Guizhou Sanli Pharmaceutical Co.,Ltd (SHSE:603439) Shares Could Be 34% Below Their Intrinsic Value Estimate
Guizhou Sanli Pharmaceutical Co.,Ltd (SHSE:603439) Shares Could Be 34% Below Their Intrinsic Value Estimate
Key Insights
- Using the 2 Stage Free Cash Flow to Equity, Guizhou Sanli PharmaceuticalLtd fair value estimate is CN¥26.33
- Guizhou Sanli PharmaceuticalLtd's CN¥17.31 share price signals that it might be 34% undervalued
- Our fair value estimate is 33% higher than Guizhou Sanli PharmaceuticalLtd's analyst price target of CN¥19.84
In this article we are going to estimate the intrinsic value of Guizhou Sanli Pharmaceutical Co.,Ltd (SHSE:603439) by taking the expected future cash flows and discounting them to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. There's really not all that much to it, even though it might appear quite complex.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.
Crunching The Numbers
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 begin with, we have to get estimates of the next ten years of cash flows. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last 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.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
10-year free cash flow (FCF) estimate
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF (CN¥, Millions) | CN¥284.4m | CN¥350.5m | CN¥410.6m | CN¥463.5m | CN¥509.4m | CN¥549.2m | CN¥584.1m | CN¥615.2m | CN¥643.6m | CN¥670.0m |
Growth Rate Estimate Source | Est @ 31.93% | Est @ 23.23% | Est @ 17.14% | Est @ 12.88% | Est @ 9.90% | Est @ 7.81% | Est @ 6.35% | Est @ 5.33% | Est @ 4.61% | Est @ 4.11% |
Present Value (CN¥, Millions) Discounted @ 7.4% | CN¥265 | CN¥304 | CN¥331 | CN¥348 | CN¥356 | CN¥357 | CN¥353 | CN¥346 | CN¥337 | CN¥327 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = CN¥3.3b
After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. 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 (2.9%) 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 7.4%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = CN¥670m× (1 + 2.9%) ÷ (7.4%– 2.9%) = CN¥15b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥15b÷ ( 1 + 7.4%)10= CN¥7.5b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is CN¥11b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of CN¥17.3, the company appears quite good value at a 34% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.
Important Assumptions
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the 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 Guizhou Sanli PharmaceuticalLtd 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 7.4%, which is based on a levered beta of 0.800. 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.
SWOT Analysis for Guizhou Sanli PharmaceuticalLtd
- Earnings growth over the past year exceeded the industry.
- Debt is not viewed as a risk.
- Dividends are covered by earnings and cash flows.
- Dividend information for 603439.
- Dividend is low compared to the top 25% of dividend payers in the Pharmaceuticals market.
- Annual revenue is forecast to grow faster than the Chinese market.
- Trading below our estimate of fair value by more than 20%.
- Annual earnings are forecast to grow slower than the Chinese market.
- What else are analysts forecasting for 603439?
Moving On:
Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. What is the reason for the share price sitting below the intrinsic value? For Guizhou Sanli PharmaceuticalLtd, we've put together three relevant elements you should consider:
- Financial Health: Does 603439 have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Future Earnings: How does 603439'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. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the SHSE every day. If you want to find the calculation for other stocks 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.
