Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Silverlake Axis Ltd (SGX:5CP) as an investment opportunity by taking the forecast future cash flows of the company and discounting them back to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you.
Check out our latest analysis for Silverlake Axis
Is Silverlake Axis Fairly Valued?
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. In the first stage we need to estimate the cash flows to the business over the next ten years. 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 need to discount the sum of these future cash flows to arrive at a present value estimate:
10-year free cash flow (FCF) estimate
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Levered FCF (MYR, Millions) | RM198.4m | RM216.4m | RM249.6m | RM277.7m | RM301.1m | RM320.5m | RM336.7m | RM350.5m | RM362.5m | RM373.1m |
Growth Rate Estimate Source | Analyst x1 | Analyst x1 | Est @ 15.32% | Est @ 11.27% | Est @ 8.44% | Est @ 6.45% | Est @ 5.06% | Est @ 4.09% | Est @ 3.41% | Est @ 2.93% |
Present Value (MYR, Millions) Discounted @ 7.2% | RM185 | RM188 | RM202 | RM210 | RM212 | RM211 | RM206 | RM200 | RM193 | RM185 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = RM2.0b
The second stage is also known as Terminal Value, this is the business's cash flow after 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 (1.8%) 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 7.2%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = RM373m× (1 + 1.8%) ÷ (7.2%– 1.8%) = RM7.0b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= RM7.0b÷ ( 1 + 7.2%)10= RM3.5b
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 RM5.5b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Compared to the current share price of S$0.4, the company appears quite undervalued at a 41% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
SGX:5CP Discounted Cash Flow July 28th 2022
Important Assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual 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 Silverlake Axis 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 7.2%, which is based on a levered beta of 1.000. 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:
Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for 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?" 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. Can we work out why the company is trading at a discount to intrinsic value? For Silverlake Axis, there are three important aspects you should further research:
- Financial Health: Does 5CP 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 5CP'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 Singaporean 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.
今天,我们将简单介绍一种估值方法,该方法用于评估Silverlake Axis Ltd(SGX:5CP)作为投资机会的吸引力,方法是将该公司未来的预测现金流折现回今天的价值。我们的分析将采用贴现现金流(DCF)模型。它真的没有那么多东西,尽管它可能看起来相当复杂。
不过请记住,有很多方法可以评估一家公司的价值,贴现现金流只是其中一种方法。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Silverlake Axis的最新分析
银湖轴心是否得到了公平的估值?
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。在第一阶段,我们需要估计未来十年为企业带来的现金流。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,即未来一美元的价值低于现在的一美元,因此我们需要对这些未来现金流的总和进行贴现,以得出现值估计:
10年自由现金流(FCF)估计
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
杠杆式FCF(马币,百万) | RM198.4m | RM216.4m | RM249.6m | RM277.7m | RM301.1m | RM320.5m | RM336.7m | RM350.5m | RM362.5m | RM373.1m |
增长率预估来源 | 分析师x1 | 分析师x1 | Est@15.32% | Est@11.27% | Est@8.44% | Est@6.45% | Est@5.06% | Est@4.09% | Est@3.41% | Est@2.93% |
贴现现值(MYR,百万)@7.2% | RM185 | RM188 | RM202 | RM210 | RM212 | RM211 | RM206 | RM200 | RM193 | RM185 |
(“EST”=Simply Wall St.预估的FCF成长率)
10年期现金流现值(PVCF)=2.0b令吉
第二阶段也被称为终端价值,这是企业在第一阶段之后的现金流。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(1.8%)来估计未来的增长。与10年“增长”期一样,我们使用7.2%的权益成本,将未来现金流贴现到今天的价值。
终端值(TV)=FCF2032×(1+g)?(r-g)=RM373M×(1+1.8%)?(7.2%-1.8%)=RM7.0b
终值现值(PVTV)=TV/(1+r)10=RM7.0b?(1+7.2%)10=35亿令吉
总价值是未来十年的现金流总和加上贴现的终端价值,得出总权益价值,在本例中为5.5亿林吉特。为了得到每股内在价值,我们将其除以总流通股数量。与目前0.4新元的股价相比,该公司的估值似乎相当低,较目前的股价有41%的折让。然而,估值是不精确的工具,更像是一台望远镜--移动几度,就会到达另一个星系。一定要记住这一点。
新交所:2022年7月28日5CP贴现现金流
重要假设
现在,贴现现金流最重要的投入是贴现率,当然还有实际现金流。如果你不同意这些结果,你可以自己试一试计算,并玩弄一下假设。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Silverlake Axis视为潜在股东,股权成本被用作贴现率,而不是占债务的资本成本(或加权平均资本成本,WACC)。在这个计算中,我们使用了7.2%,这是基于杠杆率为1.000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:
虽然很重要,但理想情况下,贴现现金流计算不会是你为一家公司仔细审查的唯一分析。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。如果一家公司以不同的速度增长,或者如果其股本成本或无风险利率大幅变化,产出可能看起来非常不同。我们能弄清楚为什么该公司的股价低于内在价值吗?对于Silverlake Axis,有三个重要方面需要进一步研究:
- 财务状况:5CP是否拥有健康的资产负债表?看看我们的自由资产负债表分析,对杠杆和风险等关键因素进行了六项简单的检查。
- 未来收益:与同行和更广泛的市场相比,5CP的增长速度如何?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.每天更新每只新加坡股票的贴现现金流计算,所以如果你想找出任何其他股票的内在价值,只需搜索此处。
对这篇文章有什么反馈吗?担心内容吗? 保持联系直接与我们联系。或者,也可以给编辑组发电子邮件,地址是implywallst.com。
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。