stresses on building good research centers to test the quality
of plastics produces by an enterprise.
Incentives- the ratio of overall employees incentives has increases from one period to another
out of total of 5 years. It has been ascertained that living costs is around 200000 RMB.

31/12/1899 01/01/1900 02/01/1900 03/01/1900 04/01/1900
0
20000
40000
60000
80000
100000
120000
60000
80000
100000
12000 14000
Incentives(RMB)
Illustration 1: Incentives provided by Juner
(Source: Rangone, 2016)
Sales- The sales of Juner has increased due to presenting of different variety of products or
services offered to all the customers will be result into increment of 98% The sales are divided
into various segments such as pre-sale, to-sale and post-sale.

32.05
53.6
14.35
shandong
Jiangsu
Guangdong
Illustration 2: Sales and revenue generated by Juner
(Source:Kuratko, 2016 )
2. Advantages and disadvantages of Initial public offer
Initial public offering is that process through which entire firm can issue shares of stock
to general people(Bruton. and et.al., 2015). The decision of offering public shares will require
further permission from external regulatory bodies in order to operate their business in a
systematic way. IPO is regarded as the significant stage which enhances the existing working
conditions of an enterprise which helps in achieving the growth of an entity. The characteristics
of public entity includes those which helps in achieving a specific target that increases the
credibility and global exposure of a small business enterprise.
Advantages
Capital raising- This approach will help in arranging finance in order to meet the existing
business requirements by raising the level of capital in the business.
Credibility- The wide number of debt taken by an enterprise from different sources will help in
influencing different investors to invest in the increased financial capabilities of an entity.

Corporate profile- The equity shares are offered to different business and people will enhance the
corporate profile which can be presented in front of different business.
Corporate governance- the legal regulations are complied by an entity by using this form of
finance as it helps in raising loyalty among customers.
Reliance- The particular approach of offering equity shares will help in raising the trust among
different kinds of investors.
 It helps an enterprise in order to take advantage by utilizing additional capital which
helps an entity in order to uplift their existing organizations. The current capital will be
strengthen by taking extra advantage of new capital from external entities.
 It brings lot of opportunities for both the users the employer and an individual who take
the shares of as entity by utilizing this particular option. An entity can utilize these
opportunities in order to take advantage of the capital which can be used by an entity in
order to expand their existing business conditions.
 The credibility is that power gained by an organization in order to lure all kinds of
business users such as suppliers, creditors, customers who are integral parts of an
enterprise in order to increase their capabilities and strength by supporting an
organization in tough business situations.
 The shares offered to the public can be helpful for an entity in order to take up business
opportunities as an entity can acquire another important enterprise as the external capital
can be generated in order to purchase the company.
Disadvantages
Underwriting- The company will unable to achieve the target of attracting wide umber of equity
holders which arises the need to appoint underwriters to raises the application. This will increase
the expenses of the company.
Long term view- The use of this source of finance will not be fruitful for the entity as it bears
long term costs.
Management control and flexibility- The ownership of the business will be shared with equity
shareholders that reduces the flexibility of management in making decisions.

Direct cost- The cost of issuing shares and paying dividends are the direct costs associated with
this particular source.
Expensive and time wasting- This is regarded as one of the expensive methods of offering
shares as it wastes time of the management in meeting different legal obligations.
 Apart from seeking business opportunities by using this form of capital obtained from the
external parties it can be negative for an enterprise in terms of control. An entity can lose
control over their own enterprise as the parties who take up the shares of an entity will
participate in the ownership of an enterprise(Kuratko, D., 2016). The participants who take
shares will enjoy equal number of powers in the same entity.
 The basic limitation of this method is time consuming as selling of IPO will be expensive
process for an enterprise. This process is very time consuming as the mangers will be
fully involved in the overall process which wastes its normal time that can be invest in an
entity.
 Expenses is another important threat for an entity which includes legal fees required in
order to get permission of issuing shares through this mode(Kuratko, D., Hornsby, J. and
Covin, J., 2014). The appointment of underwriters is another issue faced by an entity as an
enterprise will not sell the shares personally among the general peoples in order to
convince them towards the purchasing of shares.
3. Factors need to be consider while choosing listed of shares
There are various factors which needs to be consider by an enterprise while choosing one
of the important option of listing of shares in a recognized stock exchange control which are
given as follows:
Listing requirement- The legal regulations need to be accomplished by the business in offering
this form of sources of finance as it require legal authority and board of director's consent.
Listing fees- The determined limit of fees need to be paid by the business before using this
source of financing.
Reputation- the existing image of the business in the stock market will need to be considered by
an enterprise before investing in an enterprise.

