DCF Studio

    0001.HK · HKG · Industrials

    CK Hutchison Holdings Limited

    Also onConsensus Drift

    Implied value per share

    HKD 175.88

    Market price

    HKD 67.90

    Implied upside

    +159.0%

    5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case

    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 175.88+159.0%
    Exit multiple
    HKD 118.09+73.9%
    Market price
    HKD 67.90

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (HKD). Outflows negative.

    0bn26bn53bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayHKD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueHKD 286.1bnHKD 292.4bnHKD 298.7bnHKD 305.3bnHKD 311.9bn+2.2%
    EBITHKD 42.3bnHKD 43.2bnHKD 44.1bnHKD 45.1bnHKD 46.1bn+2.2%
    NOPATHKD 35.4bnHKD 36.2bnHKD 37.0bnHKD 37.8bnHKD 38.6bn+2.2%
    Add depreciation & amortisationHKD 41.3bnHKD 42.2bnHKD 43.2bnHKD 44.1bnHKD 45.1bn+2.2%
    Less capital expenditureHKD -24.6bnHKD -25.2bnHKD -25.7bnHKD -26.3bnHKD -26.8bn+2.2%
    Less increase in working capitalHKD -3.7bnHKD -3.8bnHKD -3.9bnHKD -4.0bnHKD -4.1bn+2.2%
    Free cashflow to firmHKD 48.4bnHKD 49.5bnHKD 50.6bnHKD 51.7bnHKD 52.8bn+2.2%
    Discount factor0.97260.92000.87030.82330.7788-
    Present valueHKD 47.1bnHKD 45.5bnHKD 44.0bnHKD 42.5bnHKD 41.1bn-3.3%
    Present Value Of The ForecastHKD 220.2bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate3.20%HKD assumption - no free live source available for this market (assumption)
    Equity risk premium7.00%Market assumption
    Beta0.843Reported 0.765, pulled toward 1.0 (Blume)
    Cost of equity9.10%Risk-free + beta x equity risk premium
    Cost of debt3.68%Interest expense / average total debt
    Market capitalisationHKD 260.1bn43.7% of capital
    Total debtHKD 334.6bn56.3% of capital, book value as a proxy
    Tax rate16.2%Effective, capped at statutory
    WACC5.71%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareHKD 175.88

    75% of EV

    Forecast FCFF, final year
    HKD 52.8bn
    Capex at depreciation, working capital in reinvestment
    HKD 46.1bn
    Less reinvestment at g/ROIC (43.8% of NOPAT)
    HKD -20.2bn
    Capitalised
    HKD 25.9bn
    ROIC (WACC floor)
    5.7%
    Terminal value, undiscounted
    HKD 827.3bn
    Terminal value, discounted
    HKD 644.3bn
    Enterprise value
    HKD 864.5bn
    Less net debt
    HKD 190.9bn
    Equity value
    HKD 673.6bn

    Exit at 6.0x EBITDA

    Value per shareHKD 118.09

    66% of EV

    Terminal value, undiscounted
    HKD 543.1bn
    Terminal value, discounted
    HKD 422.9bn
    Enterprise value
    HKD 643.1bn
    Less net debt
    HKD 190.9bn
    Equity value
    HKD 452.3bn

    Spread between methods: 39%.

    Sensitivity

    Value per share (HKD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    3.71%312.99331.40363.97440.46868.42
    4.71%219.74220.78221.82222.86223.89
    5.71%174.24175.06175.88176.70177.52
    6.71%142.25142.92143.59144.26144.93
    7.71%118.53119.09119.65120.20120.76

    Outlined: this model. Green text: above today's price of 67.90. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputModelImpliedGap
    Revenue growth, every year2.2%-17.3%-19.4pp
    EBIT margin14.8%6.0%-8.7pp
    Discount rate5.7%11.4%+5.6pp
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.