2016 CFA INSTITUTE RESEARCH CHALLENGE
RESEARCH REPORTS: WHAT TO FOCUS ON?
LOCAL ROUND – TEAMS ORIENTATION
OCTOBER 2015
TEAMS ORIENTATION PROGRAM
Research Report writing essentials
Lessons from Amsterdam 2015
Student Recommendations
KEY QUESTIONS
 What is a research report?
 What is the most important part of the research report?
 How detailed should be the descriptive part?
 What is financial analysis for?
 In which part of the research report is the greatest value added of
the analyst?
 Lessons from London 2013
WHAT IS A RESEARCH REPORT
 Research report is a communication between an analyst and a
„reader“
 Analyst should deliver a reliable message (story) in an attractive
form
 Your message (opinion) then serves in most cases as a basis for
investment decisions
 Who are the „readers“? – portfolio managers, traders, auditors,
regulators, retail clients…
STRUCTURE OF A TYPICAL RESEARCH REPORT
1. Summary
2. Country & Industry Overview and Outlook
3. Business Description and Outlook
4. Financial Analysis with Comments
5. Valuation & Recommendation
SUMMARY (THE FRONT PAGE)

Shows the reader reasons to read the full report

Summarizes the major investment ideas and risks

States the investment recommendation
COUNTRY, INDUSTRY AND BUSINESS OVERVIEW AND OUTLOOK
 This part describes the general environment the company
operates in
 Focus on characteristics that are relevant for valuation
 Describe the current situation and always focus on the outlook
FINANCIAL ANALYSIS
 FA helps the analyst to understand the company from a financial
point of view
 The analyst then presents the results to the reader
 Each parameter (ratio) has to be put into a context and
commented
 Give outlook for profitability, activity, indebtedness, liquidity etc.
based on your knowledge of the industry
VALUATION I
 Your task is to estimate the fair value of an asset (company)
 You already know the asset very well, it was analyzed in preceding
chapters of your report
 Build a simple model, you can always make it more enhanced
later
 Briefly describe the valuation methods used
 Every time you make an important assumption, make a note of it
VALUATION II
 Each valuation method gives a different estimate of the fair value
(like throwing darts on a target)
 Averaging the outcomes is not always the best approach
 Show your analytical skills and decide which method is the most
relevant
 State your investment recommendation
ANALYSIS AND SYNTHESIS I
 From methodological point of view, each research report can be
divided into two main sections:
1.
2.
3.
4.
Summary
Country & Industry overview and outlook
Business description and outlook
Financial analysis
5. Valuation
6. Appendix
ANALYSIS
SYNTHESIS
ANALYSIS AND SYNTHESIS II
 Valuation synthesizes the analyst‘s general outlook of the industry
and the company
 The synthesis represents the greatest value added of the analyst
 Quality of the valuation chapter helps to distinguish true analysts
from the rest
THE
APPENDIX MATTERS!
 Judges look not only at the presentation itself, but also at the Appendix –
it is an integral part of the final presentation. This is the opportunity to
show your hard work. Present all your calculations and analysis in the
Appendix (e.g. Excel snapshots)
 In many cases, the Appendix was much bigger than the presentation
(e.g. 10 slides of presentation + 20 slides of Appendix)
 Hyperlinks will make your life easier: The first page of the Appendix
should include „Contents“ with hyperlinks to individual slides. Individual
slides should contain hyperlink to jump back to the first page of the
Appendix
 Think about the questions that may be raised (e.g. WACC assumptions)
TO SUM UP
1.
2.
3.
4.
Describe only relevant facts
Identify important trends (value drivers)
State clearly your opinion and outlook
Make sure that the analytical part is consistent with the final
synthesis (valuation).
5. Choose the best valuation method(s)
6. State your investment recommendation
7. Include the Appendix (present all your calculations and thoughts)
APPENDIX: EDUCATIONAL RESOURCES
For more information please refer to :
https://www.cfainstitute.org/community/challenge/Pages/index.aspx
You can find there audio and video webcasts, articles and books that
can help you with:




Preparing for the project
Researching the subject
Developing your report
Presenting your work
Do not forget to read the CFA Research Challenge Official Rules 2016.
CONTACTS
KAREL TREGLER, CFA
Karel Tregler, Ph.D., CFA
Head of Financial Markets Division
PPF banka a.s.
Evropska 2690/17, Prague 6
[email protected]
LESSONS FROM AMSTERDAM 2015



Rehearse the presentation thoroughly and
carefully plan every minute. The whole
presentation should read like a convincing
story
Get feedback during rehearsals, also using
videotaping. Body language, dress, and
movement on the stage are important
Take care to be respectful towards the
judges and their questions
Tanweer Ali, CFA
Academic Adisor
LESSONS FROM AMSTERDAM 2015




Know the Rules! Structure research report
and Final presentation according to best
practice
Pay attention to every single detail
Spend enough time rehearsing the final
presentation. It is important for the research
challenge teams to practice (in addition to
content) also speed, intentional pauses,
points that should attract attention and need
to be emphasized by voice and gestures
Be a well-prepared confident actor which
leaves the best impression
Michal Mareš, CFA
Industry Mentor
LESSONS FROM AMSTERDAM 2015




Be prepared for hard questions from judges
in the Q&A Session
However, questions from judges can be
anticipated if you intentionally create logical
gap in your Final presentation
Back up slides in the Appendix serve
valuable purpose as they help you to
answer hard questions
Team that can be easily remembered wins
the competition
Jan Hájek, CFA
Presentation Judge
RECOMMENDATIONS
JAKUB JURGA , RC COORDINATOR
Tips & tricks for report writing





Guidelines in the Official Rules
(Appdx A)
Annual reports, other analysis,
(various banks etc.) publically
available documents  everything
need to be disclosed
Cover & back page available after
registration at CFA Institute
website (or I can send it via email)
Old reports available at CFA
Society Czech Republic website
Equity analysis book available
after the registration
Current status:

11 universities (2 from SVK)
11 teams
50+ students

 sufficient number of mentors


KEY TAKEAWAYS
JAKUB JURGA , RC COORDINATOR



Read the rules and register
Teams assigned to Industry Mentors during the next week
Company presentation at 4 November 1:00pm in EY, Na Florenci
2116/15, Praha, (Florentinum)
Tomáš Hrbáček, Jakub Jurga
CFA Institute Research Challenge Coordinators
[email protected],
[email protected]
+420 775 413 578, +420 734 863 852
CFA INSTITUTE RESEARCH CHALLENGE
SUPPORTING COMPANIES
Organizing the RC would not be possible without our corporate
partners.
WE ARE LOOKING FORWARD
TO SEE YOU IN
FINAL
Czech CFA Society
c/o EY, Marek Jindra
Na Florenci 2116/15
110 00 Praha 1
Czech Republic
Mobile: +420 603 489 663
E-mail: [email protected]
www.czechcfa.cz