Does the October share price for Huangshan Tourism Development Co.,Ltd. (SHSE:600054) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by projecting its future cash flows and then discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you.
See our latest analysis for Huangshan Tourism DevelopmentLtd
What's The Estimated Valuation?
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:
10-year free cash flow (FCF) forecast
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Levered FCF (CN¥, Millions) | CN¥311.0m | CN¥350.0m | CN¥379.9m | CN¥406.3m | CN¥429.9m | CN¥451.5m | CN¥471.8m | CN¥491.1m | CN¥509.9m | CN¥528.5m |
Growth Rate Estimate Source | Analyst x1 | Analyst x1 | Est @ 8.54% | Est @ 6.94% | Est @ 5.82% | Est @ 5.03% | Est @ 4.48% | Est @ 4.1% | Est @ 3.83% | Est @ 3.64% |
Present Value (CN¥, Millions) Discounted @ 8.8% | CN¥286 | CN¥296 | CN¥295 | CN¥290 | CN¥282 | CN¥273 | CN¥262 | CN¥251 | CN¥239 | CN¥228 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = CN¥2.7b
We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (3.2%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.8%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = CN¥528m× (1 + 3.2%) ÷ (8.8%– 3.2%) = CN¥9.8b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥9.8b÷ ( 1 + 8.8%)10= CN¥4.2b
The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CN¥6.9b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of CN¥10.3, the company appears around fair value at the time of writing. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
SHSE:600054 Discounted Cash Flow October 31st 2022
Important Assumptions
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Huangshan Tourism DevelopmentLtd as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.8%, which is based on a levered beta of 1.021. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Next Steps:
Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Huangshan Tourism DevelopmentLtd, we've put together three important items you should assess:
- Risks: Every company has them, and we've spotted 1 warning sign for Huangshan Tourism DevelopmentLtd you should know about.
- Future Earnings: How does 600054's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every Chinese stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
黄山旅游发展股份有限公司(上海证券交易所代码:600054)10月份的股价反映了它的真实价值吗?今天,我们将通过预测股票未来的现金流,然后将其贴现到今天的价值来估计股票的内在价值。实现这一点的一种方法是使用贴现现金流(DCF)模型。像这样的模型可能看起来超出了外行的理解,但它们很容易被效仿。
对公司的估值可以有很多种方式,因此我们要指出,贴现现金流并不适用于每一种情况。对于那些热衷于学习股票分析的人来说,这里的Simply Wall St.分析模型可能会让你感兴趣。
查看我们对黄山旅游发展有限公司的最新分析
估计的估价是多少?
我们使用的是两阶段增长模型,也就是说,我们考虑了公司发展的两个阶段。在初期,公司可能有较高的增长率,而第二阶段通常被假设为有一个稳定的增长率。首先,我们需要估计未来十年的现金流。在可能的情况下,我们使用分析师的估计,但当这些估计不可用时,我们会根据上次估计或报告的价值推断先前的自由现金流(FCF)。我们假设,自由现金流萎缩的公司将减缓收缩速度,而自由现金流增长的公司在这段时间内的增长速度将放缓。我们这样做是为了反映出,增长在最初几年往往比后来几年放缓得更多。
贴现现金流就是这样一种想法,即未来的一美元不如现在的一美元,所以我们将这些未来现金流的价值贴现到以今天的美元计算的估计价值:
10年自由现金流(FCF)预测
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
杠杆FCF(CN元,百万元) | CN元3.11亿元 | CN元3.50亿元 | 净额3.799亿元 | CN元4.063亿元 | 净额4.299亿元 | CN元4.515亿元 | 净额4.718亿元 | 净额4.911亿元 | CN元5.099亿元 | CN元5.285亿元 |
增长率预估来源 | 分析师x1 | 分析师x1 | Est@8.54% | Est@6.94% | Est@5.82% | Est@5.03% | Est@4.48% | Est@4.1% | Est@3.83% | Est@3.64% |
现值(CN元,百万)贴现@8.8% | CN元286元 | CN元296元 | CN元295元 | CN元290元 | CN元282元 | CN元273元 | CN元262元 | CN元251元 | CN元239元 | CN元228元 |
(“EST”=Simply Wall St.预估的FCF成长率)
10年期现金流现值(PVCF)=CN人民币27亿元
我们现在需要计算终端价值,它说明了这十年之后的所有未来现金流。出于一些原因,使用了一个非常保守的增长率,不能超过一个国家的国内生产总值增长率。在这种情况下,我们使用了10年期政府债券收益率的5年平均值(3.2%)来估计未来的增长。与10年“增长”期一样,我们使用8.8%的权益成本将未来现金流贴现至当前价值。
终端值(TV)=FCF2032×(1+g)?(r-g)=CN元528M×(1+3.2%)?(8.8%-3.2%)=CN元9.8亿
终值现值(PVTV)=TV/(1+r)10=CN元98亿?(1+8.8%)10=CN元42亿元
那么,总价值或股权价值就是未来现金流的现值之和,在这种情况下,现金流为69亿加元。在最后一步,我们用股本价值除以流通股的数量。相对于目前10.3元的股价,该公司在撰写本文时的公允价值附近。不过,请记住,这只是一个大致的估值,就像任何复杂的公式一样--垃圾输入,垃圾输出。
上海证交所:600054贴现现金流2022年10月31日
重要假设
我们要指出,贴现现金流最重要的投入是贴现率,当然还有实际现金流。投资的一部分是你自己对一家公司未来业绩的评估,所以你自己试一试计算,检查你自己的假设。DCF也没有考虑一个行业可能的周期性,也没有考虑一家公司未来的资本要求,因此它没有给出一家公司潜在业绩的全貌。鉴于我们将黄山旅游发展有限公司视为潜在股东,股权成本被用作贴现率,而不是计入债务的资本成本(或加权平均资本成本,WACC)。在这个计算中,我们使用了8.8%,这是基于杠杆率为1.021的测试版。贝塔系数是衡量一只股票相对于整个市场的波动性的指标。我们的贝塔系数来自全球可比公司的行业平均贝塔系数,强制限制在0.8到2.0之间,这是一个稳定业务的合理范围。
接下来的步骤:
就构建你的投资论文而言,估值只是硬币的一面,它不应该是你在研究一家公司时唯一考虑的指标。贴现现金流模型并不是一个完美的股票估值工具。相反,它应该被视为“什么假设需要成立才能让这只股票被低估或高估”的指南。例如,公司权益成本或无风险利率的变化可能会对估值产生重大影响。对于黄山旅游发展有限公司,我们列出了三个你应该评估的重要项目:
- 风险:每家公司都有,我们已经发现了黄山旅游发展有限公司1号警示标志你应该知道。
- 未来收益:600054的增长率与同行和更广泛的市场相比如何?通过与我们的免费分析师增长预期图表互动,更深入地挖掘分析师对未来几年的共识数字。
- 其他高质量替代产品:你喜欢一个好的全能运动员吗?浏览我们的高质量股票互动列表,了解您可能会错过的其他股票!
PS.Simply Wall St.每天更新其针对每只中国股票的贴现现金流计算,所以如果你想找到任何其他股票的内在价值,只需搜索此处。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。