關鍵見解
- 使用兩階段自由現金流股權,貴州三立製藥有限公司的公允價值估計爲26.33元人民幣
- 貴州三立製藥有限公司17.31元人民幣的股價表明其估值可能被低估了34%
- 我們的公允價值估計比貴州三立製藥有限公司分析師19.84元人民幣的目標股價高出33%
在本文中,我們將估算貴州三立藥業有限公司的內在價值。, Ltd(上海證券交易所股票代碼:603439),計算預期的未來現金流並將其折現爲今天的價值。爲此,我們將利用折扣現金流 (DCF) 模型。儘管它可能看起來很複雜,但實際上並沒有那麼多。
公司可以在很多方面得到估值,因此我們要指出,DCF並不適合所有情況。如果你對這種估值還有一些迫切的問題,可以看看 Simply Wall St 分析模型。
計算數字
我們使用的是兩階段增長模型,這只是意味着我們考慮了公司增長的兩個階段。在初始階段,公司的增長率可能更高,而第二階段通常被認爲具有穩定的增長率。首先,我們必須估算出未來十年的現金流。鑑於我們沒有分析師對自由現金流的估計,我們從公司上次公佈的價值中推斷了之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
通常,我們假設今天的一美元比未來一美元更有價值,因此我們需要對這些未來現金流的總和進行折價才能得出現值估計:
10 年自由現金流 (FCF) 估計
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
槓桿FCF(人民幣,百萬) | 284.4 億元人民幣 | 350.5 億元人民幣 | 4.106 億元人民幣 | 463.5 億元人民幣 | 5.094 億元人民幣 | 549.2 萬元人民幣 | 5.841 億元人民幣 | 615.2 億元人民幣 | 6.436億元人民幣 | cn¥670.0 m |
增長率估算來源 | 美國東部標準時間 @ 31.93% | 美國東部標準時間 @ 23.23% | 美國東部標準時間 @ 17.14% | 美國東部標準時間 @ 12.88% | 美國東部標準時間 @ 9.90% | Est @ 7.81% | 美國東部時間 @ 6.35% | Est @ 5.33% | Est @ 4.61% | 美國東部標準時間 @ 4.11% |
現值(人民幣,百萬)折扣價 @ 7.4% | 人民幣265元 | CN¥304 | CN¥331 | 348 元人民幣 | CN¥356 | CN¥357 | CN¥353 | CN¥346 | CN¥337 | CN¥327 |
(“Est” = Simply Wall St估計的FCF增長率)
10 年期現金流 (PVCF) 的現值 = 33 億元人民幣
在計算了最初10年期內未來現金流的現值之後,我們需要計算終值,該終值涵蓋了第一階段以後的所有未來現金流。出於多種原因,使用的增長率非常保守,不能超過一個國家的GDP增長率。在這種情況下,我們使用10年期國債收益率的5年平均值(2.9%)來估計未來的增長。與10年 “增長” 期一樣,我們使用7.4%的股本成本將未來的現金流折現爲今天的價值。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 6.7億元人民幣× (1 + 2.9%) ÷ (7.4% — 2.9%) = 150億元人民幣
終端價值的現值 (PVTV) = 電視/ (1 + r)10= CN¥15b÷ (1 + 7.4%)10= CN¥7.5b
總價值是未來十年的現金流總額加上折後的終端價值,由此得出總權益價值,在本例中爲110億元人民幣。爲了得出每股內在價值,我們將其除以已發行股票總數。與目前17.3元人民幣的股價相比,該公司看起來物有所值,比目前的股價折扣了34%。但請記住,這只是一個近似的估值,就像任何複雜的公式一樣,垃圾進出。
重要假設
上面的計算在很大程度上取決於兩個假設。第一個是貼現率,另一個是現金流。如果你不同意這些結果,那就自己計算一下,試一試假設。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將貴州三立製藥視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了7.4%,這是基於0.800的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
貴州三力藥業有限公司的SWOT分析
- 過去一年的收益增長超過了該行業。
- 債務不被視爲風險。
- 股息由收益和現金流支付。
- 603439的股息信息。
- 與製藥市場前25%的股息支付者相比,股息很低。
- 預計年收入的增長速度將快於中國市場。
- 交易價格比我們估計的公允價值低20%以上。
- 預計年收益增長將低於中國市場。
- 分析師對603439還有什麼預測?
繼續前進:
就建立投資論點而言,估值只是硬幣的一面,它只是公司需要評估的衆多因素之一。DCF模型並不是投資估值的萬能藥。最好你運用不同的案例和假設,看看它們將如何影響公司的估值。如果一家公司以不同的速度增長,或者其股本成本或無風險利率急劇變化,則產出可能會大不相同。股價低於內在價值的原因是什麼?對於貴州三立製藥有限公司,我們彙總了您應該考慮的三個相關要素:
- 財務狀況:603439 的資產負債表健康嗎?看看我們的免費資產負債表分析,其中包含對槓桿和風險等關鍵因素的六項簡單檢查。
- 未來收益:與同行和整個市場相比,603439的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他高質量的替代品:你喜歡一個優秀的全能選手嗎?瀏覽我們的高品質股票互動清單,了解您可能還會錯過什麼!
PS。Simply Wall St應用程序每天對上海證券交易所的每隻股票進行折扣現金流估值。如果您想找到其他股票的計算方法,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
風險及免責聲明
- 分享到weixin
- 分享到qq
- 分享到facebook
- 分享到twitter
- 分享到微博
- 粘贴板
使用瀏覽器的分享功能,分享給你的好友吧