Valuation And One-Off Checks
Use this file for Kanchi Step 3 and Step 4 decisions.
Step 3: Valuation Mapping By Sector
| Sector/Type | Primary metric | Secondary metric | Pass condition example |
|---|---|---|---|
| Banks/Insurers | P/TBV |
PER x PBR (compatibility) + historical percentile |
Reject when clearly above historical fair band |
| REIT | P/FFO or P/AFFO |
Implied cap rate vs peers | Prefer below own 5y median multiple |
| Asset-light growth | Forward P/E |
P/FCF and 5y range |
Require at least one valuation metric near lower half of range |
| Mature cash cows | P/FCF |
Dividend yield vs 5y average | Prefer yield above historical mean with intact fundamentals |
Note:
- Kanchi's original Japan-style filter uses
PER x PBR. - For US banks,
P/TBVis typically more robust because tangible book is the standard anchor.
If metrics disagree, choose HOLD-FOR-REVIEW instead of forcing PASS.
Step 4: One-Off Profit Checklist
Mark each item YES/NO. Two or more YES values require downgrade or reject.
- Profit jump driven by asset sales or disposal gains.
- EPS lifted by legal settlement or tax one-time effects.
- Margin expansion without matching revenue quality.
- Management repeatedly labels key profit items as "non-recurring."
- Dividend support appears linked to debt increase or asset liquidation.
Step 4 Output Format
Use this exact compact output in reports:
Step4 verdict: FAIL
Reason: EPS uplift mostly from one-time asset sale; recurring margin trend still weak.Keep each reason to one sentence.