Today we will run through one way of estimating the intrinsic value of Canggang Railway Limited (HKG:2169) by projecting its future cash flows and then discounting them to today's value. We will use the Discounted Cash Flow (DCF) model on this occasion. Believe it or not, it's not too difficult to follow, as you'll see from our example!
Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
Check out our latest analysis for Canggang Railway
Is Canggang Railway Fairly Valued?
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. 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, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) estimate
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Levered FCF (CN¥, Millions) | CN¥94.5m | CN¥99.6m | CN¥103.9m | CN¥107.5m | CN¥110.6m | CN¥113.3m | CN¥115.8m | CN¥118.1m | CN¥120.3m | CN¥122.5m |
Growth Rate Estimate Source | Est @ 7.1% | Est @ 5.43% | Est @ 4.27% | Est @ 3.45% | Est @ 2.88% | Est @ 2.48% | Est @ 2.2% | Est @ 2.01% | Est @ 1.87% | Est @ 1.77% |
Present Value (CN¥, Millions) Discounted @ 6.8% | CN¥88.5 | CN¥87.3 | CN¥85.3 | CN¥82.6 | CN¥79.6 | CN¥76.4 | CN¥73.1 | CN¥69.8 | CN¥66.6 | CN¥63.4 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = CN¥772m
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 (1.6%) 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 6.8%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = CN¥122m× (1 + 1.6%) ÷ (6.8%– 1.6%) = CN¥2.4b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CN¥2.4b÷ ( 1 + 6.8%)10= CN¥1.2b
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¥2.0b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of HK$2.3, 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.
SEHK:2169 Discounted Cash Flow September 15th 2022
The Assumptions
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. 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 Canggang Railway 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 6.8%, which is based on a levered beta of 1.063. 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 ideally won't be the sole piece of analysis you scrutinize for a company. It's not possible to obtain a foolproof valuation with a DCF model. 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. For Canggang Railway, there are three relevant aspects you should further research:
- Risks: Be aware that Canggang Railway is showing 2 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...
- 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!
- Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of!
PS. Simply Wall St updates its DCF calculation for every Hong Kong 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,我們將通過預測未來現金流並將其折現到今天的價值來評估蒼鋼鐵路有限公司(HKG:2169)的內在價值。在這種情況下,我們將使用貼現現金流(DCF)模型。信不信由你,遵循它並不太難,正如您將從我們的示例中看到的那樣!
不過請記住,有很多方法可以評估一家公司的價值,貼現現金流只是其中一種方法。如果你想了解更多關於貼現現金流的信息,可以在Simply Wall St.分析模型中詳細閲讀這種計算背後的原理。
查看我們對蒼鋼鐵路的最新分析
蒼鋼鐵路的估值是否公允?
我們將使用兩階段貼現現金流模型,顧名思義,該模型考慮了兩個增長階段。第一階段通常是一個較高的成長期,接近終值,在第二個“穩定增長”階段捕捉到。首先,我們必須對未來十年的現金流進行估計。由於沒有分析師對自由現金流的估計,我們根據公司最近報告的價值推斷出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收縮速度,而自由現金流增長的公司在這段時間內的增長速度將放緩。我們這樣做是為了反映出,增長在最初幾年往往比後來幾年放緩得更多。
一般來説,我們假設今天的一美元比未來的一美元更有價值,所以這些未來現金流的總和就會貼現到今天的價值:
10年自由現金流(FCF)估計
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
槓桿FCF(CN元,百萬元) | CN元9450萬元 | CN人民幣9960萬元 | CN元1.039億元 | CN元1.075億元 | CN元1.106億元 | CN元1.133億元 | 淨額1.158億元 | 淨額1.181億元 | CN元1.203億元 | CN元1.225億元 |
增長率預估來源 | EST@7.1% | Est@5.43% | Est@4.27% | Est@3.45% | Est@2.88% | Est@2.48% | Est@2.2% | Est@2.01% | Est@1.87% | Est@1.77% |
現值(CN元,百萬元)貼現6.8% | CN元88.5元 | CN元87.3元 | CN元85.3元 | 人民幣82.6元 | CN元79.6元 | CN元76.4元 | CN元73.1元 | CN元69.8元 | CN元66.6元 | CN元63.4元 |
(“EST”=Simply Wall St.預估的FCF成長率)
10年期現金流現值(PVCF)=CN元7.72億元
我們現在需要計算終端價值,它説明瞭這十年之後的所有未來現金流。出於一些原因,使用了一個非常保守的增長率,不能超過一個國家的國內生產總值增長率。在這種情況下,我們使用了10年期政府債券收益率的5年平均值(1.6%)來估計未來的增長。與10年“增長”期一樣,我們使用6.8%的權益成本將未來現金流貼現至當前價值。
終端值(TV)=FCF2032×(1+g)?(r-g)=CN元122M×(1+1.6%)?(6.8%-1.6%)=CN元2.4b
終值現值(PVTV)=TV/(1+r)10=CN元24億?(1+6.8%)10=CN人民幣12億元
那麼,總價值或股權價值就是未來現金流的現值之和,在這種情況下,現金流為20億加元。在最後一步,我們用股本價值除以流通股的數量。相對於目前2.3港元的股價,該公司在撰寫本文時似乎約為公允價值。不過,請記住,這只是一個大致的估值,就像任何複雜的公式一樣--垃圾輸入,垃圾輸出。
聯交所:2169貼現現金流2022年9月15日
假設
上述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。您不必同意這些輸入,我建議您自己重新計算並使用它們。DCF也沒有考慮一個行業可能的週期性,也沒有考慮一家公司未來的資本要求,因此它沒有給出一家公司潛在業績的全貌。鑑於我們將蒼鋼鐵路視為潛在股東,股權成本被用作貼現率,而不是計入債務的資本成本(或加權平均資本成本,WACC)。在這個計算中,我們使用了6.8%,這是基於槓桿率為1.063的測試值。貝塔係數是衡量一隻股票相對於整個市場的波動性的指標。我們的貝塔係數來自全球可比公司的行業平均貝塔係數,強制限制在0.8到2.0之間,這是一個穩定業務的合理範圍。
接下來的步驟:
就構建你的投資論點而言,估值只是硬幣的一面,理想情況下,它不會是你為一家公司仔細審查的唯一分析。用貼現現金流模型不可能獲得萬無一失的估值。相反,它應該被視為“什麼假設需要成立才能讓這隻股票被低估或高估”的指南。如果一家公司以不同的速度增長,或者如果其股本成本或無風險利率大幅變化,產出可能看起來非常不同。對於蒼鋼鐵路,有三個相關方面需要進一步研究:
- 風險:請注意,蒼鋼鐵路正在展示我們的投資分析中的2個警告信號,其中一條讓我們有點不舒服...
- 其他高質量替代產品:你喜歡一個好的全能運動員嗎?瀏覽我們的高質量股票互動列表,瞭解您可能會錯過的其他股票!
- 其他環保公司:關注環境,認為消費者會越來越多地購買環保產品?瀏覽我們的互動列表,這些公司正在考慮更綠色的未來,發現一些你可能沒有想到的股票!
PS.Simply Wall St.每天更新每隻香港股票的貼現現金流計算,所以如果你想找出任何其他股票的內在價值,只需搜索此處。
對這篇文章有什麼反饋嗎?擔心內容嗎? 保持聯繫直接與我們聯繫。或者,也可以給編輯組發電子郵件,地址是implywallst.com。
本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。