DCF Studio

    0002.HK · HKG · Utilities

    CLP Holdings Limited

    Also onConsensus Drift

    Implied value per share

    HKD 22.48

    Market price

    HKD 77.45

    Implied upside

    -71.0%

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

    AdjustedCapital expenditure runs at 16.9% of revenue against depreciation of 10.0%. A perpetuity has to be a steady state, so the terminal year uses maintenance capex at depreciation and then charges the reinvestment terminal growth requires (g/ROIC of NOPAT). The bridge is shown under Terminal Value.
    NoteRisk-free rate is an assumption: HKD assumption - no free live source available for this market.

    Value Per Share

    Perpetuity growth
    HKD 22.48-71.0%
    Exit multiple
    HKD 33.30-57.0%
    Market price
    HKD 77.45

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (HKD). Outflows negative.

    0bn2bn5bnFY26FY27FY28FY29FY30
    Nominal FCFFDiscounted to todayHKD
    LineFY26FY27FY28FY29FY30CAGR
    RevenueHKD 84.2bnHKD 80.5bnHKD 77.0bnHKD 73.6bnHKD 70.4bn-4.4%
    EBITHKD 11.5bnHKD 11.0bnHKD 10.5bnHKD 10.1bnHKD 9.6bn-4.4%
    NOPATHKD 9.6bnHKD 9.2bnHKD 8.8bnHKD 8.4bnHKD 8.0bn-4.4%
    Add depreciation & amortisationHKD 8.4bnHKD 8.0bnHKD 7.7bnHKD 7.3bnHKD 7.0bn-4.4%
    Less capital expenditureHKD -14.2bnHKD -13.6bnHKD -13.0bnHKD -12.4bnHKD -11.9bn-4.4%
    Less increase in working capitalHKD 1.1bnHKD 1.0bnHKD 994.7mHKD 951.1mHKD 909.5m+4.4%
    Free cashflow to firmHKD 4.9bnHKD 4.7bnHKD 4.5bnHKD 4.3bnHKD 4.1bn-4.4%
    Discount factor0.96750.90560.84760.79340.7426-
    Present valueHKD 4.7bnHKD 4.2bnHKD 3.8bnHKD 3.4bnHKD 3.0bn-10.5%
    Present Value Of The ForecastHKD 19.2bn

    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
    Beta0.708Reported 0.564, pulled toward 1.0 (Blume)
    Cost of equity8.16%Risk-free + beta x equity risk premium
    Cost of debt3.20%Floored at the risk-free rate (implied cost of debt was lower)
    Market capitalisationHKD 195.7bn75.9% of capital
    Total debtHKD 62.0bn24.1% of capital, book value as a proxy
    Tax rate16.5%Effective, capped at statutory
    WACC6.84%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 22.48

    83% of EV

    Forecast FCFF, final year
    HKD 4.1bn
    Capex at depreciation, working capital in reinvestment
    HKD 8.5bn
    Less reinvestment at g/ROIC (35.8% of NOPAT)
    HKD -3.0bn
    Capitalised
    HKD 5.5bn
    ROIC (reported)
    7.0%
    Terminal value, undiscounted
    HKD 128.9bn
    Terminal value, discounted
    HKD 95.7bn
    Enterprise value
    HKD 114.9bn
    Less net debt
    HKD 58.1bn
    Equity value
    HKD 56.8bn

    Exit at 9.9x EBITDA

    Value per shareHKD 33.30

    87% of EV

    Terminal value, undiscounted
    HKD 165.7bn
    Terminal value, discounted
    HKD 123.0bn
    Enterprise value
    HKD 142.2bn
    Less net debt
    HKD 58.1bn
    Equity value
    HKD 84.1bn

    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%
    4.84%49.8654.6961.5071.9189.98
    5.84%32.6334.1836.1438.7242.32
    6.84%21.8822.1722.4822.8323.23
    7.84%15.4415.6015.7515.9016.05
    8.84%10.6610.7910.9211.0511.18

    Outlined: this model. Green text: above today's price of 77.45. 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 year-4.4%15.9%+20.2pp
    EBIT margin13.7%28.5%+14.8pp
    Discount rate6.8%4.5%-2.4pp
    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.