Introduction Topics

Industry analysis-Exone

Industry analysis-3D systems

Free Cash Flow Valuation Model

Residual Income Valuation Model

Investment Decision

Industry Analysis-Exone

Name: Kaijie Qiu (Colin)To become a financial analyst

Industry Analysis-Exone

About Company:• Start up company in USA• manufacturing and selling 3D printing machines and printing

products• listed in 2013 early• current share price $ 21

Industry analysis:- Supplier Power--- Medium (a lot of suppliers)- Buyer Power--- High (more choices for customers)- Competition--- Medium(new technology)- Threat of Substitution--- Low(high technology)- Threat of New Entry--- Medium(no enough market share)

Industry Analysis-3D systems

Name: Jiaxing Li (Lee)To become a financial analyst

Industry Analysis-3D systemsCompany

a growth company provides 3D printers, print materials, professional and

consumer custom-parts services, 3D imaging and customization software

initially listed on NASDAQ (TDSC) and transferred to the New York Stock Exchange (DDD) in May 2011.

Current share price - $41.55

Five forces analysis bargaining power of suppliers - medium bargaining power of buyers - relatively low threat of substitutes- low Threat of new entrants- low Competitive rivalry- medium

Free Cash Flow Model

Runnan Lin

(Linus)

Aiming to become a financial analyst

Cost of equity—- Risk free rate from 30 years bond- Market index return from SP 500- Beta from annual report

Advantage (1) Cash flows are not affected by accounting rules;(2)It is an easy concept with familiar PV techniques

Disadvantage

(1) Free cash flows do not measure value added in the short run, value gained is not matched with value given up (2) This model fails to recognize value generated that does not involve cash flows; (3) Investment is treated as a loss of investment (4) Typically long forecasts horizons are required to recognize cash inflows from investments, particularly when investments are growing.

Free Cash Flow Model

Residual income Model

Name: Haoqing Chen (Hodge)To become a financial analyst in the future

Residual income Model

Method considered: Residual income

Reasons: Based on the unique characteristics of both companies No dividend paid out-> Not appropriate to use the Discount

Dividend Model Inconsistency of cash flows-> Not accurate when using the

Discounted Cash Flow method

=>Residual income=primary method

RIM: $52.63

$37.07

RIM: $34.84

$21.21

Residual income Model

Investment Decision

• Valuation methods indicate an under-valued share price

• The material additive manufacturing industry is growing at 16% on the next few year

• ExOne is a real leader in innovation and development of advanced metals printing.

• 3D systems company is a leading provider of printing machine.