Industry concentration- The current level of the business in terms of risks are properly assessed
in order to make proper decisions.
Liquidity- The current ratio of liquidity will help an enterprise in affording additional cost
imposed on their business.
Market share- The existing production level of an enterprise will be helpful for an entity in
order to take advantage of listing of their shares in a stock exchange by enhancing their existing
overall market share. The production capabilities of the modified plastic industry will be able to
gain advantage by using internal business tools(Lemieux., 2013). The achievement of this
enterprise states that this entity achieved a larger market share of 70%. The existing achievement
will be enough for an entity in order to list their shares on a global expense.
Market growth- It is another factors which can help an entity in order to list all oftheir shares in
a recognized stock exchange. The growth of dividend will reflect an entity's abilities in order to
payback all of their obligations in a give time frame which will help an entity to lost their entity
in a recognized stock exchange.
Volatility- It is another important thing which need to be identified by an enterprise in advance
before list their share are recognized stock exchange as this can affect their existing working
conditions. The risk level need to assess the current capabilities of an enterprise in order to face
complex business situations which will help an entity in order to take up new opportunities of
increasing their current skills and knowledge(Le B., Miller. and Bares., 2015). The volatility factor
can enhanced or suppressed the existing potential of the corporation.
Volume- It is considered as another important aspects to be covered while selecting this option
as the number of shares bought and sold in a day which will helps in identifying the average
number of shares purchased or sold in a day is enough to obtain the volume of shares deal by an
enterprise. This particular volume option used by an enterprise which helps an entity in order to
use their strengths by helping an enterprise in achieving their objectives or goals while dealing at
a global level while exposed itself to wider competition level of the business.
Price earning share- This ratio will help an entity in order to expand their existing business
conditions of an enterprise by assessing their own capabilities. The judgment is based on this

ratio which will define the ratio of price in generating good sales and the revenue for an
enterprise.
4. Advantages and disadvantages of market comparable approach
Discounted cash flow
Advantages
It is that method which helps in assessing the intrinsic values of all the equity shares held with an
enterprise. The equity shareholder's value will need to assess by taking advantage of the time
value of money(Finkle, T. and et.al., 2013). The present figures are assessed on the basis of future
criteria by using time value of money in which present figures are observed in order to find out
the future values.
The current method will rely on the free cash flows generated throughout the method as it can
gain reliability in their figures as it is based on the cash flows obtained during the period rather
than imposing accounting figures which has based on certain assumptions used in the enterprise.
Disadvantages
The deflating growth rates and certain assumption may lead an enterprise towards the path ofd
the failure as wrong figures can prove negative for the business as it affects its
performance(Chatterji. and et.al., 2013). The business needs to be strong enough in order to face
external market complexities as future cash flows based on these growth rates.
Comparable methods
Advantages
It is more accurate as compared to the results obtained in the application of discounted cash flow
analysis.
The results obtained by applying this form of technique will be beneficial for an entity as the
results are not based on using different assumptions.
Disadvantages
The different options used by an entity in using option can deflate the primary objective of this
analysis.
The results obtained from using different forms of variables will be result into different results
which cannot be identical for achieving the primary aim of an enterprise.

5. Market multiplies approach
Sensitivity - EV/EBITDA Exit Multiple
WACC PV of FCF
9.90% 102500
6.80% 112500
7.80% 115500
7.80% 128500
8.60% 135200
PV of Terminal Value (EV/EBITDA)
6 7 7.5
204100 238117 255125
206508 240926 258135
205707 239992 257134
205738 240028 257173
205123 239310 256404
Intrinsic Value
6 7 7.5
762 846 888
793 878 920
798 883 925
830 915 957
845 929 971
Interpretations